Canada's provincial and territorial health ministers have called for the establishment of a Competitive Value Price Initiative and a national competitive bidding process aimed at reducing the prices of generic drugs.

In a new report, the health ministers tell their premiers that the current Pan-Canadian Purchasing Alliance - agreed in August 2010 for the purchase of widely-used branded single-source drugs, medical supplies and equipment - should now be extended to cover generic drugs. Three to five products should be identified for inclusion in a provincial/territorial Competitive Value Price Initiative "that would result in better prices for generic drugs," says the report, which is entitled From Innovation to Action.

The Ministers' report also calls for the initiation, by the third quarter of this year, of a national competitive bidding process for generics that would result in lower prices taking effect by April 2013. The Alliance's existing work on the procurement of brand-name drugs needs to be accelerated, it adds.

The recommendations are made in the first report on the Council of the Federation (CoF) Working Group on Health Care Innovation, which was set up in January and is composed of all provincial and territorial health ministers. The working group was tasked with proposing practical innovations for provinces and territories to implement to enhance patient care and improve value for taxpayers, following a six-month study undertaken by Premiers Robert Ghiz (Prince Edward Island) and Brad Wall (Saskatchewan), who are co-chairs of the working group.

The panel was asked to focus on three priority areas: - clinical practice guidelines, team-based health care delivery models and health human resource management initiatives. Through their work, the members identified the value price initiative for generic drugs as an "emerging theme" which should also be made a priority area, building on the success which the Pan-Canadian Purchasing Alliance has already achieved in improving patient access to singe-source, brand-name drugs. 

Also, establishing a national competitive bidding process would mean Canada paying more internationally-comparable prices for generics, and this would not only benefit the public sector but could also result in savings for the private sector and employer-sponsored insurance, as well as cost savings for Canadians who pay for drugs out-of-pocket, the ministers suggest.

"Over the long term, there may also be opportunities for Ministries of Health and Industry, along with industry partners, to work collaboratively on the issue of supply," they add.

Responding to the CoF report, industry group Canada's Research-Based Pharmaceutical Companies (Rx&D) said it supported the study's "general direction and focus on tangible action," and emphasised that its member companies are committed to work with all governments to improve access to medicines through innovative approaches. However, it also sounded a note of caution on drugs procurement.

"We must ensure that Canadians and medical professionals have access to the most appropriate medicines and guard against practices that put cost-containment ahead of patient health and safety," said Rx&D president Russell Williams. "For example, we must heed the lessons learned from the recent drug shortages experience, and ensure that the security of supply of medicines for Canadians is not compromised," he warned.