drug prices

Access delayed, transparency denied

Yet another patient appears on Global TV News unable to get an expensive prescription drug reimbursed by the Ontario provincial government, and the Minister of Health and Long-Term Care responds that “the provinces and territories are working together to negotiate with manufacturers to get the best possible prices for drugs.” What no one gets to know is precisely how that’s happening or how quickly, leaving us all in the dark about access to a vital component of modern medical care.

Ontario plays chicken with generic drug prices

Once again the Ontario government is meddling with generic drug prices in a vain attempt to save a few bucks. Having dug itself into an enormous fiscal hole, the province just announced it will further lower the prices it pays for the 10 best-selling generic prescription medicines to 20 per cent of their brand-name equivalents, down from the current 25 per cent.

Nova Scotia should allow competition to determine generic drug prices - commentary

Nova Scotia’s minister of health Maureen McDonald has announced her government’s intentions of introducing legislation this spring aimed at getting ‘fairer’ drug prices. It appears that minister McDonald will likely be following Ontario and Quebec’s mistakes by arbitrarily regulating prices.
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Since 2005, this study has regulary compared Canadian and American retail prices for an identical group of the 100 most commonly prescribed brand-name (mostly patented) drugs and the 100 most commonly prescribed generic drugs in Canada. This year?s study focuses exclusively on the price difference between the two countries for the 100 generic drugs that were most commonly prescribed in Canada in 2008. The analysis replicates the same methodology that was used in previous editions (Skinner, 2005;Skinner and Rovere, 2007; Skinnerand Rovere, 2008) making the results comparable to those reports.

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There is a common misconception that American prices for prescription medications are excessive because they are often higher than prices in Canada. This leads some people to suggest that the overall cost burden of prescription drug spending in the United States is unfair. However, the fact is that the relative burden of prescription drug spending is roughly equivalent in both countries. This is partly explained by the fact that many drugs, generics in particular, are significantly more expensive in Canada than they are in the United States. On balance, between the higher prices paid for brand-name drugs and the much lower prices paid for generic drugs in the US, Americans spend about the same percentage of their incomes on prescription drugs as Canadians.

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This study regularly (since 2005) compares Canadian and American retail prices for an identical group of the 100 most commonly prescribed brand-name (mostly patented) drugs and the 100 most commonly prescribed generic drugs in Canada. In 2007, this sample of drugs represented approximately 70% of the entire brand-name market and approximately 55% of the entire generic market.

The results confirm that, in 2007, Canadians continued to pay more than double the prices that Americans pay for identical generic drugs because government policies in Canada distort the market for prescription medicines. Meanwhile, Canadian prices for brand-name drugs remain more than half as expensive on average as American prices for identical drugs and are declining over time relative to prices in the United States.

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Canadians pay much more than Americans for generic drugs because government policies in Canada distort the market for prescription medicines. In currency-equivalent terms, Canadian retail prices for generic prescription drugs in 2006 were on average 115% higher than retail prices observed in the United States for identical drugs. A previous analysis using 2003 data found that prices for generic drugs were 78% higher in Canada. By contrast, Canadian retail prices for brand-name drugs were on average 51% below US prices for identical drugs in 2006. In 2003, the prices for brand-name drugs was 43% lower in Canada on average. For Canadians, this means that since 2003 the cost of generic drugs has risen relative to US prices, while the cost of brand-name drugs has decreased.