people before profits: stand up for public health care: ontario vs the pharmacies

When Shoppers Drug Mart, Pharma Plus, Rexall and the other big drugstore chains threatened to lay off staff, charge for delivery and reduce hours to compensate for proposed lower generic drug prices, it wasn't difficult to see through their blatantly transparent ploy. In the last three years, SDM's profits have increased by more than $250 million, from $300 million to $585 million. We don't need to further subsidize their profits with our health care needs.

Now we see that SDM, Rexall and Pharma Plus are already cutting services - before the Ontario reform plan has even been adopted! Charging $8.00 for delivery is an outrageous ploy that disproportionately affects seniors and low-income people, who rely on public transit (shoddy in non-urban areas) or can't easily get around.

Corporations protect their own profits; their only interest is their shareholders. But our publicly-financed health care system has to protect our interests. We must refuse and resist the pharmacies' tricks and lies, and call them out on every turn. We must insist that Ontario stand strong in the proposed changes to the drug system.

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When Allan and I moved to Ontario, we were shocked that pharmacies here charge a "dispensing fee" for their services. Dispensing is what pharmacies do. Don't we pay for their services through the costs of our drugs? How can they charge an extra fee for counting out pills and putting them in little bottles?

Now I understand that the cost of drugs is more strictly regulated in Ontario than it is in the US - as it should be. So because of the regulated markup, pharmacies are allowed to charge a fee (also regulated) for their services. But pharmacies can charge a "usual and customary fee" - currently set at a maximum of $7.00 - or they can jack up the prices. As you can see on this chart, the biggest drugstore chains in Ontario all charge the highest dispensing fees, with SDM and Pharma Plus taking $12.00 per prescription, and Guardian Drugs coming in at a whopping 13.50. (Guardian is owned by the Katz Group, which also owns PharmaPlus, Rexall and IDA.)

When we lived in Port Credit, we found an independent pharmacy called Hooper's Pharmacy, which has four locations in the GTA. They were very convenient, knowledgeable and helpful, and they happen to be a distributor for Metagenics supplements. I use several Metagenics supplements for my fibromyalgia, and the products are only available through practitioners and certain pharmacies (not over-the-counter but not by prescription). One of my concerns about moving to Canada had been the availability of their products, so I was happy and relieved to find a source so close to home. Hooper's charges a maximum dispensing fee of $9.00, but if you have prescription insurance coverage, they will accept whatever amount the insurance covers as the full fee.

Now that we no longer live in Port Credit, there's a SDM very nearby - much closer than Hooper's - but we won't use them for prescription drugs. $12.00 per prescription is just insane. We do shop at SDM for non-drug items, and collect their "Optimum" points. However, starting today, we will buy our non-drug products elsewhere and give up SDM altogether - until and unless the company stops obstructing drug system reform.

The London (Ontario) and District Labour Council is urging its 30,000 members to boycott SDM and Rexall pharmacies in the London area. I fully support them and will do the same in my own area.
"What a spectacle -- watching Shoppers and Rexall team up with huge generic drug companies to block the public's access to life-saving medicines," said Patti Dalton, president of the local labour council.

Shoppers Drug Mart announced shorter hours and delivery charges at its London stores earlier this week -- the home turf of Ontario Health Minister Deb Matthews.

OFL president Sid Ryan called the big chains' moves to charge for deliveries, shorten their hours and threaten layoffs "unconscionable."

"This is the height of corporate greed. A corporation like Shoppers Drug Mart that made $585 million in profits last year is using the most vulnerable people as pawns," Ryan said.

More from Sid Ryan in a bit.

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The proposed changes, from the Ontario Ministry of Health and Long-Term Care's website:
What reforms are the government proposing to the province's drug system?

The Ontario government plans to further reform the prescription drug system to provide better access to lower-cost generic drugs for patients, while continuing to increase annual funding to the drug system as a whole.

These proposed changes include:

* Lowering the cost of generic drugs by at least 50%, to 25% of the cost of the original brand name drug for Ontario’s public drug system, private employer drug plans, and people who pay for drugs out-of-pocket

* Eliminating the system of ‘professional allowances’ - payments generic drug companies make to pharmacy owners to fund patient services and are being used by many pharmacies to fund employee benefits, bonuses, overhead costs and boost profits

* Ensuring pharmacists are fairly compensated for helping patients by increasing dispensing fees and paying for additional services provided to patients

* Supporting access to pharmacy services in rural communities and under-serviced areas with new dedicated funding

Why is the government making these changes?

To get lower prices for generic prescription drugs. The cost of generic drugs in Ontario is a lot higher than in most other countries around the world.

The main reason Ontario pays so much more for our generic drugs than other countries is professional allowances. Professional allowances are payments generic drug companies make to pharmacy owners intended to fund patient services

In 2009, generic drug manufacturers reported paying pharmacy owners more than $750 million in professional allowances. However, we know that:

* Pharmacy reports indicate that approximately 70 per cent of professional allowances have actually gone toward salaries, fringe benefits and bonuses instead of direct patient services.

* In 2009, 750 individual pharmacies either failed to disclose any documentation whatsoever related to these payments or filed incomplete documentation

* Audits have found that some pharmacies and wholesalers have been involved in a ‘re-sale’ scheme that triggers the payment of professional allowances multiple times for the same product.

Eliminating professional allowances would increase the accountability of Ontario’s drug system, enable the government to more effectively compensate pharmacists for the care they provide to prescription drug users and help reduce the cost of generic drugs.

Also from the Ministry's website, myths and facts about pharmacy reform:

If Professional Allowances were reduced or eliminated, there would be serious impacts on patient care and some pharmacies may even have to close.


Professional Allowances have directly helped to inflate the cost of generic drugs. These inflated costs are borne by patients, employers and taxpayers and it cannot continue.

The reform package that is being brought forward would directly pay pharmacists for providing a wider range of health care services.

Professional allowances are monies generic drug companies pay pharmacies for stocking their prescription drug products. These payments are estimated to be over $750 million in 2009.

Under the Ontario Drug Benefit Act and the Drug Interchangeability and Dispensing Fee Act, drug manufacturers are required to report to the government the amount of professional allowances paid out to pharmacies. A payment of more than 20% on the ODB side is considered a "rebate" as well as any payment that is not for direct patient care. Rebates are not allowed under the Ontario Drug Benefit Act and the Drug Interchangeability and Dispensing Fee Act.

Since 2006:

* Pharmacies have reported that 70 per cent of professional allowances have actually gone toward fringe benefits, bonuses, profits and overhead costs instead of patient services as was the intent.

* As many as 100 individual pharmacies have failed to disclose any documentation whatsoever related to professional allowances collected, in the most recent reporting period.

* Audits have found that some pharmacies and wholesalers have been involved in a 're-sale' scheme intended to trigger the payment of professional allowances multiple times for the same product.


People in Rural communities won't be able to get prescriptions filled.


Once the reforms are in effect, dispensing fees paid by the Ontario government would increase by up to $4 for every Ontario Drug Benefit prescription filled in rural or underserviced areas of the province. The government is doing this because it knows how important it is to ensure that the people who live in these regions have a full-service pharmacy, close to home.


PAs do not increase the health costs for taxpayers.


This is simply not true. Professional allowances increase health costs for taxpayers by inflating the cost of generic drugs. Professional allowances are monies generic manufacturers pay pharmacies for stocking their prescription drug products.

Generic drug prices are significantly higher in Canada than in most other developed countries. One reason that prices are high is the amount of professional allowances paid.

These higher drug prices are borne by patients, employers and taxpayers.


Ontario pays the same as other jurisdictions for drugs.


Example: 4 generic drugs in 5 other countries; other jurisdictions pay 31% to 82% less than Ontario. (See chart here.)


Pharmacies provide a wide range of services that the government does not pay for.


The government recognizes the valued work that pharmacies and pharmacists provide to their communities and patients across the province. This commitment was demonstrated in 2006, with the passage of The Transparent System for Patients Act. Among other things, the government has created the MedsCheck program to compensate pharmacists for the advice and guidance they provide patients. Since 2007, some 465,000 Ontarians have had a MedsCheck review with their pharmacist, and the government has dedicated $50 million a year in reimbursement to pharmacists for this program.

The reform package that is being brought forward would pay pharmacists for providing a wider range of health care services. A compensation model will be developed in consultation with stakeholders to pay pharmacists for providing these new services. Again, the government realized that pharmacists have skills and expertise that provide value to Ontarians and it is acting to continue paying for specific services provided to patients. These proposed reforms will boost direct financial support for the valued services pharmacists offer to patients.


Pharmacies lose money every time they dispense prescription drugs (both brands and generics) to patients in Ontario.


In fact, pharmacies were paid more than $950 million for dispensing brand and generic prescription drugs under the province’s drug program. (Approximately $695 million in dispensing fees and $264 in mark-up)

The proposed reforms include an increase in the dispensing fee paid by the Ontario government to pharmacies.


These government actions will result in cuts to services to seniors, chronic care patients and families.


This is not true. The proposed drug reforms would result in increased access to lower-priced generic drugs and reimburse many services provided by pharmacists. In addition, the government plans to protect access to pharmacy services in rural and underserviced areas.


The reforms introduced in 2006 – including a cap of 20% on professional allowances in Ontario's Drug Benefit Program, have had a negative impact on pharmacy revenues.


This is not true. Stores owned by publicly identified members of the Independent Pharmacists of Ontario have all received an increase in total dollars received per month from the ministry since the implementation of Bill 102 in 2006. (From the Ontario government in dispensing and mark-up fees.)

The government spends about $4 billion on providing drug benefits to Ontarians. Of this, more than $950 million is spent on dispensing fees and drug cost mark-ups that are paid directly to pharmacies.

There are more than 140 new pharmacies in Ontario since Bill 102 became effective in October 2006. As of February 2010, there are some 3,306 pharmacies in Ontario.


The government is planning to reduce the number of drugs currently covered under Ontario's Public Drug Programs.


There are no plans to discontinue any classes of drugs that are currently on the formulary (the list of drugs covered under Ontario's Drug Programs).

In fact, Ministry intends to continue investing savings generated into new innovative drugs.

The Ontario Federation of Labour is calling on SDM to stop obstructing pricing reform (Facebook group here).
Tell Shoppers Drug Mart to stop trying to make us all pay more for less and stop using us as pawns!

The Ontario Federation of Labour today issued an Open Letter to Shoppers Drug Mart blasting its lead role in undermining a government initiative to lower the cost of generic drugs by 50 per cent for the people of Ontario; threatening its workforce, and using patients and customers as pawns in its battle with the Health and Long Term Care Ministry.

OFL President Sid Ryan has called on unionized workers in London, Ontario, the site of the current Shoppers Drug Mart protest, to take their business elsewhere. The OFL is also is urging the general public in that city to vote with their feet. Shoppers has imposed charges for delivery -- a move that targets the most vulnerable people in the community and has cut back hours in it stores.

"In its determined effort to sink a government reform that would see generic drug prices cut by 50 per cent, Shoppers Drug Mart is fast becoming one of Ontario’s worst corporate citizens," says OFL President Sid Ryan.

"We remind Shoppers that it enjoys the PRIVILEGE of, not the right to, consumer loyalty. We urge this corporation to align itself with the public interest, rather the interests of the generic drug companies."

Shoppers Drug Mart's profits have increased from $300 million to $585 million over the last three years, yet they are cutting hours of their employees and threatening to lower services and charge more for them.

The media release headline urges Ontario to "follow the Irish example and contemplate publicly run pharmacies". A brilliant idea whose time has surely come.

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