Generic Drug Pricing Summary (As of May 2011)

In 2010, several Provinces introduced generic drug reforms to reduce the cost of generic drugs covered by both Provincial prescription drug programs and private plans. These Provinces are implementing these reforms in a phased manner that may include effective dates in 2010, 2011, 2012 and 2013. The information below will provide you with a summary of these changes by Province and effective dates.


Alberta (Background):

In April 2010, Alberta enacted legislation to reduce the amount paid for generic drugs listed on the Provincial formulary from 75 percent to 56 percent of the cost of the brand drug with new generics added to the Provincial formulary regulated at 45 percent of the brand drug.  The Province also implemented a Transitional Allowance of $3.00 that was applied to all prescriptions under $75. (Transitional allowances compensate pharmacies for lost revenue resulting from the introduction of lower cost generic drugs.)

Important Dates: Effective April 1, 2011 the allowance was reduced from $3.00 to $2.00 per prescription. This Allowance will be phased out over the next three years. (On April 1, 2012 the allowance will be reduced from $2.00 to $1.00 per prescription and will be eliminated on April 1, 2013.)

Summary: The reduction in generic pricing was applied to both the Provincial and private plans. Equitable Life's price files for Pay-Direct Drug clients have been updated to reduce the Transitional Allowance to $2.00 effective April 1, 2011. For more information on Alberta generic pricing, visit http://www.health.alberta.ca/initiatives/pharmaceutical-strategy.html.

 

British Columbia (Background):

Effective October 15, 2010, B.C. Pharmacare reached a deal with the Provincial Pharmacy Association resulting in the reduction to the allowable cost for existing generic drugs on the Provincial formulary to 50 percent of the cost of the brand drug and 42 percent of brand drug for generics added to the Pharmacare program after January 1, 2009.

Important Dates: Effective July 4, 2011 prices for generic drugs (existing and new) will be further reduced to 40 percent of the cost of the brand drug. Generic prices will be further reduced to 35 percent of the cost of the brand drug on April 2, 2012.

Summary: The reduction in generic pricing was applied to both the Provincial and private plans. For more information on B.C. generic pricing, visit http://www.health.gov.bc.ca/pharmacare/newsletter/index.html.

Nova Scotia (Background):

In the fall of 2010, Nova Scotia announced plans to implement generic drug reforms and extended an invitation to stakeholders to participate in discussions.

What is happening now: On Monday April 11, 2011 the Province of Nova Scotia announced new legislation which will allow residents of Nova Scotia covered by Pharmacare to pay lower prices for most generic drugs.

Important Dates: Effective July 1, 2011, a 45 percent cap will be set on the price of generic drugs, based on the price of the brand drug under Pharmacare. Further caps will be phased in over one year. (Effective January 1, 2012, the cap will move to 40 percent and on July 1, 2012, the cap will reduce to 35 percent).

Summary: As of the date of this publication, Equitable Life is monitoring this situation carefully as the April 11, 2011 changes announced by Nova Scotia do not extend the lower generic pricing to private plans. Equitable Life will work with the Canadian Life and Health Insurance Association (CLHIA) to understand the rationale for this decision and communicate any changes, explanations and/or impacts to our groups as soon as such information is available. For more information on Nova Scotia generic pricing, visit http://www.gov.ns.ca/health/.

Ontario (Background):

In July 2010, the Province enacted legislation to reduce the amount paid by both the public and private sector for generic drugs listed on the Provincial formulary. For the Ontario Drug Benefit (ODB) Program, the generic prices were reduced from 50 percent of the cost of the brand drug to 25 percent of the brand drug. For private plans, the generic prices, previously unregulated, were regulated to 50 percent of the cost of the brand drug.

Important Dates: Effective April 1, 2011 generic prices for private plans were reduced from 50 percent of the cost of the brand drug to 35 percent. Generic pricing for private plans will be further reduced from 35 percent of the cost of the brand drug to 25 percent of the cost of the brand drug on April 1, 2012.

Summary: The reduction in generic pricing is applied to both the Provincial and private plans. Equitable Life's price files for Pay-Direct Drug clients will be updated on April 21, 2011 to reflect this new pricing. This 20 day period will allow sufficient time for pharmacies to deplete their stock that was purchased at a higher amount. For more information on Ontario generic pricing, visit http://www.health.gov.on.ca/en/public/programs/drugreforms/who_benefits.aspx.

Quebec (Background):

In November 2010, Quebec announced that the Province would reduce the allowable amount for generic drugs on the Provincial formulary to 25 percent of the cost of the brand drug.  At that time, generics were reduced from 54 percent to 37.5 percent of the cost of the brand drug.

Important Dates: Effective in April 2011 prices for generics were reduced to 30 percent of the cost of the brand drug. Prices for generics will be reduced to 25 percent of the cost of the brand drug effective in April 2012.

Summary: The reduction in generic pricing was applied to both the Provincial and private plans. For more information on Quebec generic pricing, visit http://www.ramq.gouv.qc.ca/index_en.shtml.