B.C. generic drug deal cuts costs by $380 million | National Union of Public and General Employees

B.C. generic drug deal cuts costs by $380 million

Province negotiates deal after Ontario paves the way with legislated cuts in generic drug prices.

Victoria (14 July 2010) - The B.C. government has negotiated a deal with the B.C. Pharmacy Association and the Canadian Association of Chain Drug Stores that will cut generic drug costs significantly - as much as half in some cases.

Health Services Minister Kevin Falcon says the arrangement will cap generic drug prices at 35% of equivalent name brand products. The new scheme will be phased in over three years.

The deal represents a significant savings for government, private drug plan providers and consumers who pay out of pocket for prescription drugs. Costs were as much as double the newly announced rate for generic drugs.

"The amount and the cost that we pay for generic drugs is unacceptably high," Falcon said. "In fact, B.C. and Canada pay substantially more than many other countries," he added.

The deal differs from Ontario, where the provincial government recently legislated a new pricing arrangement, a move that sparked outrage among major drugstore chains.

Once the new price level has been fully phased in, the province expects to save $170 million annually on generic drugs through its Pharmacare program - a public coverage plan that subsidizes the cost of drugs for low-income earners and various others who qualify.

However, the new agreement adds other fees to the cost of generic drugs under the Pharmacare plan. These include a higher dispensing fee and an 8% mark-up on each drug, which will cover a pharmacy's cost of "procuring and stocking the drug," according to the agreement.

As a result, the net savings for government is expected to be closer to $110 million each year.

For private drug plans - such as those offered by employers or unions - and those who pay out of pocket for prescription drugs, the new price scheme is expected to eventually mean millions in long-term savings.


The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

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