British Columbia has become the third Canadian province to cut the prices of generic drugs, which are set to drop from an average 65% of the brand-name product’s cost to 35% over a three-year period, starting July 28.

Announcing the change on July 9, Health Services Minister Kevin Falcon said it will produce savings of as much as C$380 million a year, consisting of up to C$170 million a year for the province’s PharmaCare health insurance programme and C$210 million for employer- and union-sponsored drug plans and individuals.

“We are lowering generic drug prices and making improvements to our drug system to benefit all British Columbians,” said Mr Falcon. “Quite simply, we were paying too much for some of the most popular drugs, for high blood pressure, heartburn, depression, epilepsy and cholesterol. Change was needed if we want to keep drug costs sustainable and redirect the money to cover new drugs and provide better services,” he added.

BC spends over C$900 million a year on PharmaCare, with generics accounting for an ever-rising share, totalling C$286 million in 2008-9.

The deal has been agreed by the provincial government with the BC Pharmacy Association and the Canadian Association of Chain Drug Stores (CACDS), in contrast to the recent price reductions in Ontario and Quebec, which have been imposed on pharmacies. These have provoked fury within the sector there, with claims they will cost businesses many millions of dollars a year and could lead to withdrawal of services or forced closures.

Under the BC agreement, the maximum dispensing fee reimbursed by the PharmaCare to pharmacies will go up C$0.50 to C$9.10 on July 28, rising again on October 15 to C$9.60, then to C$10 on July 4, 2011 and to C$10.50 on April 2, 2012. By the third year of the agreement, C$35 million will be reinvested into new clinical pharmacy services, such as pharmacists’ medication management programmes.

“The agreement ensures that patients will continue to have access to the wide array of pharmacy services they depend on, and pharmacies will have stable funding while transitioning over the next three years,” said a Health Ministry statement.

However, opposition politicians in BC point out that the tougher stances taken by health ministers in Ontario and Quebec have got them better deals, reducing generic prices to 25% of the branded price and eliminating the “professional allowances” paid to pharmacies by drugmakers to stock and display their products. The allowances will continue in BC.

The Better PharmaCare Coalition (BPC) of patient and other groups in BC is also critical, and has called for the price reductions to be introduced in full on July 28 rather than being phased-in, pointing out that Canadian patients and drug plans currently pay the second-highest prices for off-brand or generic drugs among developed countries, after the US. “If Ontario can reach 25% and completely eliminate professional allowances, so can BC,” said BPC chair Cheryl Koehn.