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One of the major changes announced Friday would remove the U.S. and Switzerland from the list of countries Canada looks at when determining the maximum price drug companies can charge for a given medication. The government has added several other countries to the list that have similar economic conditions to Canada’s, but lower drug prices, including Australia, Belgium and Japan.

The new regulations will also require drug companies to reveal the real prices they charge insurers. Currently, the PMPRB can only regulate the list prices drug companies provide, despite the fact that the companies often offer insurers significant rebates.

The government is also adding new factors the PMPRB must consider in evaluating whether drug prices are excessive, including the health benefit a medication provides relative to its cost, the size of the demand, and GDP.

It's not necessary to penalize those patients that are the most in need, most vulnerable

Together, Ottawa estimates the changes will result in savings of $8.8 billion in 2019 dollars over the next 10 years, or $13.2 billion with inflation and other factors included. The new regulations are set to come into force on July 1, 2020.

On Friday, Innovative Medicines Canada (IMC), which represents the pharmaceutical industry, warned the changes could reduce investment in research and development and make companies less likely to launch their drugs in Canada. “Given what we have heard to date, our fear is that patients will be worse off,” IMC president Pamela Fralick said in a statement. The organization said the new regulations could lower drug ceiling prices by up to 70 per cent.