This article originally appeared in Benefits Canada on April 1, 2021.
High-cost drugs remain the primary cost driver for Canadian public and private drug plans, said the Patented Medicine Prices Review Board’s newly released 2019 annual report.
Patty Hajdu, the federal government’s minister of health, tabled the report, which found the sales of patented drugs grew 3.5 per cent to over $17 billion in 2019. Additionally, the PMPRB noted that high-cost drugs accounted for almost 50 per cent of all patented drug sales, and seven of the top-10-selling patented drugs had annual treatment costs exceeding $10,000 per year.
However, the report also found patentees’ research and development to sales ratios decreased slightly from four per cent in 2018 to 3.9 per cent. And of the 1,364 patented medicines for human use reported to the PMPRB, 81 were new medicines.
As well, $3.5 million in excess revenues were offset by way of payments to the federal government, in addition to price reductions, noted the report, which also found Canadian list prices were fourth highest among the 31 Organisation for Economic Co-operation and Development countries — lower only than prices in Switzerland, Germany and the U.S.
However, Innovative Medicines Canada, disagrees with the PMPRB’s assessment, stating its internal data shows utilization, driven by growth in chronic diseases, was the primary cost driver, rather than the price of drugs. And IMC said in a written statement on its website recent data from Statistics Canada shows the sector generates almost $15 billion in economic activity and approximately $2 billion annually in R&D spending. Based on this, it said the industry has an R&D to sales ratio of 8.8 per cent, more than twice as high as what was reported by the PMPRB for 2019.
IMC also noted increases in the annual Canadian price of patented drugs were, on average, less than the inflation rate. And the organization pointed out Canadian prices remained in the middle of the PMPRB’s basket of seven comparator countries. Overall, median international prices were 16 per cent higher than Canadian prices, IMC said.
The PMPRB’s report comes just three months ahead of new guidelines, which aim to modernize the country’s pricing framework for patented medicines, and are set to take effect on July 1.