Quebec pursues drug companies over prices

The Quebec government is going after pharmaceutical companies to get the same bargain prices awarded to Ontario under a secret discount system made public last month.

Quebec contends that some pharmaceutical companies may have violated a deal negotiated four years ago that requires them to offer the province the lowest price available for prescription drugs sold anywhere in the country.

If drugs Ontario is buying drugs for less than what Quebec pays, the province might take legal action against pharmaceutical manufacturers that refuse to refund the difference.

"There's a provision in the arrangement that states that drug manufacturers must offer Quebec the lowest price in Canada. If prescription drugs sold in Ontario were the lowest in the country, then Quebec should have been offered the same price," said Ministry spokeswoman Karine Rivard. "If Quebec was cheated, we will take appropriate action. We are currently evaluating the situation."

Quebec negotiated the agreement in 2006 around the same time Ontario passed legislation aimed at lowering the cost of medications it finances under its drug plan. In return for the "best available price," Quebec agreed to maintain a generous payment system for prescription drugs.

Manufacturers of brand name drugs in Quebec receive the full negotiated price for five years after the 10-year patent protection on a drug has expired. The first manufacturer to offer a generic version in the province receives 64 per cent of the brand-name price. Subsequent generics receive 50 per cent.

Quebec said it has no plans to change this arrangement because it helps attract investments from drug companies. The province estimated that up to 45 per cent of research and development of prescription drugs in Canada takes place in Quebec.

Quebec introduced more than a decade ago a mandatory universal drug benefit plan, making it a huge purchaser of pharmaceuticals. Quebeckers without private coverage pay into a publicly funded system, which in 2008-2009 cost the province $3.7-billion.

Both sides appeared content with the arrangement until revelations that pharmaceutical companies' secret arrangement with Ontario was depriving Quebec of the same huge rebates. The deal in Ontario appeared to involve 47 drug companies who paid back the government lump sums. It was estimated by industry sources that the payments brought the price for Ontario to more than 40-per cent below the market rate.

If any of the medications are listed on Quebec's drug formulary, it could represent millions of dollars. Much will depend how many drugs were involved, for what length of time the secret scheme was in place and the amount charged Quebec above the "best available price" arrangement.

"If we discover there was a secret arrangement and that it was made public … then I will possibly have to act against a supplier and claim the difference," Health Minister Yves Bolduc said last month during a National Assembly committee hearing.

The Parti Québécois accused the Charest government of being manipulated by the drug manufacturers for failing to come down hard on those who violated the agreement.