Business

Canadian Drugmakers Offer Billions in Price Cuts amid Crackdown

Canadian authorities are well on their way regarding their plans to crack down on the country’s pharmaceutical industry’s pricing policies and the lobby groups related to the industry have now responded with an offer of deep price cuts that could run into billions. According to a report by Reuters, the lobby groups have offered to fix prices of some drugs, lower the cost of taking care of some diseases and in total, have offered to surrender revenues to the tune of $6.6 billion. However, the crackdown is perhaps still going to go through since the authorities have rebuffed those offers.

Last year, Canada revived an obscure federal regulator named Patented Medicine Prices Review Board (PMPRB) and gave it enough power to go after the pricing of prescriptions drugs that are sold in the country. The Canadian companies compare their prices with a list of countries before arriving at a price for any drug; however, the authorities have proposed that the United States should be dropped from that list owing to the high drug prices there.

Additionally, a new formula has also been proposed. These new rules were announced back in 2017 and were supposed to come to kick in, in January 2019. However, it has been delayed since the authorities are still reviewing the feedback they have received regarding the pricing policies. As a matter of fact, many are under the impression that these new regulations might not ever come into effect. The delay is undoubtedly a matter of concern for those who wanted drug prices to be brought under control in Canada. The Executive Director of PMPRB, Douglas Clark, however, reassured everyone involved and stated that policy is very much still alive. He said, “People tend to presume that the sky is falling. I think it’s a little early for people to panic and lament the demise of this policy initiative.”

The government crackdown has a lot to do with the very nature of the universal healthcare system in Canada as opposed to the ones in other countries. The system does not cover the costs of prescription drugs and citizens have to rely on expensive insurance plans to take care of the costs. According to Reuters, among developed nations, Canada is 3rd in the list of developed nations which spend the most on prescription drugs per capita. Health Canada has rejected the proposals submitted by the lobby groups. In a statement, the ministry said, “The non-regulatory counter-proposals that Innovative Medicines Canada and BIOTECanada jointly submitted to the government would not achieve the goal of ensuring appropriate consumer protection in these circumstances.”

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