[Ip-health] Canada Generic Drug Study

[Aidan Hollis]

The Canadian Competition Bureau today released a study on the generic drug
industry in Canada. This is useful background material for anyone who wants
to find out the difficulties of creating a competitive generic drug sector
in a market with insurance. According to my reading of the report, in
Canada, while the generic manufacturers are highly competitive, the benefits
of competition benefit are not entirely passed on to consumers. In effect,
it appears that generic firms compete for shelf-space in pharmacies by
offering rebates, which are generally not passed on to payors, perhaps since
insured consumers are not highly responsive to prices.

http://www.competitionbureau.gc.ca/internet/index.cfm?itemID=2495&lg=e

It appears that the Canadian provinces are now developing responses to this
situation, so that as insurers they can capture more of the benefit from
generic competition.

Aidan Hollis

Associate Professor
Department of Economics
University of Calgary

2500 University Dr NW
Calgary Alberta
T2N 1N4 Canada

tel: 403 220 5861  fax: 403 220 5861
email: ahollis@ucalgary.ca
web: http://econ.ucalgary.ca/hollis.htm