Months after Canadian provinces and territories agreed to buy six widely prescribed generic drugs in bulk with an eye toward saving $100-million, a new study warns that bulk purchasing of pharmaceuticals can result in poorer health outcomes.
Researchers at the Fraser Institute, a non-partisan Canadian public policy think tank, examined bulk pharmaceutical purchase agreements in the United States, Europe and New Zealand, in an effort to quantify savings and identify potential negative consequences.
Their findings, released Thursday, sound a note of caution. While governments can save taxpayers money with bulk drug buys, the report found that they run the risk of inadvertently raising non-pharmaceutical health costs and limiting patient access to optimal medicines.
“In virtually all cases, bulk purchase agreements provide savings to drug plan sponsors, but choice and flexibility are often sacrificed,” said Dr. Kristina Lybecker, the Fraser Institute senior fellow who authored the report, “ The Bulk Purchase of Pharmaceuticals ,” released Thursday. “These savings come with the potential for negative consequences, including risks to patient health and well-being, and reductions in pharmaceutical innovation.”
Buying prescription drugs in bulk reduces their cost per unit. The more a government buys, the cheaper the price.
As pharmaceutical costs escalate at a rate that outpaces inflation, governments around the world have scrambled to combine forces to take advantage of the cost-savings associated with volume.
Late last year, provinces and territories, with the exception of Quebec, teamed up to buy in bulk six generic drugs used to treat everything from high cholesterol to depression. They are now considering a similar approach to buying name-brand medicines.
At the federal level, Health Canada has weighed getting in on the action. The agency purchases about $400-million worth of medicines a year for Aboriginal Canadians through its Non-Insured Health Benefits program.