Using generic medications can be one of the most effective ways to reduce health care costs.
Over the last few years, generic versions of several top-selling brand-name drugs became available and the savings can be substantial. In 2015, the use of lower cost generics prescription medicines saved government, employers and patients nearly $15 billion. The average retail price for brand-name prescriptions in Canada is $96.22 while the average price for generic prescriptions is $20.83.
The savings can be substantial.
Generic drug makers can offer much lower prices because the Canadian Food and Drugs Act does not require generics to repeat the extensive clinical trials used to develop brand-name drugs. Generic drug companies also spend far less on sales, advertising and promotion. The savings can be substantial and may be passed along to you in the form of lower prices.
Using generics is one way to reduce health care costs.
Provincial governments pay for approximately 50% of all prescription drugs. That means tax payers can save their provincial health care system, and ultimately themselves, a great deal of money by taking generic drugs. All Canadian provinces have adopted laws and/or regulations that encourage the substitution of brand-name drugs for generics when an approved, therapeutically equivalent generic version is available. Several provinces require the Pharmacist to dispense the generic version unless the prescription specifically states otherwise. If a patient refuses the generic version, that patient will usually be required to pay the difference in cost. Generic drugs accounted for 70.2% of all dispensed prescriptions in 2016, up from 60.1% in 2011.
Generic drugs can save the private sector money as well.
Canadian companies spend about $200 million per week on the cost of prescription drugs and these costs continue to rise. As a result, offering benefit plans that cover the cost of prescriptions is becoming more difficult. Companies must absorb the rising cost of these plans, either by increasing the price of their products and services or by reducing employee benefits and salaries. Therefore, it’s in the best interest of employees to reduce the cost of their prescriptions by choosing generics, which contributes to the future sustainability and viability of their benefit plans.