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Prescription medication can put a lot of pressure on your employee benefits budget. That’s because researching, developing and launching a new prescription drug is an expensive undertaking. But once that new drug has been developed, copying it for sale as a generic drug is a relatively straightforward procedure.

New drugs are patent-protected.

To ensure continued investment by pharmaceutical companies, innovating pharmaceutical companies are given exclusive rights under Canadian patent law. When the patents expire, the medication may be produced and sold as a generic drug by either brand-name companies or generic drug manufacturers.

Without the overhead costs associated with new drug research, these generic drugs can be sold to consumers at a much lower price.

Are generic drugs safe?

Before any drug can be sold in Canada, it must be approved by Health Canada. That includes generic drugs. In fact, generics must have the same amount of the original active ingredient as the brand-name drug and work the same way in the body. What’s more, both generic and brand-name drug manufacturers must meet the same quality standards for ingredients, assays, manufacturing processes, and facilities.

What about special cases?

Although the active ingredient in generic and brand name drugs must be the same, inactive ingredients such as fillers and preservatives can be different. In a very few cases, patients may be allergic to an inactive ingredient or unable to tolerate it. Doctors can access a list of ingredients in both brand-name and generic drugs to protect those patients.

Why should you care?

Prescription drugs represent a significant part of most health care benefits budgets. Safe, Health Canada-approved generic drugs can reduce out-of-pocket expenses for employees and help keep your company’s benefits plan sustainable.

If your company is considering ways to reduce the cost of your drug plan, contact us for information and resources to help ease the transition.

Michele Mactaggart
President, Bensol