Health minister Gaetan Barrette said companies will now bid for exclusive supply contracts for generic prescription drugs © PA Images
Health minister Gaetan Barrette said companies will now bid for exclusive supply contracts for generic prescription drugs © PA Images

Quebec overhauls drugs procurement to save $300m

4 July 2017

Quebec’s pharmaceutical industry has criticised the government’s plan to launch a new tendering process in an effort to save C$300m a year on generic prescription drugs.

Health minister Gaetan Barrette said under the new centralised tendering process, starting this month, the Ministry of Health and Social Services (MHSS) will seek competitive bids from companies for exclusive supply contracts for generic prescription drugs.

Contracts will run up to three years and brand-name drugs are not part of the new plan.

However, the move will mean that pharmacists will no longer be able to offer a range of brands for generic drugs and instead will only be supplied by the generic drug maker chosen by the MHSS.

Jim Keon, president of the Canadian Generic Pharmaceutical Association, said limiting the number of suppliers for a given product increases the risk of drug shortages and could lead to higher prices in the long term as manufacturers are forced out of the market.

“The government is planning to initiate a risky tendering scheme, with unknown savings results that could threaten the current and future supply of cost-saving generic pharmaceutical products and the industry’s significant jobs and investments in Quebec,” he said.

“It will affect 4,100 direct jobs, will have a direct economic impact of $769m and a significant contribution to Quebec’s trade balance as 40% of local production is exported to other markets.”

Under the old system, hospitals and pharmacists bought generic drugs approved by federal government body Health Canada and an independent organisation made up of industry professionals in Quebec.

Pharmacists were rebated up to 70% of the price from the drug companies, which is worked into the cost the government, consumers and insurance companies pay.

Under the new reforms, the government has capped rebates pharmacists can receive at 15%.

The MHSS said tendering generic drug contracts had driven down prices in parts of Europe, Australia and New Zealand.

Michel Fontaine, Quebec deputy health minister, said governments had been looking for ways to control increasing health costs driven by ageing populations. 

“A number of measures have been put in place to reduce the price of generic drugs in recent year but there remains a large difference between Canadian prices and those in other comparable countries,” he said.

Pharmacists have also objected, saying it will take away patient choice and the security of having multiple suppliers for the same drug. 

Christophe Augé, president of the Professional Association of Pharmacists in Quebec, acknowledged that drug costs were too high but said changing one drug for another could bother some patients. 

“Take epileptics for example—do we want to change something that works? I’m not sure,” he said.

“Do we want to change things for mental-health patients who are sometimes confused just by a change of colour in their pills? I’m not sure.

“Pharmacists will have to explain to patients why their drug brands are being changed and why certain drugs are no longer available.”

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