A new Mercer Communiqué provides information on changes to the British Columbia drug system that will affect the price of generic drugs for the British Columbia PharmaCare plan, employer sponsored drug plans and the general public.
Maximum generic drug prices will decrease in stages, based on whether the generic drug is already in existence or is a “new” generic drug (released on or after November 1, 2008). The price of new generic drugs paid through PharmaCare will be decreased as of July 28, 2010. By April 1, 2012, the negotiated maximum generic drug price as a percent of equivalent brand drug price for all British Columbians will be 35%.
Discussing implications for drug plan sponsors, Mercer notes that:
“Decreases in generic costs may not significantly reduce their drug costs because a typical plan sponsor spends only 25% to 30% of total dollars on generic drugs, while brand name drugs represent the majority of spending. The net impact for British Columbia plan sponsors will depend on the current mix of generic and brand drugs under the plan and the reaction of the pharmacy industry in the marketplace. It is too soon to be able to conduct meaningful analysis that will determine the over-all cost impact for plan sponsors.”