Management of Drug Prices in Canada
Canada Federal Government carries on strict management practices on drug prices through the establishment of the Drug Prices Review Board, direct formulation and guidance to local government. Its main methods are: 1. Category management methods. All prescription drug prices are formulated by the government. The prices of patented drugs are formulated by the federal government and non-patented drug prices by local governments. Non-prescription drug prices are formed through market competition. Direct government managed drugs are 70.7% of all drugs.
2. The formulation of the maximum retail price. As Federal government regulations, different pharmaceutical companies producing similar Canadian Drugs must perform the uniform price. But the signed price on contract between the pharmaceutical companies and their direct hospitals can be slightly lower. The prices may be 10% to 30% lower than the uniform price according to order quantities. But patients buy the drugs at the same prices in different medical institutions and retail pharmacies. 3. Take the ratio of parity formulation of drug prices. New drugs have been the advent in other industrial countries, should have the upper limit prices same as prices in other industrial countries. If not, the prices should not be higher than drug prices with same the efficacy. 4. Implementing two price systems for patented drugs and generics. Generics’ prices are lower than the patented drug prices. The generic prices are formed in decreasing way to control the blind development of generic drugs. It is understood that Canadian government-managed drug prices almost did not rise in recent decades.




