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Archived — Major savings available on generic drug spending through more Competition, Competition Bureau study finds

OTTAWA, November 25, 2008 — Up to $800 million a year would be available to be reinvested in Canada's health-care system or passed on to taxpayers, consumers and businesses, if generic drugs were sold in a more competitive market, Sheridan Scott, Commissioner of Competition, said today in releasing a study, Benefiting from Generic Drug Competition in Canada: The Way Forward.

The amount will only grow as several blockbuster brand-name drugs come off patent in the next three years and become available in generic versions, the Competition Bureau study found.

The report lays out several ways in which private plans and provincial government plans can wring savings out of a system that does not pass on the full benefits of competition among generic drug manufacturers to those who pay for the drugs.

“Our report provides a timely prescription for change,” said Ms. Scott. “Our study suggests ways to make the generic drug market work better for consumers, businesses and governments, so we can all get the most value for our health-care dollars.”

Among the possible solutions: competitive tendering by provincial drug plans, effective competitive price monitoring, and private plans providing incentives to patients for using alternative approaches like preferred pharmacy networks. For more information on the Bureau's recommendations, please refer to the backgrounder.

This report follows the Bureau's Generic Drug Sector Study, released in October 2007, which concluded the design of drug plans has not resulted in the benefits of competition being passed along to Canadians in the form of lower prices. At the time, the Bureau committed to returning with recommendations to help fix the system.

The Bureau's examination of the generic drug sector was conducted as part of its role as an advocate for competition. Health-related markets have been a key enforcement and advocacy priority for the Bureau for several years because of their importance to the welfare of Canadians. The Competition Bureau believes Canadians deserve a health system that is safe and effective, but also delivers the maximum possible value to Canadians.

The Competition Bureau is an independent agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

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