The aging population in Canada is something that’s been fairly widely documented. Like other industrialized nations, such as Germany and Japan, Canada
The aging population in Canada is something that’s been fairly widely documented. Like other industrialized nations, such as Germany and Japan, Canada faces an increasingly aging population. As indicated by Employment and Social Development Canada, in 2011, Canadians ages 65 and older represented 14.4 percent of the country’s population. In 2031, that percentage is expected to increase to 22.8 percent; in 2051, it is believed that the percentage will rise as high as 25.5 percent.
With an aging population comes questions – foremost, how to provide care to this growing section of the population in the most comprehensive, as well as cost-efficient, manner.
When it comes to providing prescription drugs, prescriptions that not just Canada’s elderly needs, but the entire population, Canada is in many ways at a crossroads. Historically, Canada has faced high prescription drug costs, especially in comparison to other industrialized nations. In fact, at the moment, one in ten Canadians cannot afford to fill the drugs they’re prescribed.
It’s a painful statistic, especially when considering the aging point mentioned above. What’s even more interesting is to hear pharmacists filling their customers’ prescriptions with sample drugs, knowing that their customers cannot afford prescription drug costs.
“The Patent Cliff” is a term that describes the termination of patents on many major brand-name prescription drugs. Since 2010, and in some cases earlier, the patents on major drugs, such as Lipitor and Nexium, and Crestor, have been terminated, which has allowed generic equivalents to enter the marketplace and substantially drive down drug costs.
In fact, as of last year, in a negotiated agreement made by a number of Canadian provinces, a limited number of the most prescribed generics are now available at 18% of the cost of their brand name equivalents. To give a better idea of how much value generic drugs bring to health care, it’s been documented that the generic drug industry in Canada has saved Canadian health care approximately $13 billion annually.
But, the growth in the generic drug industry has proved to be an asset not just for Canadian health care, but also for Canadian jobs. Realizing how vital generic drugs are to lower health care costs in general, Canadian provinces are increasingly working with insurance carriers to include generic drug choices in the prescription plans they offer. It’s an intelligent move, not just because it provides more selection for consumers, but also because the lower costs derived from generic drug utilization drive savings to be reinvested elsewhere in the healthcare system.
But, generic prescription drugs have proved to be a boon for the Canadian market in one other, less noted respect. The largest international generic drug maker is Apotex Inc., a company that happens to headquarters their operations in Canada. Apotex was founded in Toronto by Dr. Barry Sherman and in the past four decades has grown to become the largest privately owned pharmaceutical company in Canada.
The extent of Apotex’s operations and the influence the company has on the Canadian economy deserves some attention. This, after all, is a company that fills over 89 million prescriptions in Canada every year. It’s a company that has spent $1.5 billion in research and development in the past ten years.
It’s also a company that has manufacturing and research and development facilities in Richmond Hill, Toronto, Etobicoke, Brantford, Windsor, and Winnipeg, and employs over 5,500 Canadians. Indeed, all told, Apotex has spent $2 billion in capital investment in its Canadian facilities, an investment that will increase as more generic prescription drugs come to market.
The statistics are impressive. But, when noting how important prescription drugs will be in the future and when noting, too, how important generic drugs will be in continuing to mitigate costs, the role of generic drug manufacturers cannot be overstated. In the past ten years, Apotex has spent $800 million in legal fees to bring a larger number of generic drugs to market and further reduce the cost of prescriptions.
Indeed, as the patent cliff continues, generic drug manufacturers like Apotex will be increasingly significant drivers in lowering the cost of prescription drugs in Canada and providing Canadians a greater choice when it comes to their prescription needs.