Grant: Operating Grant

Since 2010, several provincial governments in Canada have announced reductions in the maximum price of generic drugs, setting new price caps as a percentage of the price of the branded drug product. Despite their popularity, evidence suggests that price caps may result in higher priced generics than would exist without regulation, and may even inhibit new generic drugs from entering the market. The objectives of this study are to examine the influence of different price caps on market entry of new generic drugs and assess the impact of different price caps on generic drug prices across Canada. Canada-wide data on pharmaceutical purchases made by hospitals and pharmacies will be accessed through IMS Brogan Canada. Data will include sales information on all branded and generic drug products within a selection of interchangeable drug product categories, including each product's launch date, its sales in dollars and units, and its therapeutic classification. Publicly available information from the Canadian Patent Register and provincial governments will determine the patent expiry date for branded drug products and define different regulation periods in each province. To examine market entry, we will calculate the number of generic equivalents that entered the market in the year following the patent expiry of selected drugs and determine statistically whether the number of generic entrants is significantly different between regulation periods across provinces. To assess the impact of price caps on generic drug prices, we will compare the price ratios between branded and generic drug products within interchangeable drug categories between different regulation periods across provinces. Univariate analysis will compare the distributions of price ratios across regulation periods and multiple regression analysis will identify factors associated with price ratios. The study will provide insight into the effects of price-caps on generic drug prices and market entry in Canada.