Government announces measures to reduce price of patented drugs
The federal government announced on Aug. 9 the final amendments to the Patented Medicines Regulations. These amendments will give the Patented Medicine Prices Review Board (PMPRB) the tools to protect Canadians from excessive prices and lay the foundation for national pharmacare, says an announcement from Health Canada.
“Firstly, these amendments will change the ‘basket’ of countries we compare ourselves to when setting drug prices, so that prices here are judged against countries that actually look like Canada in terms of population, economy and approach to health care,” says the statement.
Second, the changes will give the PMPRB the actual market price of medicines in Canada instead of an inflated list or "sticker" price. This will allow for a more accurate assessment of whether a price is reasonable when setting a price ceiling, explains Health Canada. In addition, the changes will enable the PMPRB to consider whether the price of a drug actually reflects the value it has for patients.
"Today, we take the biggest step to lower drug prices in a generation. Building on the progress we've already made towards lower drug prices, these bold reforms will both make prescription drugs more affordable and accessible for all Canadians—saving them an estimated $13 billion dollars in the next decade—and lay the foundation for National Pharmacare," stated Ginette Petitpas Taylor, Minister of Health.
Changes welcomed by the industry
In a statement issued Aug. 9, the Canadian Life and Health Insurance Association (CLHIA) said it welcomed the amendments, calling them “a crucial step to lower prescription drug costs for all Canadians.”
“The changes announced today will mean lower costs for prescription medicines whether they are provided by governments or through workplace plans offered by employers to 25 million Canadians,” Stephen Frank, President and CEO of the CLHIA said. “This modernization is good news for all Canadians who are currently paying some of the highest drug prices in the world.”
The CLHIA noted that Canada spends more on drugs per capita than any other OECD country except for the United States and Switzerland and that rising drug prices are a challenge to employers who provide benefit plans to their employees.
Struck the right balance
“Insurers believe that a strengthened PMPRB is a vital step towards modernizing the regulatory environment around drug prices in Canada,” Frank said. “We believe the approach outlined today strikes the right balance between lowering prices across Canada over time while ensuring that Canadians continue to have access to the innovative medicines that they need.”
Manulife also issued a statement praising the amendments. "Manulife strongly supports measures to reduce the cost of medications," said Donna Carbell, Head of Group Benefits, Manulife Canada. "Today's announcement is an important one because it will help employers continue to provide comprehensive drug coverage to employees and their families."