Regulating the price of patented drugs
CMAJ 1997;156:1512
© 1997 Canadian Medical Association
See also:
The Patented Medicine Prices Review Board was established in 1987 to protect consumers against excessive prices by regulating the maximum price of each patented drug on the market. Has it been successful?
Increases in total drug expenditures are affected by price and volume of sales. Between 1979 and 1986 per capita drug expenditures increased by almost 150%, but between 1987 and 1994, the percentage increase fell to 70%. Health Canada reports that in 1994 Canadians spent $9.2 billion on drugs, representing 12.7% of total health care spending.
A 1997 PMPRB report, Impact of federal regulation of patented drug prices, compares price changes and estimates of total savings. The Patented Medicine Price Index (PMPI) measures annual price changes for all patented drugs; in methodology it mirrors Statistics Canada's Consumer Price Index (CPI). With the exception of 1992, the PMPI recorded smaller percentage increases than the CPI from 1988 to 1993; in 1994 and 1995, prices of patented drugs actually declined.
Between 1988 and 1995, consumer prices measured by the CPI increased an average of 3.1% per year; average prices for patented drugs, measured in the PMPI, increased by only 1.6% per year. In the same period, the price of nonpatented medicines rose by 4.25% annually.
Fig. 1 indicates the annual % change of 4 price indexes from 1988-95: the Industrial Product Price Index (pharmaceuticals) [dot]; the Patented Medicine Price Index [small x]; the Nonpatented Medicine Price Index [square] and the Consumer Price Index [triangle]
Source: Statistics Canada, Patented Medicine Prices Review Board |
This column was written by Lynda Buske, chief, physician resources information planning, CMA. Readers may send potential research topics to Patrick Sullivan (sullip@cma.ca; 613 731-8610 or 800 663-7336, ext. 2126; fax 613 523-0937).
 |
Send a letter to the editor responding to this article
Envoyez une lettre à la rédaction au sujet de cet article |
Pulse