Protecting domestic generic drug manufacturing is vital to national pharmacare plan

Posted on April 15, 2022 in Health Debates

Source: — Authors: – Opinion/Contributors
April 15, 2022.   By Jim Keon, Contributor

It’s a simple formula: use more Canadian generic medicines and we reduce Canadian health-care costs while supporting Canadian manufacturing and jobs.

Last week’s federal budget commitment to national pharmacare highlights the need for significant work to support Canada’s domestic generic pharmaceutical sector and the thousands of Canadian jobs the industry represents.

The best way to reduce costs for Canadians is to increase our use of generic prescription medicines, supporting Canadian jobs and more affordable options for patients and our health-care system.

The security of our nation’s supply of prescription drugs rests largely with the generics sector.

Generic prescription medicines are dispensed to fill nearly three quarters of all prescriptions in Canada but account for less than 21 per cent of the $35-billion Canadians spend annually on prescription medicines. That means there’s room for improvement.

What does this mean in practice? It means taking steps that increase the use of lower-cost generic medicines to reduce overall costs for Canadians while supporting a strategically important sector of our economy.

In Canada, generic medicines are providing greater value than even 10 years ago. Since 2012, the average price of a generic prescription in Canada has declined from $23.59 to $20.29. Over the same period of time, the average price of a brand-name prescription increased from $77.03 to $121.20.

In its last full report on international generic drug prices published in 2018, the Patented Medicine Prices Review Board (PMPRB) reported that, since 2007, the average price of generic prescription medicines in Canada fell by nearly 60 per cent, with prices of some of the top-selling generics dropping by an average of 80 per cent.

It’s a simple formula: use more Canadian generic medicines, and we reduce overall Canadian health-care costs while also supporting Canadian manufacturing, thousands of Canadian jobs, and access to the prescription medicines upon which we rely.

As we consider ways to improve Canadians’ access to prescription drug coverage, governments must also place a priority on maintaining and improving our domestic manufacturing capacity and strengthening the international supply chain. While generic pharmaceutical manufacturers were able to protect Canadians from catastrophic drug shortages through the COVID-19 pandemic, the sector still faces significant challenges from factors such as rising inflation and a volatile geopolitical environment that can threaten the international pharmaceutical supply chain.

A recent study by EY Canada commissioned by CGPA warns that global supply chains have become increasingly complex, introducing risks, disruptions and shortages of prescription medicines. It also notes that the generics market in Canada faces increasing costs of labour, land, transportation, fuel and a complex regulatory regime. Combined, these elements are increasing the fragility of the domestic industry.

We cannot cut prices further and also ensure the resiliency of our domestic supply. The EY report found that the number of generic medicines domestically produced declined by 35 per cent since 2019, with the majority of active pharmaceutical ingredients produced in countries such as China and India.

The federal commitment to national pharmacare presents an opportunity to improve prescription drug coverage for Canadians, reduce costs to taxpayers and patients through increased use of generic medicines, and to strengthen our domestic pharmaceutical manufacturing sector and international supply chain.

Jim Keon is the president of the Canadian Generic Pharmaceutical Association.

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