Deal on generic drugs to save province more than $1.5B: Barrette
Quebec Health Minister Gaétan Barrette announced Sunday he reached an agreement with the pharmaceutical industry over generic drugs.
“This is a new era,” Barrette said of the agreement reached with Canadian Generic Pharmaceutical Association last week that will save Quebec more than $1.5 billion over the next five years.
Barrette would not specify how much more, but said Quebec spends nearly $800 million a year on generic drugs, and the deal cut with the pharmacy industry represents an annual cost reduction of about $300 million, or about 40 per cent.
Quebec had planned to open the generic drug market up for bids, a process that analysts said would cut costs by 25 to 35 per cent.
The deal “will provide substantial savings for the health-care system and help ensure the ongoing viability of the generic pharmaceutical industry,” Jim Keon, president of the Canadian Generic Pharmaceutical Association, said in a statement.
The Quebec government moved last year to lower drug prices by adopting legislation. Bill 81 allowed for tenders, and Bill 92 gave the provincial health board, the Régie de l’Assurance Maladie du Québec (RAMQ), the capacity to regulate commercial practices relating to prescription drugs.
Negotiations between the government and the generic-drug association, which represents about 80 companies, started with a $1.5 billion proposal from the industry that continued to dwindle during negotiations until they pulled it completely, Barrette said.
Barrette said he was ready to launch the first calls for tender on July 1. But he put it aside when he got an eleventh-hour call on June 30 from the drug association.
“I can’t give details yet. But the initial proposal that disappeared, not only did it come back, but we negotiated a higher rate than the initial proposal,” he said.
The provincial government also concluded an agreement with Quebec’s association of pharmacy owners that calls for a ceiling of 15 per cent in professional fees. Barrette said the Association québécoise des pharmaciens propriétaires (AQPP) professional fees went as high as 75 per cent.
“Just do the math,” Barrette said. “It’s a huge amount of money that we paid. It’s unfair to taxpayers. And that money was going back into the pockets of the pharmacists.”
The funds saved with lower prices for consumers, insurance companies and taxpayers will go into health services, Barrette said.
The new pricing is expected to go into effect in October.
Last week, the pharmacy chain Jean Coutu Group said it expected the generic-drug manufacturers to reach a negotiated settlement with the province to avoid tendering in what could be a blueprint for a Pan-Canadian solution to lower drug prices.