E-DRUG: Price Control Mechanism
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[To respond DO NOT CLICK REPLY, respond to "Dr. Subhash C Mandal" <pharmid@vsnl.net>. We look forward to receiving a summary of responses from Dr Mandal. BS]
Dear E-Druggers,
We are conducting a study on the impact of "Price Control mechanism" on availability of medicines at reasonable price. We would be extremely happy if you please let us know-
1.. Is there any mechanism for price control in your country?
2.. If so which mechanism? Any law?
3.. Do you feel it is effective for availability of medicines at affordable prices?
4.. If so how do you rate this mechanism (1-5 scale)?
With best regards,
Dr. Subhash C. Mandal, M.Pharm., Ph.D. (Pharm.)
Pharmacist
India
e-mail:pharmid@vsnl.net
E-DRUG: Price Control Mechanism (3)
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On a federal level Canada has price controls through the Patented Medicine
Prices Review board which is a quasi-judicial entity. The PMPRB sets limits
on the introductory price of new patented medicines and then limits the rate
of rise of prices of these drugs to the rate of inflation. It has no
regulatory power over the prices of generic drugs. The PMPRB was set up in
1987 when the Canadian Patent Act was amended and so has a legislative basis
although the way it makes its decisions is through regulations. The PMPRB
has been able to keep the price of patented medications in Canada at about
the median of prices in seven other countries that it uses for comparison
(France, Germany, Italy, Sweden, Switzerland, U.K., U.S.) so on a scale of
1-5 where 1 is very good at controlling prices and 5 is horrible I'd
probably give it a 2. For further information about the PMPRB please go to
its web site and download the annual report for 2004
<http://www.pmprb-cepmb.gc.ca/>
On a provincial level there is another set of price controls although these
vary somewhat from province to province. These controls can apply both to
patented and generic drugs. When drug companies want to list products on
provincial formularies the provinces can exercise some bargaining power
around prices. In Ontario, the first generic can be no more than 70% of the
brand-name price and subsequent generics can not be more than 90% of the
first generic price. However, these limitations have become floor prices
rather than ceiling prices. All provinces say that if there is a generic
equivalent then they will only reimburse the pharmacist for the lowest price
generic regardless of which version of the drug the pharmacist dispenses.
This provision encourages the use of generics and is one reason why about
40-45% of prescriptions are dispensed using generics. Some provinces have
put price freezes on drugs on their formularies - for instance, Ontario has
imposed a price freeze since 1994. The province of Saskatchewan tenders for
the most widely used generics. In British Columbia there is reference based
pricing for 5 drug classes. Overall the provinces have had mixed success
with keeping prices down and I'd probably give them a 3 on a scale of 1-5.
Joel Lexchin
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Joel Lexchin MD
121 Walmer Rd.
Toronto ON
Canada M5R 2X8
Tel: 416-964-7186
Fax: 416-736-5227
E mail: joel.lexchin@utoronto.ca