Canadian Drug Prices Down 1.75% In 1995

Canadian patented drug prices, which are regulated by the Patented Medicines Prices Review Board and represent about 44% of all drugs sold, fell 1.75% in 1995 against a Consumer Price Index rise of 2.14%, says the PMPRB. 1994 prices fell 0.42%.

Total drug sales rose 2% in 1995 to C$6 billion ($4.38 billion). Over 80% of the 89 new drugs introduced in 1995 complied with the PMPRB Guidelines (these limit the introductory prices of new patented drugs and restrict rises to changes in the CPI); the prices of the rest are being investigated. In 1995, the Board resolved three cases through Voluntary Compliance Undertakings by patentees to lower prices, and began a hearing involving the price of ICM's antiviral Virazole (ribavirin). The PMPRB says its compliance and enforcement activities saved consumers C$32.7 million ($24 million) in 1994, or a total of C$107 million since 1990. Also, it says, these savings are not a complete measure of the PMPRB's effectiveness, as most patentees comply with the Guidelines without direct intervention.

The Board also said that total R&D spending by drug patentees rose over 11% in 1995 to $624 million. The overall ratio of R&D spending to sales was 11.8%, the highest since the PMPRB began monitoring R&D spending in 1988. Basic research spending rose 12.6% over 1994 but took a smaller share of total R&D spending (about 22%) than during 1990-93.