On August 6, 2010, Canadian Premiers attended their annual Council of the Federation Premiers’ Conference in Winnipeg to discuss a joint alliance among the provinces and territories for purchasing common drugs and medical supplies and equipment for the public sector.

By working together, the provinces and territories seek to leverage buying power by having a single entity negotiate drug procurement. The expected cost savings of the combined effort will no doubt have an impact on the profit margins and market shares of pharmaceutical manufacturers. This could place further strain on generic manufacturers in some provinces. Ontario, for example, has recently mandated the reduction of generic drug prices to no more than 25 per cent of the cost of the original brand name medication. British Columbia and Alberta, have also taken steps to reduce their prescription drug costs.

The nation-wide move is attributed to rising health-care costs and the growing concern for the future of Canada’s Health Care system.

For more information, please see the following link:

http://www.theglobeandmail.com/news/politics/provinces-to-team-up-on-drug purchases/article1665258/