Abstract
The Ontario government has announced plans for a sweeping overhaul of the provincial drug system, covering everything from drug pricing and distribution channels to pharmacy services and compensation models.
The substantial review begun in July comes 3 years after the province brought in the Transparent Drug System for Patients Act (Bill 102), which had a number of objectives, including controlling burgeoning drug costs in the public plan.
Bill 102 reforms allowed the province to save $600 million in drug spending, the province says, noting that the savings have been reinvested in the system to improve patient access.
The province has launched a broad consultation process with drug manufacturers, distributors, pharmacist associations, pharmacy chains and other stakeholders. Consultations are scheduled to be wrapped up in September, with any changes requiring legislation to be implemented in 2010.
Professional allowances are on the table; the province is considering whether to reduce, limit or eliminate the allowances for the Ontario Drug Benefit (ODB) Program and possibly for private plans as well. The Ontario government recently took legal action against generic drug companies, wholesalers and pharmacists after audits revealed professional allowances were being collected multiple times on the same products. Also up for discussion are pharmacy services. The province is considering which services should be compensated, along with appropriate compensation levels and mechanisms.
— Russell Cohen, chair of CACDS, executive vice-president, industry and government affairs, Katz Group Limited
Rules with respect to distribution channels and pricing of both generic and brand-name drugs are also being examined.
The review presents a good opportunity for the profession, says Dennis Darby, CEO of the Ontario Pharmacists' Association (OPA). “This opens up the door for pharmacists to do more and be compensated for it. But it's important that the reform is sensitive to the business sustainability of pharmacies and ensures patient access to pharmacy services.”
Pharmacists are open to reducing or eliminating professional allowances from the generic drug companies, Mr. Darby says, but clearly money lost through such a change would have to be offset by income for pharmacists elsewhere in the system. “We would be the first to say that professional allowances do indeed subsidize the day-to-day operations of pharmacies but it's not a very accountable system. We would appreciate a system where governments directly fund pharmacists for services, and where we can measure what's being done and the health outcomes.”
The Canadian Association of Chain Drug Stores (CACDS) agrees with the OPA that the drug system review could lead to a better funding model for pharmacy, one that focuses on professional services. “The way we get compensated today is based on filling a prescription. That's an outdated funding model,” says Russell Cohen, chair of CACDS and executive vice-president of industry and government affairs for Katz Group Limited. “We are suggesting a pharmacy program that reflects the total range of services that pharmacy can provide, one that recognizes pharmacists as members of the health care team.”
The CACDS says the province has the opportunity to find new money to pay pharmacists because of the many brand name drugs coming off patent in the next few years. While the Ontario government is stressing that spending on generic drugs will increase 11% a year from 2009 to 2014, it's not highlighting the fact that spending on brand-name products will dramatically decrease, Mr. Cohen points out.
The association has analyzed industry data and says that Ontario will “reap an unprecedented windfall of savings” — a $2 billion reduction in drug spending in that 5-year period, as a large number of high-volume brand drugs come off patent. Savings across Canada will total $11 billion, projects CACDS.
Ontario has an historic opportunity to improve its pharmacy funding model, Mr. Cohen says. “If the government is going to save billions of dollars in spending on drugs, it has an opportunity through this drug reform not to cut funding to pharmacy but to reinvest those savings into pharmacy services, a component of health care that is working well.”
Both the OPA and CACDS stress that reforms to the system need to be carefully planned and include a reasonable transition period. Mr. Cohen says that many of the Bill 102 changes were brought in abruptly, and didn't give pharmacists adequate time to put the systems in place to quickly move into new funding areas, such as medication reviews.