A National Formulary for Canada

The University of Calgary, Calgary, Alberta, Canada
Canadian Public Policy (Impact Factor: 0.38). 02/2004; 30(4):445-452. DOI: 10.2307/3552524
Source: RePEc


This article analyzes the benefits and costs of replacing Canada's ten different provincial formularies with one single national formulary. The 2002 Romanow Commission on the Future of Health Care in Canada recommended that Canada should have a National Drug Agency which would maintain a national formulary, replacing the existing provincial formularies which balkanize drug markets across Canada. This recommendation has been in part incorporated into the Common Drug Review in which the provinces (excluding Quebec) have agreed to undertake a single evaluation of all new drugs; provinces, however, retain their own formularies and decide which products to list. This balkanized approach to listing and insurance coverage of drugs substantially weakens the bargaining position of the provinces and leads to higher costs.

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    • "The province also requires that pharmaceutical companies sell formulary drugs at the lowest prices available throughout Canada. In one case, Quebec removed thirty-seven products from its formulary after the manufacturer was found to have sold one of its products at a lower price in the province of Saskatchewan (Hollis and Law 2004). These cost-containment policies have been offset, however, by Quebec's fifteen-year rule, according to which newly approved drugs are fully covered for fifteen years after being included in the formulary, even if the patent expires and a less expensive generic version becomes available in the interim. "
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