Societal monetary benefits of pharmaceutical innovation: the case of ramipril in Canada

Abstract

Objectives To estimate the monetary benefits of ramipril and its distribution over time among four beneficiaries in Canada: the drug developing manufacturer, generic manufacturers, the healthcare sector and employment sectors. Methods Monetary benefits to developing and generic manufacturers were defined as the profits from the drug. A dynamic Markov model was used to estimate monetary benefits to the healthcare and employment sectors in terms of cost avoidance associated with prevented cardiovascular events, including stroke, myocardial infarction and heart failure, and lost productivity due to disability and premature death in the working population. Key findings Cumulative monetary benefits of ramipril over 18 years (1994)(1995)(1996)(1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011) were estimated at CA$3.9 billion, of which the developing manufacturer accounted for 41%, generic manufacturers 4%, the healthcare sector 40% and employment sectors 15%. The benefits for the developing manufacturer were dominant before, but dramatically decreased after, the patent period. Benefits for the healthcare sector started to decrease from 2007, corresponding to the decreasing population taking ramipril during the same period. Higher compliance or efficacy lead to larger benefits for the healthcare and employment sectors, whereas monetary benefits for manufacturers were unchanged. Conclusion Societal monetary benefits of ramipril are distributed differently for the four beneficiaries and over time. Patent, compliance and efficacy play a vital role in the determination of the benefits. High pricing of generic drugs probably makes the benefits to the healthcare and employment sectors lower than expected because that most likely influences some patients to discontinue or switch to alternative drugs.