Prices for generic drugs are getting squeezed again in Canada — this time in Alberta.


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More pressure on generics pricing in Canada

March 12th, 2013

EDMONTON, Alberta – Prices for generic drugs are getting squeezed again in Canada — this time in Alberta.

As part of its 2013 budget announced last week, the Alberta government plans to slash generic drug prices from 35% to 18% of brand-name drug prices effective May 1.

The move was blasted by pharmacy industry groups, which noted that the proposal came without prior consultation and continues already dramatic cuts to generic drug reimbursement.

According to the Alberta Pharmacists Association (RxA), the provincial government over the past two years has decreased generic drug payments from 75% to the current 35% of branded drug prices.

"Pharmacy has been more than willing to help government achieve their financial goals. However, I am gravely concerned with the government process that has recently taken place" RxA president Byron Bergh said in a statement. "Pharmacists perform an important role by ensuring that Albertans have access to high-quality medications and pharmacy services that support them in achieving their health goals. The government does not seem to be aware of the drastic effects it may have on the level of care pharmacists are able to provide to Albertans."

Unlike last week's announcement, reductions to generics pricing historically have been made in a controlled fashion, enabling pharmacies to make the necessary adjustments to their practice, RxA pointed out. Traditionally, revenue earned by pharmacies from generics has offset the "chronic underfunding of pharmacy services by government," the association stated, adding that this is significant because pharmacy fees have been unchanged since 2005 and have only increased 52 cents since 1991.

epresentatives from the Alberta Pharmacists' Association (RxA) and community pharmacists were shocked when such a dramatic decrease was announced without consultation of the profession.

"The cuts are so deep and so fast, it will be impossible for me to react quickly enough to ensure the sustainability of my pharmacy," commented Patrick Rurka, a pharmacist from Rimby, Alberta. "My patients and community will be the real losers, as the health services my pharmacy offers will be compromised. The patients' needs will either be off-loaded to physicians or will be left untreated."

On Monday, the Canadian Generic Pharmaceutical Association (CGPA) called the planned price cuts unacceptable.

"These across-the-board cuts represent a betrayal of our industry and were announced without consultation, or prior notice to, generic pharmaceutical manufacturers, community pharmacy or other key stakeholders in the pharmaceutical supply chain," stated CGPA president Jim Keon. "The Alberta government must open collaborative discussions with stakeholders immediately to ensure any changes are made in the best interest of patients."

CGPA reported that in 2012 generics accounted for 64% of all prescriptions in Alberta but only 30% of all prescription drug spending. Overall in Canada, generics represent less than 3% of health care spending."

"The slashing of generic prices further jeopardizes the supply of cost-saving medicines for Albertans. In the face of these dramatic cuts to reimbursed prices, our industry plans to contact Health Canada to inform them of generic pharmaceutical products that may no longer be viable," Keon added. "Along with threatening the current drug supply, these dramatic cuts to generic drug prices in Canada will result in fewer cost-saving generic drugs coming to market resulting in hundreds of millions of dollars in lost savings to the health care system. As a result, the Alberta government and other payers will end up paying the full cost of the higher-priced, brand-name equivalents."

In January, Canada's Council of Federation announced that provinces and territories, except Quebec, have agreed to set pricing for six common generic medications at 18% of the equivalent brand-name drugs. Individual provinces and territories currently pay 25% to 40% of the branded prices. Plans call for the new prices to go into effect by April 1.

The six generics are atorvastatin (for treating high cholesterol), ramipril (for blood pressure and other cardiovascular conditions), venlafaxine (for depression and other mental health conditions), amlodipine (for high blood pressure and angina), and the acid reducer/anti-ulcer drugs omeprazole and rabeprazole.

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