Reforms to cut generic drug prices

Posted on April 8, 2010 in Health Debates

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April 8, 2010.   Rob Ferguson, QUEEN’S PARK BUREAU

Patients with prescriptions for generic drugs would pay about half the current cost under controversial new reforms touted Wednesday by Health Minister Deb Matthews.

But pharmacists warn the lost income – $535 million annually by the government’s count – will leave them with fewer staff, less time and shorter hours of business to serve customers, and perhaps some store closings. That would result in longer wait times and less counselling for patients on how to take pills or manage chronic diseases such as diabetes, they say.

“I need to pay people on my staff to do those services. That’s what those dollars are being used for,” said Donnie Edwards, the owner of an IDA store in Ridgeway, near Fort Erie, and a member of a group called Ontario’s Community Pharmacies.

“Pharmacists cannot survive with this kind of funding gap.”

The looming battle for public opinion between the government and pharmacists hinges on almost $800 million a year in “professional allowances” paid by generic drug manufacturers to druggists.

The money goes to win shelf space for their products over competitors in the highly competitive generic industry, where companies make drugs that copy brand-name pharmaceuticals no longer under patent protection. The new law would set prices at 25 per cent of the original brand drug price, down from 50 per cent or more now.

But Matthews, whose government spends $800 million a year on generic drugs for seniors and social assistance recipients under the Ontario Drug Benefit (ODB) Plan, fingered the allowances as the chief culprit for making generic prices in Ontario among the highest in the world.

That’s why she said Wednesday the government plans to ban the allowances, while pouring $246 million back into Ontario’s 3,306 pharmacies through higher dispensing fees for drugs under ODB, a $100 million pot of cash for patient counselling fees and other financial support for pharmacies in remote or underserviced areas.

The net saving for the government is $535 million annually once the reforms are fully phased in by 2013. The money will be used elsewhere in the health-care system as cost pressures continue to rise with an aging population.

“I will not go so far as to call them kickbacks. … but there are people who would do that,” Matthews said of the allowances, noting the price in Ontario for a dose of the blood pressure medication Enalapril is 42 cents, compared with 9 cents in the U.S. “That is simply not fair … these reforms are in the patients’ interest.”

Pharmacies will have to “adjust” to life without the allowances, Matthews added.

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2 Responses to “Reforms to cut generic drug prices”

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