• Higher costs do not necessarily mean better quality.
    Generics - a lower cost alternative


    Yes, Generic medicines are evaluated by Health Canada to confirm that they are bioequivalent to their respective brands, that is, they are equal in terms of safety, the way they function in the body, and have the same level of high quality similar to their brand-name counterparts.

  • In CANADA,
    generics cost an average of
    less than brand-name drugs

  • Generic drugs accounted for 57% of all
    dispensed prescriptions
    in 2017

  • Generics are every bit as safe and effective
    as the brand-name drug


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Evidence supporting the benefits of choosing generic drugs instead of the brand-name drug.

  • Identical/similar efficacy and safety as brand-name drugs

    To prove that their products are safe and effective, generic drug manufacturers must demonstrate that the generic drug works in the same way as the brand-name drug within the body.

    Although a generic drug contains the same amount of active ingredient as the reference product (the brand-name drug) and acts in the body in a similar manner, the excipients or non-active ingredients such as fillers and colouring substances may be different from those of the brand-name drug. The generic manufacturer must also provide data that the different excipients used in the generic drug did not change the quality,safety or effectiveness as compared to the brand-name drug.

    In the manufacturing stage, there are quality standards pertaining to the ingredients, manufacturing processes and facilities for all drugs, which should meet the Health Canada's guidelines for good manufacturing practices. In addition, all generic drug manufacturers must perform a series of tests, both during and after production, to show that every production batch of the generic drug meets the requirements for that product.

    Once the generic drugs are marketed(post-marketing stage), they are monitored by Health Canada in the same way as other drugs. Scientists and clinicians in the Health Products and Food Branch of Health Canada evaluate reports from consumers, manufacturers, healthcare professionals and other regulators. When issues are identified, actions can be taken, including: publishing and distributing new safety information for healthcare professionals and patients, changing the product labeling and if needed, removing the product from the market.

    Therefore, generic drugs come with a benefit of being chemically identical to their brand-name counterparts; however, the cost of generic drugs is just a fraction of that of the brand-name drug.

  • Increased push by the Canadian government to increase generics prescriptions resulting in cost savings

    The pharmaceutical industry in Canada is regulated by both the federal and provincial governments.

    • Federal government has control over drug patents, their approval and labeling, and ensuring competition among drug manufacturers.
    • Provincial government is responsible for the funding of all healthcare services.

    Most of the regulations set by provincial governments has focused exclusively on promoting the substitution of generic drugs for brand-name drugs. Substitution towards the less expensive generics is typically achieved by implementing:

    • Product selection (switching from a brand-name drug to a generic drug) and
    • Price selection (choosing the least-expensive generic drug).

    Together, these regulations direct the physician to prescribe generics and the pharmacist to dispense the least expensive generic drug available for all prescriptions. Thus far, the implementation of these rules has led to a greater use of generics and containment of costs.

    Provincial governments have also been promoting use of generics via their public drug plans. In 2017, generic drugs were dispensed to fill 70.6% of retail prescriptions in Canada, or 474 million prescriptions. These drugs were reimbursed as low as 18% of the price of the brand-name drug resulting in significant savings to the healthcare system.

    There has also been an increased pressure on generic manufacturers to reduce the costs of generic drugs by the pan-Canadian Pharmaceutical Alliance (pCPA), which was established in 2010. The pCPA uses the combined purchasing power of the provinces to achieve lower prices for both generic and brand-name drugs. This has resulted in the average price of a generic drug prescription in Canada decreasing from $26.23 in 2010 to $20.92 in 2015.

  • Canada's generics industry has cut prices by up to 40% in its 5-year deal with provinces

    The pCPA on behalf of the participating federal, provincial, territorial drug plans and the Canadian Generic Pharmaceutical Association (CGPA), announced a reduction in generic drug pricing on January 29, 2018. This new 5-year initiative is effective as of April 1, 2018, wherein the prices of nearly 70 commonly prescribed drugs would be reduced between 25% to 40%. This amounts to an overall discount of up to 90% with respect to the brand-name equivalents.

    This initiative builds upon existing money-saving efforts made by the pCPA and the CGPA, which has saved participating drug plans over CAD$1 billion over the past 5 years. It is estimated that the new initiative will result in government savings of CAD$385 million in the first year and up to CAD$3 billion over the next 5 years.

    Overall, this initiative hopes to achieve the following milestones:

    • Provide significant savings for all Canadian patients and employers
    • Increase the sustainability of drug plans
    • Improve consistency in pricing and access to new drugs across the country
    • Improve Canada's position in the global rankings for generic drug pricing


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