The government of B.C. doubled back on an agreement with the province's pharmacists last Sunday, following an announcement that it would pursue a legislated reduction to the cost of generic prescription drugs.
On July 9, 2010, the Ministry of Health, under then Minister Kevin Falcon, announced a deal with the B.C. Pharmacy Association to reduce the price of generic drugs to 35 per cent of the brand name price. Expectations that the plan would save PharmaCare some $7 million annually by April 2012 have since fallen short.
"Our 2010 agreement on generic drugs promised significant savings for B.C. taxpayers and the health care system, but much of those savings did not materialize," said Minister of Health Michael de Jong in a recent government release. "At this time, we do not have confidence we will see the savings."
In April of 2010, the government of Ontario announced a legislated strategy to reduce the costs of generic drugs in that province to 25 per cent of the brand name price, by 2014.
Three months later, B.C. decided to go a different direction, opting for an agreement with retailers and pharmacists that government estimates concluded would save the health system upwards of $170 million per year.
The termination of that agreement signaled a change in direction for B.C., which is expected to adopt the Ontario model of legislated pricing for generics.
British Columbia is now expected to follow the Ontario price target, setting its sights on a 25 per cent price for generics by this time next year.
"We need those savings now, more than ever, and so I have asked my staff to draft legislation," said de Jong.
For benefit providers like Pacific Blue Cross (PBC), which provides health coverage to as many as 1.5 million British Columbians, the change is a welcome one.
The president and CEO of PBC, Ken Martin, said the savings associated with legislated reductions are likely to be felt by those paying for their drugs out-of-pocket, not just those covered by benefit packages.
"If we don't cut the cost of drugs and healthcare for employers, then employers are going to start making changes to their plans that are not beneficial to employees," Martin suggested. "Hopefully we'll see the benefits of this going forward."
Martin downplayed the effect that reducing the cost of generics could have on potential drug shortages by saying pricing exceptions would likely be made on a case-by-case basis.
At the end of the day, Martin said, the aim is to get the best deal for consumers. As for its effect on healthcare premiums in the province, "It will have some impact, for sure.
"The lower cost is really borne by the manufacturers, not the pharmacies," he said.
Here on the Sunshine Coast, pharmacist Dan Hauser is less optimistic about the plan's potential.
According to him, pharmacies are already seeing rebates from drug manufacturers drying up in response to the pricing changes. The loss of this major facet of drug store revenues could mean a reduction in staffing and clinical services and the availability of pharmacy professionals in general.
"There's going to be potential wage decreases and potentially fewer jobs for pharmacists in the future," Hauser said.
While consumers will likely see savings on their drug bills, "there's less of the front-line availability of pharmacists for patients when they need it," he added, describing the reductions as a "double-edged sword."
The PharmaCare budget has grown from $654 million in 2001 to over $1.1 billion in 2011/12.
