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Ontario's generic drug cuts being watched by other provinces |
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Generic drugs in Ontario presently sell for approximately half the price
of equivalent brand-names. The Ontario government plans however, to slash pharmacy services funding by more than $1Billion per year, with a view to lowering the price of generic drugs even further to a quarter of the cost. It also plans to prohibit $800 million a year in what are known as "professional allowances" that generic drug makers pay pharmacies to stock their products. Independent pharmacists say losing the professional allowances could mean the difference between staying in business and going under. The association of Ontario pharmacists says it is "deeply concerned about the impact these cuts will have on patient care and services." According to group, the cuts to Ontario pharmacy will result in:
Local pharmacist and new owner of Wardrop Pharmasave in Port Elgin and Pharmasave in Kincardine, Rob Rogers says that most Ontario pharmacies are owner-operated small businesses. "Most of us aren't like the big chains with huge store fronts filled with product. We are small operations trying to provide our customers with the best possible service. This is absolutely going to hurt rural communities." According to statistics:
Rogers points out that dispensing fees in Ontario have not increased since 1990 and, in light of the proposed change, the government is offering an increase of $1 per dispensing fee. Pharmacists say that level of care and service is largely funded by allowances they receive from generic drug makers, which help to offset a gap in the dispensing price consumers pay and the actual cost to fill a prescription. The proposed cuts in Ontario would at first apply only to drugs paid for by the Ontario Drug Benefit Program, which supplies prescription drugs to the elderly and some disabled people. The lower prices would then be phased in to cover drugs sold to people covered by private health insurance plans as well as people who have no coverage.
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. Other provinces are also keeping an eye on the Ontario situation. A spokesperson for New Brunswick said that because it is a very rural province, most communities are served by independent and traditional pharmacies who are absolutely dependent on the generic revenue. The 'trade allowances' will mean the difference between viability and going under. The proposed cuts in Ontario would at first apply only to drugs paid for by the Ontario Drug Benefit (ODB) Program, which supplies prescription drugs to the elderly and some disabled people. The lower prices would then be phased in to cover drugs sold to people covered by private health insurance plans and people who have no coverage. Ontario's Liberal government says the move would save $500 million a year, which it appears is the crux of the matter. The Fraser Institute estimates that generic drug prices in Canada are twice as high as in the US. Canadian generics make up 63 per cent of all prescription drug purchases, compared with 75 per cent south of the border. In reaction to the government's proposed plan to take affect May 8th, the big pharmacy drug chains have begun to strke back. The country's largest pharmacy chain, Shoppers Drug Mart, has cut hours at a number of stores in the province. including the Minister of Health, Deb Matthews' own riding. Its stores will also begin charging for deliveries. Rexall, the chain that owns Pharma Plus. plans to begin charging delivery fees and has placed a hiring freeze at its corporate headquarters in addition to eliminating all student internship positions. In addition, 80 per cent of Canada's generic pharmaceutical industry is based in Ontario and, therefore, the cuts could also result in job cuts to its 9,000 person workforce The new government plan is anticipated to take affect May 8.
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