Social Policy in Ontario

Ontario stands to save $2 billion in drug reforms

Posted on August 3, 2011 in Health Delivery System

Source: Toronto Star — Authors: Tanya Talaga

TheStar.com – health/newsfeatures
August 3, 2011.   Tanya Talaga, Queen’s Park Bureau

Ontario should save $2 billion over the next three years as 44 medications — from cholesterol fighting Crestor to the targeted cancer therapy Gleevec — come off patent and the fruits of drug reform take hold, the Star has learned.

Savings made will be poured back into reducing the ballooning $47 billion health-care budget and buying new medications under the Ontario Drug Benefit Plan — the list of medications covered by the province.

Drugs make up about 10 per cent of the province’s $47 billion health spending, and 32 per cent of the $25 billion Ontarians spend on private health care.

Among the other drugs about to lose their patent protection are: Plavix, for which the province paid $84.4 million last year, the pain killer Oxycontin ($77.8 million), and Botox ($9.9 million.) Between them Crestor and Gleevec cost almost $200 million.

The savings come at a good time for the health budget. Drugs are one of the fastest growing components as the prices for new, exotic treatments skyrocket and more boomers turn 65, the age at which drugs become heavily subsidized.

Beyond the savings from expiring patents, government officials were quick to claim credit for a series of changes in the rules for pharmacies that it says contributed to the expected savings.

“The results are pretty clear. If you put your mind to it you can get better value,” Health Minister Deb Matthews said of last year’s changes that included caps on generic drug prices and, most controversially, an end to the drug industry practice of paying millions in listing fees to pharmacies.

“There were a lot of fears — that drug stores would close and all sorts of other horror stories that just did not materialize.”

Ontario sought the changes after the government realized it was paying some of the highest prices for generic medication anywhere in the world while being one of the biggest customers.

Pharmacists were angered by the reforms, which eliminated nearly $750 million a year paid to them in professional fees — money they are essentially given to stock generic products. The government said those fees kept prices high and the cost was borne by taxpayers. Pharmacists were permitted to increase their dispensing fees in compensation.

In response to the reforms, Rexall announced a hiring freeze and slashed its pharmacy student and intern programs. Shoppers Drug Mart cut hours and instituted delivery fees at stores in London, Ont.

New Democrat MPP France Gélinas (Nickel-Belt) said the NDP voted in favour of drug reform, but scoffed at the Liberal effort to claim credit, saying the arrival of new generics is the main saving.

“The patent rolling off has nothing to do with the action of government,” she said. “The fact is they would have been way cheaper regardless of what the government has done.”

Reform came upon the pharmacists and generic drug industry quickly, she added. “They didn’t feel like they were heard or consulted,” Gélinas said. “There is a lot of resentment in the industry.”

The lower drug prices Ontario mandated also mean lower prices for those who pay cash for medication or through an employer-run benefit program, Matthews said.

“Everyone who needs drugs won on this and everyone who needs health care wins on it, too,” Matthews said.

The drug reform fight will also be played out at the polls in the Oct. 6 provincial election.

The Progressive Conservatives have at least three candidates who are pharmacists.

Jeff Yurek is the PC candidate for Elgin-Middlesex-London; Farid Wassef, a community pharmacist practising in Stouffville, is the PC candidate for Oak Ridges-Markham; and Ben Shenouda is the Tory candidate for Brampton West and co-founder of the Independent Pharmacists Association of Ontario.

< http://www.healthzone.ca/health/newsfeatures/article/1033626–ontario-stands-to-save-2-billion-in-drug-reforms >

Tags: budget, Health, pharmaceutical, standard of living

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