Canada's Health Minister slams generic prices

Tony Clement, Canada's Health Minister, has attacked the "oligopoly" which, he claims, is responsible for the country enduring some of the highest generic drug prices in the world, especially when compared with the neighboring USA (see page 24). Mr Clement said: "we want the generics to be successful in our country, but it doesn't mean it should be the same three generic companies all the time. They shouldn't get an automatic oligopoly."

A draft report by the federal Competition Bureau, subsequently obtained by the National Post, confirmed that generic drug prices in Canada exceed the average for industrialized countries. In 2005, the estimated overspending was C$1.5 billion ($1.42 billion). However, the study argued that "it is apparent now that supply for many generic products has become highly competitive." Since the early 1990s, the number of generic drugmakers operating in Canada has risen from two, Apotex and Novopharm, to 15, with multiple versions of the same product on the market in many instances.

Instead, the Competition Bureau's provisional analysis is that pharmacies are not passing on to payers the average of 40% list price discounts (rising to 80% on occasion) that drugmakers are offering them. Provinces pay 45% of prescription drug costs, private insurers 36% and patients themselves account for 18%.