Quebec taxpayers will save more than $1B thanks to generic drug deal, says health minister

The Quebec government and generic drug suppliers have reached an agreement that will save taxpayers hundreds of millions of dollars while avoiding the tendering process, according to the health minister.

GatanBarrette made the announcement during a news conference Sunday morning. The deal will takeeffect Oct. 1.

Barrette says Quebec spends about $800 million annually on generic drugs, and thatthis new agreement will mean a decrease of more $300 million a year, which works out to a roughly 40 per centreduction.

In a statement, Jim Keon, president of the Canadian GenericPharmaceuticalAssociation (CGPA), said he believes the agreement is "a much better path forward for taxpayers, patients, healthcare providers and the generic pharmaceutical industry than a risky tendering system."

Last month, with the looming possibility of a tendering process being introduced, drug companies came to the government with a proposition to lower drug pricesby $1.5 billion over five years.

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Barrette said the deal, reached two days ago, will allow for more savings, but did notsay how much more.

Tendering process used as leverage, Barrette says

Last June, the provincial government adopted legislation giving it the oversight to drop generic drug prices, including the possibility of introducing a tendering process.

Last month, the government and pharmaceutical industryplayers were trying to negotiate an agreement to bring down the price of generic medications but Barrette said the companies pulled out of "within a hair"of signing. Keonhas said the associationnever walked away from the negotiations.

When talks broke down, that's whenthe government announced it would launch its first tendering process July 1. Barrette said the day before it was to begin,he got a call from the association saying it wanted to return to the negotiating table.

Barrette said the possibility of a tendering process was a form of leverage on the generic drug manufacturers.

Details on how the agreement will be implementedare expected to be finalized in the coming weeks.