Social Policy in Ontario

Canada’s premiers are joining forces to rein in ballooning health-care costs by pooling their purchasing power for drugs and medical supplies.

The premiers unveiled plans on Friday to set up a national agency that would be responsible for purchasing $10-billion in prescription drugs a year as well as medical supplies and equipment.

Having one entity responsible for drug purchases for all 13 provinces and territories would lower costs on a major contributor to the growing tab for health care.

Rising health-care costs dominated the premiers’ two-day annual meeting in Winnipeg. For the first time as a group, the premiers tackled the question of whether the country can sustain a system many Canadians appear to take for granted.

“We’re really just beginning to understand how much we can do together,” Ontario Premier Dalton McGuinty said at the closing news conference on Friday. “You can only go so far on your own.”

The McGuinty government has led the way in cracking down on the rising cost of generic prescription drugs. The province waged a bitter fight with pharmacy chains this year by cutting the price of generic drugs to 25 per cent of the equivalent brand-name medication from 50 per cent.

British Columbia and Alberta have also taken steps to reduce their prescription drug costs. But they have not gone as far as Ontario, leaving Canada with a patchwork system of drug-purchasing plans.

Setting up a national purchasing agency would allow the provinces and territories to buy more drugs for less money and divert those savings into other health-care services.

“The provinces have to be innovative and find ways to offer services in the most cost efficient way possible,” said Manitoba Premier Greg Selinger, host of this year’s gathering,

The national purchasing agency was part of a two-pronged strategy devised at the meeting. The premiers also pledged to kick-start talks with the federal government over a funding accord that expires in 2014.

The federal government contributes about 20 cents of every dollar the provinces spend on health care. The provinces are slated to receive annual increases of 6 per cent under the Canada Health Transfer program, which expires on March 31, 2014.

Quebec Premier Jean Charest said he is no longer worried that the federal government will drastically cut transfer payments.

A Quebec newspaper suggested earlier this week that Finance Minister Jim Flaherty may try to tie annual health-transfer increases to gross domestic product growth. But The Globe and Mail quoted a spokesman in his office, stating that Mr. Flaherty never said health transfers would be linked to GDP growth.

“That in itself is a positive indication of where we’re going,” Mr. Charest said. “The statements made by [Mr. Flaherty’s spokesman] indicate to us that people are acting in good faith.”

< http://www.theglobeandmail.com/news/politics/provinces-to-team-up-on-drug-purchases/article1665258/ >