Health Watch: Slashed Pharmacists’ Allowances

Ontario Premier Dalton McGuinty’s Drug System Reforms are not the cheerful, one-dimensional guarantees his government claims they are, according to worried, independent pharmacists; but McGuinty’s government is steadfast and assures not only have the right steps been taken to ensure pharmacies’ survival, the reforms will also benefit the health care system overall.

Generic drug prices will soon drop from 50 per cent – set in 2006 reforms – to 25 per cent of their brand name counterparts, possibly saving the government more than $500 million a year. But looking past this money-saving exterior, pharmacists wonder, at what true cost to them?

In order to cut generic drug prices in half, the government must eliminate what pharmacists consider their lifeline, so-called ‘professional allowances.’ This has pharmacists fuming over the loss of what was $750 million paid to them by generic drug manufacturers in 2009. Without this funding, pharmacists argue many will be forced to cut patient services, hours, employees or maybe even shut down – a looming prospect for the smaller stores which account for over 50 per cent of Ontario’s pharmacies.

For pharmacists, McGuinty’s stance was made clear through the subtext of his now infamous remarks at a May 19th 2010 press conference: “There are more pharmacies in Ontario than there are Tim Hortons in Canada. So, I’m not concerned about the number of pharmacies,” he said.

McGuinty alleges pharmacists are misusing their allowances, arguing 70 per cent of the money was used to boost revenues rather than increase patient care and also revealing hundreds of pharmacy owners either failed to, or incompletely accounted for allowance expenditures. And as pharmacists plead for public support, they fail to address the issues of transparency raised by the government.

“I will not go so far as to call [the professional allowances] kickbacks or rewards,” Minister of Health Deb Matthews said in a CBC report, “but I can tell you there are people who would do that.” Two days later, on April 9th 2010, she went on to tell CBC: “I am confident that the money we’re putting into the system to protect [smaller] rural pharmacies, to increase the dispensing fees, to pay pharmacists directly for services they provide to their customers will result in a better system, a fairer system.” But pharmacists have been making their own case for support. In April, the Independent Pharmacists of Ontario, Ontario Pharmacists’ Association and the Canadian Association of Chain Drug Stores wrote a letter addressed to Minister Matthews, highlighting their concerns. “Your proposed cut of these allowances deals a direct and severe blow to the ability of pharmacies to continue offering the high levels of service our patients have come to rely on,” they wrote. In place of the $750 million lost, the government has budgeted to grant pharmacies $150 million in new funding, and pharmacists argue the amount is inefficient; they are pleading for at least $260 million to fill the gap. But by also increasing the dispensing fees it pays to pharmacists by one dollar in urban areas and four dollars in rural areas, McGuinty’s government is confident pharmacies will be able to sustain the lost revenue.

The reforms, set for May 15th 2010, were delayed without a future timeline and this sparked speculation that lobbyists advocating increases in government funding may have had some success; McGuinty’s government says it’s committed to the funds already allocated.

As Matthews pointed out to Sunny Freeman of the Canadian Press, “[In 2006 reforms] we heard the very same thing[;] we heard that drug stores were going to close [and] we heard that services would be cut,” she said,  “[but] they haven’t closed. They’ve opened 140 more.” On top of 140 new pharmacies opened since the 2006, the government says the money saved helped fund access to 150 new prescription drugs – proof that not only can pharmacists withstand reformations, but they’re also beneficial.

Now McGuinty is again promising every penny saved will be invested into improving the health care system, and as the battle continues, the course is irrevocable; allowances will be cut and generic drug prices dropped, again. After which, the only remaining question for pharmacists and the public alike, is what the government will do with its saved money.
www.stopcuts.ca, www.health.gov.on.ca