OBJECTIVE. This paper compares the prices of top selling generic drugs in Canada with prices for comparable generic products in the United States.
METHODS. We examined the prices of 27 top selling (in 2001) generic prescription medicines in Canada that were marketed in both Canada and the United States. The sample represented approximately 39% of total generic sales in Canada. For each of the generic medicines a representative presentation (strength/dosage form) was selected – generally the top selling presentation of the medicine. The prices were the Q1 2002 Canadian ex-factory prices as listed in the Québec provincial government formulary and the US Federal Supply Schedule (FSS) prices. These prices generally represent the best available prices in the two countries.
RESULTS. Preliminary results indicate that of the 27 leading generic drug products examined, 21 had higher prices in Canada than in the US. By all measures Canadian generic prices of the sample drugs were higher than those in the US: Mean: +155%; Weighted Mean: +37%; Median +51%. Annual savings in excess of C$150 million would result if Canadians had access to FSS prices for the sample drugs. If the price differences seen in the sample can be extrapolated to all generic drugs available in Canada, the potential annual savings could approach C$400 million.
CONCLUSIONS. It is generally accepted that the ex-factory prices of innovator (brand name) prescription drugs are significantly lower in Canada than in the United States. It was therefore surprising to find the opposite result for generic drugs. Several factors may contribute to higher Canadian generic prices. The Canadian generic industry is highly concentrated (relative to the US) with the market dominated by two large generics firms. Secondly, provincial government reimbursement policies discourage discounting and feature published formularies that typically establish exfactory prices for all classes of customer.