To keep prescription drug coverage costs from increasing even higher than they are, Saskatchewan Health takes steps to control costs.

Interchangeable products are different brands of the same drug with the same strength and dosage form that are equivalent in therapeutic effectiveness and quality. There are two kinds of interchangeable products:

Low cost alternative 

In order to ensure price stability for the Formulary period, Saskatchewan Health requires drug manufacturers to provide guaranteed maximum prices for the period. The prices constitute the maximum price that Health will allow for those products during the effective Formulary period.

Any drug in a low cost alternative interchangeable group can be used to fill a prescription. The drug cost component in the approved prescription price is the actual acquisition cost of the drug up to the lowest price listed in the Formulary within that interchangeable group. 

Standing offer contract (SOC)

Saskatchewan Health tenders high volume drugs in certain interchangeable groups to obtain the lowest possible price. An accepted tender, called standing offer contract, requires the manufacturer to guarantee delivery of the specific drug to Saskatchewan pharmacies through approved distributors at the contracted price. In return, the manufacturer's product will be used almost exclusively. This tender process saves Saskatchewan residents and the Drug Plan a considerable amount annually.

Implementation of the maximum allowable cost policy began on July 1, 2004. Currently this policy applies to one drug class, the proton pump inhibitors, and it will be expanded to other drug classes in the future. Savings achieved will be available to fund significant new therapies that will be coming in the future and will help to ensure the viability of the Drug Plan.

Under the new policy, the Drug Plan obtains expert advice on which prescription drug products within a group of similar medications are safe and beneficial, and the most cost-effective. The price of the most cost-effective drugs are used as a guide to set the maximum price the Drug Plan will cover for other similar drugs used to treat the same condition. The maximum allowable cost is not necessarily set at the price of the lowest cost drug.

Physicians can continue to prescribe whichever drug they choose. This new policy only limits the amount that is reimbursed.