Social Justice and Democracy

Federal government announces positive changes to drug pricing regulations

August 9, 2019

Canada’s unions applaud today’s announcement by the federal government of new measures updating Canada’s drug-pricing regulations.

“Many life-saving medicines are unaffordable. This new framework will better protect Canadians from skyrocketing drug prices by lowering the cost of brand name medicines,” said CLC President Hassan Yussuff. “This is a good step towards a universal public pharmacare program in Canada.”

Canada currently compares prices with the US and Switzerland—two countries with some of the world’s highest drug prices—when setting its maximum prices for patented drugs. These new regulations no longer require consideration of US and Swiss pricing, instead allowing the Patented Medicine Prices Review Board (PMPRB) to set maximum prices for patented drugs based on other countries with economies and health-care systems similar to Canada.

The updated framework also provides better reporting on drug prices including list prices and discounts offered to third parties like insurance companies. The PMPRB will also have the authority to determine whether drug prices correspond to value to patients and to the healthcare system.

The existing framework used by the PMPRB has not adequately protected Canadians from excessively high prices for patented medicines over the last 30 years. Since 1987, prescription drug costs in Canada have increased at an average annual rate of 7.3%, or over 3 times the inflation rate.

“Canadians have been paying some of the highest prices for patented medicines in the world because the old regulations allowed big pharmaceutical companies to set their prices based on market evaluations, and not on what individuals could actually afford,” said Yussuff.

“Big pharmaceutical companies have continued to renege on their promises to invest 10% of sales in research and development each year, and to introduce new drugs that had substantial or breakthrough therapeutic benefit to Canadians,” said Yussuff.

In 2017, the investment of big pharmaceutical companies was the lowest it has ever been in 30 years—a paltry 4.6%—and nine-in-ten new-patented medicines offered slight or no improvement in therapeutic benefit over existing therapies.

Tags: Pharmacare
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