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Quebec Health Minister Gaétan Barrette announced Sunday that he reached an agreement with the pharmaceutical industry over generic drugs.

“This is a new era,” Barrette said of the agreement reached with Canadian Generic Pharmaceutical Association last week that will save Quebec more than $1.5 billion over the next five years.

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Barrette would not specify how much more, but said Quebec spends nearly $800 million a year on generic drugs and the deal cut with the pharmacy industry represents an annual cost reduction of about $300 million, or about 40 per cent.

Quebec had planned to open the generic drug market up for bids, a process that analysts said would cut costs by 25 to 35 per cent.

The deal “will provide substantial savings for the health-care system and help ensure the ongoing viability of the generic pharmaceutical industry,” Jim Keon, president of the Canadian Generic Pharmaceutical Association, said in a statement.