Study: Canadian Generics Are More Expensive Than International Counterparts

October 28, 2014

Generic drug prices in Canada are up to seven times more expensive than those in comparable countries, according to a study that challenges a major price-setting deal between Canadian generics firms and provincial governments.

The study examined prices for six drugs — amlodipine, atorvastatin, omeprazole, rabeprazole, ramipril and venlafaxine — that are set at 18 percent of their brand equivalents. Even with the 18-percent cap, the median prices of Canadian generics were at least twice as high as their international cohorts, the study found.

Researchers looked at costs of generics in New Zealand, Germany, the U.K., Sweden and the U.S. Department of Veterans Affairs. The comparators were selected because they are similarly wealthy, according to the study published recently in the peer-reviewed journal Open Medicine.

Canada continues to pay much more for generics than its peers, the study theorizes, because of how the country purchases drugs. While other countries use competition or negotiation to control prices, the 18-percent cap deal, established in April 2013, is a one-size-fits-all approach that fits none well, the authors said.

The Canadian Generic Pharmaceutical Association (CGPA) blasted the study as inaccurate. The trade group noted that the price cap deal was established based on extensive research by the Canadian government’s Patented Medicine Prices Review Board, whose scope eclipsed that of Open Medicine’s by looking at prices of 487 generic drugs and 11 international jurisdictions.

Nor did the Open Medicine study analyze factors that affect and control prices such as regulatory requirements, number of products available and distribution systems, CGPA said. Canada is a small market with a high regulatory hurdle to market entry, the trade group contends.

“In the end, the studies showed that 18 percent pricing in Canada for high-volume, multi-source generic drugs is not unreasonable,” CPGA added.

The study comes as Canada is expanding the list of drugs slated for the 18-percent pricing cap to 18 total products over the next two and a half years. The deal struck last week between generics firms and Canada’s provincial and territorial governments also established maximum prices for different classes of generics. — Bryan Koenig

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.