February 10, 2018

Pangaea Express: New Generic Pricing Framework is Announced

by Marla Weingarten, Consultant

The pan-Canadian Pharmaceutical Alliance (pCPA) and the Canadian Generic Pharmaceutical Association have jointly developed a new five-year generic pricing framework. As of April 1, 2018, close to 50 commonly prescribed drugs will be priced at 18% of brand and another 20 molecules will be priced at just 10% of their respective branded product. This represents approximately a 25 - 40% reduction for these drugs from their current price.

This new framework goes much further in reducing generic drug pricing than its previous version where only 12 drugs were identified for pricing of 18% and 6 drugs were labelled for 15% of brand as the floor price. With the new pricing structure implemented April 1, 2018, the pCPA is expecting to save an additional $385 million in the first year and up to $3 billion over the next five years as new generic drugs come to market.

Within this new initiative, generic manufacturers have the guarantee that tendering will not be carried out by provincial drug plans during this five-year term.

For generic drugs outside of those classified for the 18% - 10% of brand price, the framework will continue in the tiered manner with 75%, 50% or 25% of brand price depending on the category of single source generic, two generics or three or more.

Click here for the list of generic molecules identified for specific pricing

For more information, please contact Marla Weingarten, Consultant, The Pangaea Group