New drug price rule could save Canada billions, parliamentary budget officer reports
Global News
The new drug pricing regulation, which is set to lower spending on patented drugs, will come into effect in July 1 after being pushed back four times during the pandemic.
New drug price regulations set to come into effect next month could lower spending on patented drugs by about seven per cent over the long term and save billions of dollars, the parliamentary budget officer reported Tuesday.
Health Canada first announced in 2019 that the Patented Medicine Prices Review Board would change how it sets a price cap on medicines in Canada in an effort to lower excessively expensive drug costs by changing the countries Canada compares prices with.
The changes are expected to come into effect on July 1, after being pushed back four times during the pandemic.
The PMPRB has a mandate to make sure drug costs don’t become excessively expensive, and one of the ways it does that is by comparing drug prices with other countries.
When a breakthrough drug is introduced to the market, the price is set at the median sticker price of seven comparable countries.
Over the years, drug prices abroad have become less transparent and the cost of drugs in the United States in particular has shot up drastically compared to Canada.
To fix the problem, Health Canada proposed changing the countries Canada compares prices with, and put forward a list of 11 countries with similar GDP per capita that no longer includes the United States.
If the changes had been in place in 2018, Canada would have spent 19 per cent less, representing about $2.8 billion, parliamentary budget officer Yves Giroux and his team found in their newly released report.
