What does the ODB pay for 90 capsules of generic ramipril 10 mg these days when you walk into a pharmacy with a driver’s licence that says you are over 65 and looking to live forever with your favourite blood pressure-lowering medication? $46.17. No more, no less.
This issue is not just about Ontario. The financial fallout is spreading across the country, as other provincial governments let Ontario do the heavy lifting and race to copy aspects of Bill 102. If the public sector is putting in place measures to reduce costs across the country, where does that leave the private sector? Last year in Alberta, the range of submitted ingredient prices for Lipitor 20 mg within private plans was $192.82 to $231.89. In Newfoundland, it was $203.11 to $236.81. This is not an Ontario-only issue. The situation is not about to improve with tendering coming online in Ontario (with British Columbia and Alberta keeping a very close eye on things).
You have to tip your cap to the Ontario government, the clear leaders in this game. You may not like it, but you have to respect it. They instantly decide they will reduce their drug-cost markup, and pharmacies have to fall in line or face the threat of less business. They decide they will only allow generics at 50% of the brand price (instead of at 60% or 70%), and pharmacies have no choice but to agree. Instantly, a two-tiered pricing system is created: preferential prices for Dalton and Co., higher prices for private plans.
They decide to start tendering generic drugs and pocket the rebates at levels they don’t need to disclose, and private plans sit by and watch with awe but little action. Finally, in the most recent act of this play, the knight rides in to save the day in Ontario by using these combined savings to add a pile of expensive new drugs as benefits on the formulary, including Lucentis for age-related macular degeneration. Not only does no other provincial plan cover Lucentis as a general benefit, it isn’t even an Exception Drug in any other region.
What a nice ace in your pocket when you are looking for votes some day.
Private plan sponsors need to understand that drug-pricing issues are going to be enormously important in managing plan costs moving forward and educate themselves as to how they can participate in the solution rather than be victimized by the problem. The solutions are there—they just need to be accessed. In the cases presented above, and in many other cases that relate to the most commonly dispensed drugs in Canada, the savings referred to are significant.
Mike Sullivan is President of Cubic Health Inc., a Toronto-based drug plan management company that works with clients to optimize plan design and quantify the impact of alternate plan structures, measure plan performance, complete detailed budget forecasting using client-specific data, and actively manage the drug benefit.
If you’d like to comment on this story, click here.
For more about our Online Expert Panel, click here.