Thursday July 7, 2010
Falcon forms partnership with CGPA
Dispensing fees going up
he government is raising dispensing fees by teaming up with pharmaceutical companies and over the next three-years $35-million will be reinvesting into new clinical pharmacy services which Falcon says will further stabilize the pharmacy industry and ensure patients continue to get the best service and prices they can.
Health Services Minister Kevin Falcon announced today in a press relase that his ministry has formed a new partnership with the B.C. Pharmacy Association and the Canadian Association of Chain Drug Stores (CACDS) in order to reduce costs.
“We are lowering generic drug prices and making improvements to our drug system to benefit all British Columbians,” said Health Services Minister Kevin Falcon. “Quite simply, we were paying too much for some of the most popular drugs for high blood pressure, heartburn, depression, epilepsy and cholesterol. Change was needed if we want to keep drug costs sustainable and redirect the money to cover new drugs and provide better services.”
According to the ministry generic drug prices in B.C. average 65-per-cent of the brand-name cost. The agreement will be phased in over three years and PharmaCare will be paying less to pharmacies for generic drugs to 35 per cent.
For example, by April 2012, the agreement will result in an estimated $7 million in annual savings to PharmaCare for costs related to the sale of the generic brand of Lipitor, the top-selling drug in the world used to treat high cholesterol. It is also expected to result in an estimated $9 million in annual savings for employer/union drug plans and individuals paying out-of-pocket.
The reduced generic prices will only apply to products covered by PharmaCare. However, these savings will apply to all British Columbians regardless if they are covered by PharmaCare, an employer/union-paid drug plan, or paying for drugs out-of-pocket.
In addition to the estimated up to $170 million a year in savings for the health system, it is estimated that employer/union-sponsored drug plans and individuals can expect annualized savings of up to $210 million. This represents estimated savings of up to $380 million a year in total.
“We are pleased to have negotiated an agreement between the pharmacy profession and the B.C. government that provides fair and reasonable remuneration for pharmacy services,” said Marnie Mitchell, CEO for the B.C. Pharmacy Association. “B.C. has taken a collaborative approach to ensure that transition is manageable for industry and does not undermine the sustainability of community pharmacies. We look forward to working with government on clinical services across the province, to continue to make better use of pharmacists’ skills as medication experts within the health-care system.”
Effective July 28, the maximum dispensing fee reimbursed by PharmaCare to pharmacies will increase by 50 cents to $9.10. Fees will go up an additional 50 cents on Oct. 15, 2010 to $9.60, on July 4, 2011 to $10 and on April 2, 2012 to $10.50. These increases recognize the impact of reduced generic drug prices on pharmacy revenues and will preserve the ongoing viability of the community pharmacy sector in B.C.
“The B.C. government has shown real leadership and collaboration on a challenging issue,” said Nadine Saby, president and CEO of CACDS. “The solutions arrived at and the co-operative nature of our discussions show that this Province understands the growing importance and opportunities available through community pharmacy care, and that the government wanted to build a system that would better serve British Columbians over the long term.”
By year three of the agreement, $35 million will be reinvested into new clinical pharmacy services. These services will be defined over the course of the deal and include more complex services like medication management by pharmacists.
“The status quo was not acceptable – this agreement is a balanced approach that protects consumers and ensures the continued viability of rural pharmacies,” added Falcon. “We recognize the important services these pharmacies provide to their communities and we will be working on a program to further ensure their interests are protected.”
The agreement ensures that patients will continue to have access to the wide array of pharmacy services they depend on, and pharmacies will have stable funding while transitioning over the next three years.
Over the past six months, the ministry has received more than 30 letters of support for lower generic drug prices to be applied to employer-sponsored drug plans from a range of public and private sector stakeholders. Stakeholders who wrote in included school districts, Public Education Benefits Trust, United Way Lower Mainland, Teamsters Union Local No. 155, Municipal Pension Retiree’s Association and Pacific Blue Cross.
“We are very pleased with the government's announcement that they are reducing prices for generic drugs across the board and moving towards equitable and consistent pricing for all British Columbians,” said Kenneth G. Martin, president and CEO of Pacific Blue Cross.
The Province spends over $900 million a year through Pharmacare with generic drugs accounting for an ever-increasing proportion of that amount, totaling $286 million in 2008-09.
This agreement meets recommendations made by the Pharmaceutical Task Force on pharmacy compensation and reducing the cost of generic drugs in B.C.
A PowerPoint providing background on PharmaCare and generic drug pricing is available here.
Jim Keon, President of the Canadian Generic Pharmaceutical Association sent out his own press release which said that "The government recognizes that prices paid for generic pharmaceutical products have included significant support for the services BC's community pharmacies provide to their patients. That is why it is important that today's announcement includes increased direct support for pharmacy services.
We also support the government's steps to ensure the new pricing regime for generic drugs applies equally to all BC residents, whether they are covered by public or employee sponsored drug benefit plans, or pay directly for their prescription medicines. While generic drugs are dispensed to fill fully 68 percent of prescriptions for PharmaCare, they are used to fill only 51 percent of prescriptions in the private sector market in BC. Now that prices are being reduced, private payers in BC must examine their drug benefit plans to determine why their use of generics is so low and what steps can be taken to increase generic drug use and the related savings.
Despite the agreement with the government, Keon says there is still work to be done.
"There are a number of important issues that must still be resolved, including: faster provincial approval of lower-cost generic drugs, flexibility in the new pricing rules so that generic drugs that are costly to develop and produce remain available, and an incentive period to ensure that generic drug makers can continue to undertake the significant costs and risks to challenge invalid or non-infringed patents in order to bring new cost-saving generic drugs to market as quickly as possible."
The Canadian Generic Pharmaceutical Association (CGPA) represents Canada's generic pharmaceutical industry. The industry plays an important role in controlling health-care costs. Generic drugs are dispensed to fill 55 per cent of all prescriptions in Canada but account for only 24 per cent of the $22-billion Canadians spend annually on prescription medicines.
For more information on the generic drug industry visit: www.canadiangenerics.ca
TORONTO, July 9 - The Canadian life and health insurance industry welcomes the announcement by the B.C. government that it will be reducing the cost of generic drugs for British Columbians, and that the price structure will be the same for all B.C. residents whether they are covered by the government plan, a private insurance plan or paying out of their own pockets. "Lower generic drug prices across the full spectrum will mean that B.C. employers and unions will be able to continue to afford to provide health benefits to their workers and their families," says Frank Swedlove, President of the Canadian Life and Health Insurance Association. "This also represents significant progress in dealing with the high cost of generic drugs in Canada," he added.
The Canadian life and health insurance industry is responsible for the majority of Canada's private drug insurance plans, covering over 2.7 million British Columbian workers and paying out some $2.2 billion for medical, hospital, dental and drug benefits in 2008. These plans are predominantly group plans purchased on a voluntary basis by employers, unions, professional organizations or other affinity groups and are designed to complement the public health system. They provide financial resources for health services that are not covered, or not fully covered, by public health care and therefore play an important role in reducing financial pressures on the public system. Prescription drugs represent 60 to 80 per cent of the costs of supplementary benefit plans.
The Canadian life and health insurance industry provides a wide range of financial security products including life insurance, annuities (including RRSPs, RRIFs and pensions) and supplementary health insurance to about 26 million Canadians and their dependants. Established in 1894, the CLHIA is a voluntary association whose member companies account for 99 per cent of Canada's life and health insurance business.
OTTAWA, July 9 - The Canadian Pharmacists Association (CPhA) today welcomed the announcement of an agreement reached between the Government of British Columbia, the British Columbia Pharmacy Association, and the Canadian Association of Chain Drug Stores to lower generic drug prices and invest in expanded pharmacy services. The agreement will see generic drug prices lowered to 35% of their brand name equivalent, while at the same time increasing the maximum dispensing fee over a three year period, and by year three of the agreement, reinvesting $35 million into expanded pharmacist services like medication management. These changes will result in a higher level of care for patients and a more sustainable health system for B.C.
CPhA is particularly pleased that the government took a collaborative approach in negotiating these changes, working closely with the BC pharmacy profession to strike a balance between lower drug prices and enhanced pharmacist services. Furthermore, the phased in approach of a three year increase in the dispensing fee and ongoing negotiation over expanded clinical pharmacy services will provide pharmacists with the time and flexibility to adjust to these changes.
"Today's announcement in BC is a positive step forward in enhancing patient care and patient outcomes for British Columbians," stated Ruth Ackerman, President of CPhA. "With a recognition of the importance of medication management, and with funding provided to expand clinical pharmacy services, the agreement will improve the ability of BC patients to access needed medication therapy management from their community pharmacists to optimize patient outcomes from drug therapy."
"The changes announced today in British Columbia as a result of the successful collaboration between government and the pharmacy profession should serve as a model for other jurisdictions looking to reform drug pricing and professional service models," stated Jeff Poston, Executive Director of CPhA. "We congratulate the BC government for choosing a collaborative, patient-focussed approach rather than a legislated, unilateral approach."
The Canadian Pharmacists Association is the national organization of pharmacists, committed to providing leadership for the profession and improving the health of Canadians.
For further information: Jeff Morrison, Director of Government Relations and Public Affairs, Canadian Pharmacists Association, 613-523-7877, x386, email@example.com