New world order
So how are private drug plans going to do that? As the changes are either new or pending—depending on which jurisdiction a plan sponsor is located in—it’s not quite clear.
Gold’s first suggestion: bargain with pharmacies. “What does that look like? It may look like a preferred pharmacy provider network. It’s not a new concept, but it’s an important one.”
In some cases, larger plans can cut deals directly with generic manufacturers, although the dispensing issue can be thwarted by pharmacy interests. For example, when Medavie Blue Cross entered into a preferred arrangement with Abbott Laboratories after the expiry of Abbott’s patent for Biaxin BIC 250 and 500, the negotiated price was below that of the generic versions, resulting in the lowest cost for plan sponsors. However, the dispensing pharmacist was not included in the deal, and refused to take part, effectively killing it.
Plan sponsors can learn from this by engaging in tripartite deals between the manufacturer and pharmacist to ensure everyone is happy.
There are several ways for plan sponsors to exercise consumer power to control drug costs, including:
• consumer education;
• formulary management;
• private plan negotiations with pharmacy;
• private plan negotiations with pharmaceuticals; and
• relationship to public formulary, government provision of medications.
So what are the threats to plan sponsors? Are there any possible scenarios that might see generic drug prices rise and/or services decline?
According to Kealey, the claims of impending reductions of service hours that chains such as Shoppers Drug Mart have made are simply rhetoric.
“There are wild accusations flying around that the government of Ontario is going to cut local health, people won’t get their drugs, people will die on the streets, dogs will live with cats, and all manner of horrible poxes will descend on the world as a result of this legislation,” he said. “In 2009 in Ontario, there were only 2,000 prescriptions filled between the hours of midnight and 8 a.m., so this idea of having a 24-hour pharmacy is ridiculous as far as I’m concerned.”
“I’ve been an advocate in healthcare for a number of years and I’ve never seen a profession that reacts to proposals with this kind of vehemence or vitriol in advance of anything that’s put in front of the legislature,” he added.
According to Gold, the consultation period between government and industry is over and the legislation has yet to be tabled, but the lobby is on. “It’s too soon to say that the policy that was announced is in fact the same policy that will be adopted.”
He added that while professional allowances will definitely be banned in Ontario, so-called commercial terms will not.
“According to the government, commercial terms will be regulated, but we don’t know much about how regulated they’ll be,” he said. “You need to see what the overall package is and be sure that what disappears in a good way doesn’t reappear in other forms.”
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