Generic drug makers say employers can rescue cash-strapped benefits plans by lobbying to change patent laws and increase the use of generic medicine.
The Canadian Generic Pharmaceutical Association (CGPA) launched a five-week newspaper ad campaign in late October to get the message out that generic drugs have significant cost savings attached to them and are just as effective as brand-name drugs. The organization hopes that by educating the general public, working Canadians will push their employers to put the issue on business agendas.
“Nearly half of (drug spending costs) are being funded from the private-sector corporations,” said Jim Keon, president of CGPA. “So, when we’re estimating our savings it would be fair to say nearly half (a) billion dollars could be accrued to the private sector.”
The demand for prescription drugs is on the rise and so are the costs. The Canadian Institute of Health Information reports spending on drugs was the country’s second largest health-care expense at $15 billion in 2001.
“We are seeking support from the business community, employers will be able to save money on their drug programs and that’s why it’s important to them,” Keon said.
The CGPA is calling on the federal government to repeal or amend the Patented Medicines (Notice of Compliance) Regulations Act to stop legal battles from ensuing, which stall generic drugs from being introduced into the market, even after the 20-year patents expire. The current regulations allow for “automatic injunctions” which requires Health Canada to put the generic version on hold if there is any unresolved litigation. Brand-name corporations can extend a patent for two years by filing a lawsuit alleging patent infringement or they can make minor changes to a product, which can also result in a patent extension.
Automatic injunctions are also the root of the generic drug problem in the United States. President George Bush proposed regulations last month that would make generic drugs more available to the public at a lower cost, saving Americans billions of dollars in prescription drug expenses. The new regulation would restrict patent holders to one automatic 30-month stay while a case is challenged in the courts. And, some patents may not be eligible for protections such as the 30-month stay, especially those that have little to do with innovations in drug therapy.
In Ontario, making revisions to government regulations, providing easier access to less-costly prescription drugs for employer-sponsored drug plans, was another proposal by CGPA.
“It’s the regulatory and institutional roadblocks that we’re trying to get changed with this campaign,” said Keon. The slowness, the patent protection, the lack of resources by Health Canada, the redundancies, all lead to huge delays and companies are continuing to pay for the higher-priced brand-name drug.
Benefits providers are also lobbying for faster access to generic drugs. Green Shield Canada made a submission to the Romanow Commission on the future of health care earlier this year.
“The average generic drug claim in 2001 has a cost of $18.04 compared to the average brand claim of $58.39...it is a hardship for private-sector plan sponsors who must pay the higher cost brand prices in spite of the fact that a Health Canada approved bioequivalent generic is available,” Green Shield wrote.
It’s up to employers to take a stance and push the government to modify the rules, said Jacqueline Taggart, principal in the communications practice of Morneau Sobeco, a benefits consulting firm.
“If the CEO doesn’t understand the issues about why he should have access to generic drugs, he’s not going to understand why his employees should have access,” Taggart said. “The big corporations need to say, ‘Look, why should we have to pay ‘X’ amount in our benefits when we can have access to generic drugs and save a billion dollars.”
The Canadian Generic Pharmaceutical Association (CGPA) launched a five-week newspaper ad campaign in late October to get the message out that generic drugs have significant cost savings attached to them and are just as effective as brand-name drugs. The organization hopes that by educating the general public, working Canadians will push their employers to put the issue on business agendas.
“Nearly half of (drug spending costs) are being funded from the private-sector corporations,” said Jim Keon, president of CGPA. “So, when we’re estimating our savings it would be fair to say nearly half (a) billion dollars could be accrued to the private sector.”
The demand for prescription drugs is on the rise and so are the costs. The Canadian Institute of Health Information reports spending on drugs was the country’s second largest health-care expense at $15 billion in 2001.
“We are seeking support from the business community, employers will be able to save money on their drug programs and that’s why it’s important to them,” Keon said.
The CGPA is calling on the federal government to repeal or amend the Patented Medicines (Notice of Compliance) Regulations Act to stop legal battles from ensuing, which stall generic drugs from being introduced into the market, even after the 20-year patents expire. The current regulations allow for “automatic injunctions” which requires Health Canada to put the generic version on hold if there is any unresolved litigation. Brand-name corporations can extend a patent for two years by filing a lawsuit alleging patent infringement or they can make minor changes to a product, which can also result in a patent extension.
Automatic injunctions are also the root of the generic drug problem in the United States. President George Bush proposed regulations last month that would make generic drugs more available to the public at a lower cost, saving Americans billions of dollars in prescription drug expenses. The new regulation would restrict patent holders to one automatic 30-month stay while a case is challenged in the courts. And, some patents may not be eligible for protections such as the 30-month stay, especially those that have little to do with innovations in drug therapy.
In Ontario, making revisions to government regulations, providing easier access to less-costly prescription drugs for employer-sponsored drug plans, was another proposal by CGPA.
“It’s the regulatory and institutional roadblocks that we’re trying to get changed with this campaign,” said Keon. The slowness, the patent protection, the lack of resources by Health Canada, the redundancies, all lead to huge delays and companies are continuing to pay for the higher-priced brand-name drug.
Benefits providers are also lobbying for faster access to generic drugs. Green Shield Canada made a submission to the Romanow Commission on the future of health care earlier this year.
“The average generic drug claim in 2001 has a cost of $18.04 compared to the average brand claim of $58.39...it is a hardship for private-sector plan sponsors who must pay the higher cost brand prices in spite of the fact that a Health Canada approved bioequivalent generic is available,” Green Shield wrote.
It’s up to employers to take a stance and push the government to modify the rules, said Jacqueline Taggart, principal in the communications practice of Morneau Sobeco, a benefits consulting firm.
“If the CEO doesn’t understand the issues about why he should have access to generic drugs, he’s not going to understand why his employees should have access,” Taggart said. “The big corporations need to say, ‘Look, why should we have to pay ‘X’ amount in our benefits when we can have access to generic drugs and save a billion dollars.”
