Employers have long struggled with the impact of rising drug plan costs. But on April 7, 2010, Ontario’s Health and Long-Term Care Minister, Deb Matthews, revealed reforms that will affect drug plan sponsors and the pharmacy industry at large: reductions in the cost of generic drugs for Ontario’s public drug system and private payers; increased dispensing and service fees for pharmacists; and new funding for access to pharmacy services in underserviced areas.
Many welcome these reforms, as both public and private payers stand to benefit. The Minister said the government is sending “a message to big pharmacy that their days of inflated prescription drug prices paid on the backs of patients are over.”
But not everyone’s happy. The Canadian Generic Pharmaceutical Association has expressed concerns, stating that “the deep price reductions announced by the Government of Ontario could undermine generic manufacturers’ ability to produce and supply generic medicines currently on the market, and their ability to develop and bring to market new cost-saving generic drugs.” Independent pharmacy owners are worried about the elimination of professional allowances (rebates that drug manufacturers pay to pharmacy owners) and how it may affect their long-term sustainability. And others fear that the increased dispensing fees proposed will create an additional cost burden for plan sponsors or members, or that the reforms on the whole will have a negative impact on the delivery of pharmacy services in the province.
The real challenge, however, lies in balancing the needs of public and private payers with those of other parties. Be prepared for more industry reactions and spirited debate as time goes on.
I’m sad to say this will be my last editorial for a while, as I’ll be taking on a challenge of my own: first-time motherhood. As of April 16, 2010, I will be on maternity leave. But I’m leaving you in good hands. Alison Wood will serve as editor during my absence—she can be reached at alison.wood@rci.rogers.com. And, as always, the rest of the Benefits Canada team is here to support you. If there’s anything we can do to better meet your needs, please let us know. In the meantime, have a great year! BC.
Alyssa Hodder is Editor of Benefits Canada.
alyssa.hodder@rci.rogers.com
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© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the May 2010 edition of BENEFITS CANADA magazine.