B.C. is drafting legislation to make generic prescription drugs cheaper!
In a move to follow the Ontario legislation, the B.C. government aims by April 2013 to drive generic pricing for prescription drugs down to 25% of the brand name cost. Currently generic drugs cost as much as 40% of their brand-name drug counterparts.
There has long been compelling arguments for Plan Sponsors to switch from brand name coverage to generics. Plan sponsors can save significantly by introducing generic substitution clauses into their group benefit plans. If generic penetration in Canada was increased by just 1%, drug plans would save an estimated $229 million annually. With the new legislation the argument is even stronger for employee benefit plans to switch to generic coverage on prescription drugs.
What are Generic Drugs?
Generic drugs are copies of brand-name drugs that are produced once the brand-name drug’s patent has expired. Brand-name drugs and their generic alternatives have bioequivalent medicinal ingredients; that means the medicinal ingredients are chemically identical. Generic alternatives may look different than their brand-name drug equivalents, but they work the same.
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