Generic Drugs Overpriced?

Canadians could be paying less for generic drugs: Competition Bureau

Canada's Competition Bureau says the benefits of strong competition in the generic drug sector are not finding their way to consumers in the form of lower prices.

A study by the independent agency found that generic drug manufacturers offer rebates or other payments to pharmacies to compete for space on their shelves in most provinces.

The bureau found that these rebates average about 40 per cent of the price the pharmacy is invoiced for generic drugs.

But bureau commissioner Sheridan Scott says that in most provinces, pharmacies have limited incentives to pass on these cost savings to public and private drug plans or to consumers.

Scott says generic drugs help control prescription medication costs and provide competition for brand-name products when patent protection ends.

Yet several studies have shown that the prices of prescription generic drugs are higher in Canada than in many other countries.

In 2005, 43 per cent of all drugs dispensed through retail pharmacies in Canada were generics; total generic drug spending in 2006 was $3.2 billion.

Source: CBC.ca