New drug price regulations set to come into effect next month could lower spending on patented drugs by about seven per cent over the long term and save billions of dollars, the parliamentary budget officer reported Tuesday.
Health Canada first announced in 2019 that the Patented Medicine Prices Review Board would change how it sets a price cap on medicines in Canada in an effort to lower excessively expensive drug costs by changing the countries Canada compares prices with.
When a breakthrough drug is introduced to the market, the price is set at the median sticker price of seven comparable countries. If the changes had been in place in 2018, Canada would have spent 19 per cent less, representing about $2.8 billion, parliamentary budget officer Yves Giroux and his team found in their newly released report.
“The main objective of the exercise is not to attempt to provide an accurate measurement, but rather to gauge the importance of the change,” Giroux said in the report. The government had initially planned several other regulatory changes to lower the cost of drugs but stood them down after they were successfully challenged in court by pharmaceutical companies and the Quebec government.
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