Ontario to slash generic drug costs

Employers expected to see ‘significant’ savings
By Shannon Klie
|Canadian HR Reporter|Last Updated: 05/04/2010

The Ontario government’s move to slash generic drug prices by at least 50 per cent over the next three years will result in significant savings for employers with drug plans, according to Camille Coutu at Buck Consultants.

“Generally speaking, generic drugs account for about half of benefit costs of a drug plan. If those costs are reduced by 50 per cent, in three years we’re going to see some nice savings under our drug plans,” said Coutu, who is a health and productivity consultant in Toronto.

Over the next few years, a number of highly used brand name drugs will be coming off patent, opening the door for more generic drugs and further decreasing benefit costs for plan sponsors, said Irene Klatt, vice-president of health insurance at the Canadian Life and Health Insurance Association.