Okay.
I'm going to go straight to the impact; I think that's what people are really interested in. There's a lot of conflicting information out there about what the impact of these changes will be, ultimately, on prices, revenues and savings in the Canadian system.
There are three types of medicines, if you want to unpack the impact. First are all the existing drugs under our jurisdiction today—that is, everything that's patented and on the market today. As a result of these changes, their list prices, on average, will go down by about 5%, and that will result in about $4.6 billion in savings or less pharmaceutical spending over the next decade. That's for all existing medicines today. They will account for the lion's share of sales over the coming decade and result in about $4.6 billion less in pharmaceutical expenditures.
Then we have category I drugs. Their list prices will go down by about 8%. The corresponding savings to the system will be in the order of about $1.1 billion over the next decade.
Finally, we have category II medicines. Their list prices are expected to go down about 13%, and the corresponding savings to the system will be about $500 million.
Slide 11 puts this in context. It gives you a fictional example of a drug that currently has a price of $1,000 and how this would be impacted, either as an existing grandfathered drug or a category I or category II drug going forward. It gives you some context as to what to expect on a go-forward basis.
It's important to understand that for existing drugs, the ceiling price that we're going to apply is the highest international price of these new 11 countries. It's going to take quite some time before Canadian prices align with median and OECD prices or with median prices of new countries that we're comparing ourselves to. You can see on slide 12 that we're the second highest. It won't be until all these existing drugs have exhausted themselves and have been displaced by new medicines that have lower ceiling prices that we will see a reasonable alignment of Canadian prices with the OECD median.
I mentioned the global impact. If you add up all those numbers, it's about $6.2 billion over 10 years. That sounds like a lot, but when you consider, to put it in perspective, that we currently spend about $18 billion a year on patented drugs and that by 2030 we'll spend about $22 billion a year, you see it's not an insignificant sum, but neither is it an earth-shattering sum either. It's about 3.9% of total spending over the next 10 years.
With that, I'm happy to answer any questions that the committee members may have.
Thank you for your patience.