Updated agreement reinforces staged pricing cuts for new generic drugs
The pan-Canadian Pharmaceutical Alliance (pCPA) and the Canadian Generic Pharmaceutical Association (CGPA) have extended their pricing agreement for generic drugs through 2028, continuing a framework that has generated substantial savings for Canadian public drug plans over more than a decade.
The extension takes effect Oct. 1, 2026, for a two-year term, according to a news release. It follows a three-year agreement signed in August 2023, which itself built on a series of successive agreements stretching back to at least 2018. The renewed arrangement carries forward existing cost-saving mechanisms, including the pan-Canadian tiered pricing framework and pan-Canadian select molecule pricing.
Generic drugs accounted for approximately 80% of all prescription drugs dispensed in Canada in 2025, according to the pCPA. The organisation brings together participating federal, provincial and territorial public drug plans to negotiate pricing on behalf of Canadians.
Mauro Chies, CEO of the pCPA, said the extension reflects an ongoing commitment to the sustainability of public coverage programmes.
“Generic drugs are crucial to Canadian patients’ health and well-being, and the collaboration between the pCPA and CGPA greatly contributes to the sustainability of the public drug plans many Canadians rely on to receive the treatment they need,” Chies said. “We’re pleased to extend our partnership with the CGPA as we continue to build on our work to generate meaningful savings that can be reinvested into health systems.”
Jim Keon, president of CGPA, said the global environment made the extension particularly timely.
“Extending our pricing agreement initiative with the pCPA is particularly important in the current global environment, and helps support continued investment, product launches and timely access to cost-saving medicines for Canadians,” Keon said.
The pCPA and CGPA have a long history of joint pricing initiatives. A 2018 five-year agreement reduced prices on nearly 70 of the most commonly prescribed generic drugs by 25% to 40% and was projected at the time to save up to $3 billion over five years. Cumulative savings from past joint efforts exceeded $4 billion for participating drug plans over the 10 years preceding the 2023 renewal, according to the CGPA.
The 2023 three-year renewal, which the 2026 extension continues, introduced a provision under the tiered pricing framework whereby new single-source generics entering the market are listed at 75% of the brand reference price and automatically drop to 55% after approximately three months — a more aggressive reduction than the 75% to 85% threshold that applied under earlier arrangements. Ontario’s implementation guidance confirmed those thresholds applied to the Ontario Drug Benefit Formulary as of Oct. 1, 2023.
The pricing initiative covers Canadians under public drug plans, private drug plans and those paying out of pocket. The CGPA has noted that pricing stability also supports ongoing investment by generic manufacturers in bringing new drugs to market.
