1. THE
VALUE OF
GENERIC DRUG PRICING
GENERICS AND AVAILABILITY
Jim Keon, President
Canadian Generic Pharmaceutical Association

2. In the last several years, the
price of generic drugs has
fallen dramatically.
The economic rationale for
using generics has never
been stronger.

3. TOTAL NUMBER OF PRESCRIPTIONS (%)
527 MILLION PRESCRIPTIONS
GENERIC
In 2012, of the 559 million
prescriptions written in Canada,
more than 63% of them were filled
using generic drugs.
BRAND
-NAME
The cost of these generic medicines
represented only 24% of the $22
billion dollars Canadians spent on
TOTAL MARKET COST (%) prescription drugs.
21.1 BILLION DOLLARS
GENERIC While brand-name drugs were used
to fill only 37% of prescriptions, they
represented more than 76% of the
total cost of prescriptions.
BRAND
-NAME
source:

4. 8-YEAR AVERAGE RETAIL PRICE - GENERIC vs. BRAND-NAME
The average retail price of a generic prescription is $25.04
versus $73.76 for a brand-name prescription.
Over an eight-year period the average price of a brand-name
drug prescription has risen from $60 to almost $74 which
represents a 21% increase.

5. GENERIC vs. BRAND DRUG PRICING MODELS1
BRITISH COLUMBIA
ALBERTA
SASKATCHEWAN
MANITOBA
ONTARIO
All provinces provide for price exemptions.
1. The data are as of fall 2012.

6. GENERIC vs. BRAND DRUG PRICING MODELS1
QUEBEC
NEW BRUNSWICK
NOVA SCOTIA
PRINCE EDWARD ISLAND
NEWFOUNDLAND/LABRADOR
All provinces provide for price exemptions.
1. The data are as of fall 2012.

7. ADDITIONA PROVINCIAL COST SAVINGS FOR CANADIANS
Six of the leading generic drugs on the market will be priced
at 18% of brand-name drug price
• Atorvastatin
• Ramipril
• Venlafaxine
• Amlodipine
• Omeprazole
• Rabeprazole
Representing 20% of generic drug sales in Canada

8. TENDERING GENERIC DRUGS: WHAT ARE THE RISKS?
• Potential drug shortages because of less redundancy in
the drug supply system.
• Less patent litigation by generic manufacturers resulting
in delayed availability of lower-cost generic drugs.
• Less manufacturing of generic drugs in Canada.
• Closure of some generic drugs manufacturing plants in
Canada.
• Less competition in the generic drug markets in Canada.
• Less customer service offered by generic suppliers to
pharmacies.
• Less free customer service in the remaining pharmacies.
Tendering Generic Drugs: What Are The Risks?
October 24, 2012 – Professor Aidan Hollis, Department of Economics, University
of Calgary, and Paul Grootendorst, University of Toronto, Faculty of Pharmacy

9. VALUE OF GENERIC MANUFACTURER’S LITIGATION
EIGHT OF THE TEN TOP-SELLING DRUGS IN CANADA
LAUNCHED AS A RESULT OF GENERIC COMPANY LITIGATION
SAVINGS IN BILLIONS OF DOLLARS

10. INTERNATIONAL PRICE COMPARISONS
INTERNATIONAL STUDIES ON PRICES OF GENERIC
PHARMACEUTICAL PRODUCTS:
• Measure manufacturer EX-factory prices. Prices DO
NOT reflect total cost to payers in each market.
• Prices are On-invoice Prices. Off-invoice
discounts, free goods, rebates, etc. are not
included.
• Canadian prices DO NOT reflect manufacturer’s
net prices – only the reimbursed/retail prices.
• In Canada, retail/reimbursed prices include
significant support for the services that community
pharmacies provide to patients.
• In other countries (e.g. United Sates) retailers
purchase products from manufacturer then mark-up
to sustainable prices. NOT the Canadian model.

11. GENERIC PRESCRIPTION MARKET - CANADA VS. U.S.
In the United States generic
80% drugs are dispensed to fill 80%
of all prescriptions. In Canada
it’s only 60%.
If the use of generic drugs in
Canada increased by 20% and
matched the America
levels, Canada’s health-care
system would have saved
nearly
3-billion dollars in 2011.
60%

12. Using independent, third party
data from IMS Brogan and the
Canadian Institute for Health
Information (CIHI) the CGPA has
calculated the savings available
to each province for every one
percent increase in the use of
generic drugs.
For every one percent increase
in the use of generic drugs in
Canada, Canadians save an
additional 262-million dollars.

13. Jim Keon, President
Canadian Generic Pharmaceutical Association