As I mentioned earlier, when you have a single drug product on provincial formularies supplied by two, three, four, five, or some number of different companies, the agreed price is the same for all those companies on the formulary. Hypothetically it might be 50¢ for all four suppliers. That does suggest the four suppliers are not fighting it out for price.
Why is that? The reasons are murky at best. Part of the failure of the provinces to deal with the drug price problem is that they're secretive. How these prices are arrived at is not known. The agreements that pCPA has negotiated for product listings are entirely a black box. Anecdotally, what I've heard is that the prices in the formulary are fictions. The way the manufacturers compete against one another is in the rebates they give to various partners in the supply chain. “Rebate” is a polite term for kickback.
In Ontario, these rebates have been legislatively prohibited for some years now, but the drug manufacturers are very clever at finding end runs around that law. What really is happening in the industry, I'm led to believe, is that the nominal prices listed in formularies, such as the 50¢ I used in the example before, are really fictions. Suppliers one through four will fight it out with each other by how much they can slip to other partners in the supply chain to get their product instead of someone else's onto the pharmacists' shelves.
None of that smells to me as clean business. No professor is going to succeed in getting to the bottom of it. I've tried. Most of the information I'm using to relate the story to you is highly anecdotal. You would need the Competition Bureau, which has the power of summonsing documents and compelling witnesses, and likewise the Competition Tribunal, to better understand how this price-fixing system is working, but have no doubt that there is a price-fixing system.