Patented medicines accounted for 66% of Canada’s prescription drug market in 2007, down from a 68.1% share in 2006, the Patented Medicine Price Review Board (PMPRB) has reported.

“This implies that sales of generic and non-patented branded drug products grew at a considerably faster rate than sales of patented drugs” during the year, the PMPRB comments in its annual report, which was recently presented to Parliament.

Moreover, Canadian sales of patented drugs grew just 3% to C$12.3 billion last year, it says. In comparison, annual growth in sales of patented drugs stood at 27% in 1999 and had remained in double digits until 2003.

Canadian prices for patented drugs declined just 0.1% on average last year, due to the lower prices paid by hospitals but,in an international comparison, Canadian prices were the second highest of seven comparator countries. “This ranking is attributable, in part, to currency conversion at market prices; however, US prices remain substantially higher than prices in Canada or any other comparator country,” says the PMPRB.

However, a Canadian free-market think tank claims that prices in Canada for generic prescription drugs are more than twice as high as those in the USA. On average, the difference was 112% last year, compared with a 78% average higher price for Canadian generics than identical products in the USA in 2003, according to the Fraser Institute, in its new Canada’s Drug Price Paradox 2008 report.

At the same time, Canadian prices for branded patented prescription drugs were 53% lower than American prices for the same products last year; in 2003, Canadian prices for these medicines were 43% lower on average, the report adds.

“The latest data confirm that Canadians continue to pay highly-inflated prices for generic drugs relative to the US…because Canadian government policies are insulating generic drug companies and pharmacy retailers from normal, competitive free-market forces that would put downward pressure on prices for generic drugs,” said Brett Skinner, the Fraser Institute’s director of health, pharmaceutical and insurance policy research, and principal author of the study.

He calculates that, in 2007 alone, Canadian policies aimed at regulating prescription drugs, whether at federal, provincial or territorial level, cost consumers C$2.9-C$7.5 billion in unnecessary spending, “due to a combination of inflated prices for generic drugs and inefficient substitution of medicines.”

Moreover, US consumers substitute generic versions of drugs for their brand-name originals more often than Canadians, claims the study. In the USA, lower prices for generics, driven by market pressures, create positive incentives for consumers to make rational cost-benefit choices regarding their use of medicines, but in Canada, public policies frequently try to force generic substitution yet fail to reach the levels seen in the USA, it says.

- Recent data from IMS Health and the Canadian Institute for Health Information (CIHI) says the annual growth rate for prescribed drug spending in Canada slowed to 7.5% last year, compared to an average annual rise of 10.5% during 1997-2006. Sales of generic drugs rose 21% last year, and they now fill 49% of all Canadian prescriptions yet account for just 21% of the C$19 billion which the nation spends annually on prescription drugs, according to the Canadian Generic Pharmaceutical Association (GPCA).