Ottawa promises to save billions with tweaks to patent drug system

The federal government is making changes to the way it will evaluate new drug prices, a tweak it says will save Canadians billions over the next 10 years.

On Friday, the government released changes to the Patented Medicine Prices Review Board, first set up in 1987 as a shield against what the government calls “excessive prices,” set to come into force next July.

“The [board] relies on outdated regulatory tools and information that foreign medicine pricing authorities updated years ago. As a result, list prices for patented medicines in Canada are now among the highest in the world,” notes a release from Health Canada.

Under the new regulations, the board will no longer compare prices with the United States and Switzerland, which have some of the world’s highest drug prices, when figuring out what companies are allowed to charge. It will still compare drug prices to France, Germany and Italy, and has added Japan, Spain, Norway, Australia, Belgium and the Netherlands to the list. 

Under the new system, the board will now have to consider a drug’s “value to and financial impact on consumers in the health system” when determining if a price is excessive.

The amendments will also allow the board to see a medication’s true market price, including any rebates that have been added. 

“The amendments are expected to result in 10-year total savings to public, private and out-of-pocket payers of $ 8.8 billion present value as a result of lower patented medicine costs,” notes the release.

Applies to new drugs

The changes will apply to new drugs, not ones that already have a drug identification number (DIN).

The government said it didn’t expect delays in accessing medication.

“In fact, several countries with lower prices have faster access to new medicines than Canada,” according to the release.

The changes come as the Liberals consider a pharmacare plan.

In June, the advisory council appointed by the Liberal government recommended the establishment of a universal, single-payer public pharmacare system.

Their report calls for the creation of a new drug agency that would draft a national list of prescription medicines that would be covered by the taxpayer, beginning with an initial list of common and essential drugs, by Jan. 1, 2022.

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CBC | Health News