National drug consensus emerging

In a letter last week to her provincial colleagues, Ontario Health Minister Deb Matthews warned about the possibility that pharmacy chains could make bulk purchases in the province with the lowest price and sell them at a markup to other jurisdictions. To counter this, she called for the formation of a single national system for generic prescription drugs.

The Globe explains that provinces in Western and Eastern Canada are working on regional joint drug-purchasing plans, while Quebec has legislation mandating that it gets the lowest cost of drugs of any province.

And Ontario’s plan to cut its generics cost by half is attracting attention to the idea of a single national system.

The newspaper explains that B.C. Health Minister Kevin Falcon stands with Ontario in that the status quo is “unacceptable,” and has given pharmacy chains in British Columbia until June to table a plan to reduce the cost of generics. Failing that, Falcon is ready to take unilateral action.

Health Ministers from Manitoba and Prince Edward Island are also watching Ontario with interest and have indicated that they see merit in the idea of a national strategy.

An earlier report in Benefits Canada listed the threats to plan sponsors as a result of Ontario’s efforts at drug reform. The risk of increased prices for jurisdictions outside the province was among them.

Canada pays the second-highest prices for generic drugs amongst developed countries after the U.S. In April, the Ontario government surprised the pharmacy industry by tabling legislation that would reduce generic prices from the current level of 50% of their equivalent brand price to 25%. More controversially, it also aims to abolish the current system of professional allowances paid by generic manufacturers to pharmacies which amount to $750 billion annually.

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