The Canadian government announced final regulations on Friday that should cut billions of dollars from patented drug prices that are among the highest in the world, overcoming heavy opposition from pharmaceutical companies that may eventually challenge the new rules in court.
The biggest reform to Canada's drug price regime since 1987 would save Canadians C$13.2bn ($10bn) over a decade.
The rules will save money for patients, employers and insurers - including the government - at the expense of drug company profits. They could also eventually cut the earnings of drug makers in the US, the world's largest pharmaceutical market.
The Canadian Life and Health Insurance Association called the regulations "a crucial step to lower prescription drug costs for all Canadians".
The province of British Columbia also applauded the move, saying in a release: "People in BC and across Canada are now better protected against excessive drug prices set by manufacturers."
The new rules were largely in line with a December 2017 draft. They came after months of delay prompted speculation that the government would back down in the face of industry lobbying or simply run out of time before Canada's October election.
"We are taking the biggest step in a generation to lower the price of drugs in Canada by moving forward with these regulations," Minister of Health Ginette Petitpas Taylor said in an interview.
Petitpas Taylor said the new rules would lay the foundation for a new national drug programme.
Prime Minister Justin Trudeau's government is expected to announce a programme to cover the cost of prescription drugs for some or all Canadians, but the scope of the initiative is not yet clear.
Canada will change the list of countries to which the federal drug-price regulator, the Patented Medicine Prices Review Board (PMPRB), compares domestic prices.
The United States and Switzerland - where prices are highest - will be dropped from the list. Canada will also let the agency consider the cost-effectiveness of new medicines.
The government will require drug makers to disclose some confidential discounts to the PMPRB, which sets maximum prices.
Initially expected to take effect in January, the regulations were delayed so the government could review feedback. They will now go into force on July 1, 2020.
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