Have you ever stood in a pharmacy looking at painkillers noting the significant price difference between the well-known brand and the generic version? You ask yourself, “Yes, but is it exactly the same thing? Does the generic drug have the same quality and active ingredients so that it will be just as effective as the brand drug? Is the generic just as safe?”
The answer is Yes! Here’s why…
All medications must be assessed and approved by the FDA (Canada’s Food & Drug Act). Canadian-made generics must follow the same guidelines and be authorized for sale by Health Canada before they can be dispensed. The active ingredients in the brand name version and the generic one must be identical in quality, strength, and dosage. The inactive or non-medical ingredients, such as fillers and preservatives may differ, but keep in mind that even those are regulated and subject to the same review process. The appearance of the drugs will differ and of course, the packaging will be different.
If you ended up buying the brand name one because you answered your question with, “Well, just to be safe, I’d better get the brand name one.”, now you know that generics are equally safe and effective.
The Canadian Generic Pharmaceutical Association (CGPA) member companies have manufacturing facilities in Canada that produce more than 70% of the prescription medications dispensed in pharmacies, hospitals, and clinics across the country. And they do so for a fraction of the cost. In fact, Canada’s generic pharmaceutical industry is what makes high-quality, safe, and cost-effective medications affordable for the public, governments, healthcare providers, patients, and private drug benefit plans.
So why are generics less expensive?
Good question. One of the reasons is that prices of generics in Canada are set by the pan-Canadian Pharmaceutical Alliance (pCPA/CGPA) Pricing Agreement between provincial and territorial governments (excluding Quebec) and federal government drug benefit plans. That agreement began in 2017 and went to 2021 with extraordinary success at reducing costs for prescription medications for Canadians by a total of $137.3 billion! The average price per prescription in 2021 was $121.20 for a brand name drug compared to $20.29 for the generic version.
In Canada, more than six hundred million prescriptions are filled every year with more than two-thirds of all prescriptions being dispensed with generic medicines. This means that every day more than one million prescriptions are filled using generic medicine! (IMS Health Brogan)
What is the impact on Health Benefits Plans?
That cost differential between brand name medications vs generics has an impact on employee benefits plans. Drug plans are benefits to help keep you and your family healthy. With the substantial savings realized by purchasing these generic drugs, the utilization of these generic drugs can contribute to an affordable and sustainable drug plan for an employer, an employee, and their family for years to come. An employer plan manager can help reduce benefits costs by educating their employees to ask for generic versions of their prescriptions. And as an employee, you can remember to ask your doctor or pharmacist if a generic equivalent is available for your prescription needs. Dollars that stay in your pocket and the benefits plan pool are dollars to be valued indeed!
At Health Risk Services, we help Benefits Managers create plans that meet their employees’ needs and the employers’ budgets. We provide in-depth knowledge of where company savings can occur while offering employees comprehensive and desirable plans. Health Risk Services can complete a full review of the drug parameters on your current benefits plan, and through this process, we may reveal that you have options that you have not considered.
To schedule your Complimentary Consultation with Health Risk Services, please call 403-236-9430 OR email: [email protected]