News
New study notes private drug plans benefit from increased use of lower priced generic drugs, and highlights opportunities for additional cost savings
December 4, 2015
Ottawa, ON — Patented Medicine Prices Review Board
The Patented Medicine Prices Review Board (PMPRB), through the National Prescription Drug Utilization Information System (NPDUIS) research initiative, presents Private Drug Plans in Canada, Part 1: Generic Market 2005-2013, the first in a series of three NPDUIS reports that explore issues in private drug plans in Canada. This instalment focuses on the 2013 calendar year with a retrospective look at trends since 2005, providing an important benchmark for measuring future changes in the generic market.
Private Drug Plans in Canada, Part 1: Generic Market 2005-2013 assesses the increased use of generic drugs in private drug plans following the loss of market exclusivity for many blockbuster brand-name drugs, and whether there are opportunities for further increases in generic drug use in private plans compared to public plans. The report also identifies cost savings resulting from generic pricing policies implemented by most provincial governments in recent years.
Most notably, the study found that Canadian private drug plans would have seen important prescription cost savings in 2013 had brand-name drugs been reimbursed at generic price levels, with Quebec private drug plans having the greatest potential to realize savings. Dispensing frequency was identified as a key factor driving prescription costs for generic drugs in Quebec private plans to levels markedly higher than those in other plans. The study also found that the use and cost of generic drugs in most private plans was similar to that in public plans in 2013, despite significant differences in plan design and beneficiary populations.
Private Drug Plans in Canada, Part 1: Generic Market, 2005-2013 is available on the PMPRB website in PDF and accessible HTML formats.
Quick Facts
- Generic drugs accounted for 70% of all prescribed drugs in Canada in 2013. Canada had the third-highest proportion of annual prescription generic drug use relative to the seven industrialized countries the PMPRB considers in reviewing the prices of patented drug products (France, United States, Sweden, Switzerland, Germany, United Kingdom and Italy).
- The proportion of prescriptions for generic drugs reimbursed by Canadian private drug plans increased from 37% in 2005 to 55% in 2013, but continued to be lower than in public plans, at 71%. This was primarily due to differences in the demographic and disease profiles of the beneficiary populations.
- Private drug plans would have seen prescription drug cost savings of up to 5.7% in 2013 had brand-name drugs been reimbursed at generic price levels.
- Private drug plans in Canada reimbursed a 5 to 12% lower cost per prescription for generic drugs compared to public plans in 2013 due to less frequent dispensing and a lower number of dispensing fees charged.
- Generic pricing policies introduced by most provincial governments markedly reduced the prices of generic drugs reimbursed by private plans from an average of 63% of the brand-reference price in 2010 to 42% in 2013, resulting in cost savings ranging from 8 to 13% of overall retail drug cost in 2013.
- Dispensing frequency was a key factor driving prescription costs for generic drugs in Quebec private drug plans to levels 64% higher than those in Ontario. On average, 35 units of oral solid medication were dispensed per prescription in Quebec private plans, which was much less than the Ontario average of 64 units.
Additional Links
Patented Medicine Prices Review Board
The Patented Medicine Prices Review Board protects and informs Canadians by ensuring the prices of patented medicines sold in Canada are not excessive, and by reporting on pharmaceutical trends.
About the NPDUIS initiative
The National Prescription Drug Utilization Information System (NPDUIS) is a research initiative established by federal, provincial, and territorial Ministers of Health in September 2001. It is a partnership between the Patented Medicine Prices Review Board and the Canadian Institute for Health Information (CIHI).
The NPDUIS initiative provides policy makers and public drug plan managers with critical analyses of price, utilization and cost trends so that Canada’s health care system has more comprehensive and accurate information on how prescription drugs are being used and on sources of cost pressures.
The main data source for this report is the NPDUIS Database, developed by the CIHI.
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Contacts
Sofie McCoy-Astell
Manager, Communications
Patented Medicine Prices Review Board
613-960-9728
Sofie.McCoy-Astell@pmprb-cepmb.gc.ca
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