Heading into 2018, the Neighbourhood Pharmacy Association of Canada (Neighbourhood Pharmacies) has become the acknowledged leader and advocate for our members across Canada.

Our newly strengthened management team has a mandate focused on helping to shape health policy in the provinces and federally, providing new growth opportunities for members and mitigating the negative impact from pricing and reimbursement-related issues.

The association is tackling emerging issues to ensure that pharmacy is best positioned for future growth. There will be six critical areas in play across Canada through 2018: pricing, expanded scope, the regulatory landscape, medicinal cannabis, addressing the opioid crisis and the introduction of value-based initiatives in the pharmacy sector.

Justin Bates,
Neighborhood Pharmacy Association of Canada

In addition, within the policy and regulatory landscape is an increasing desire to close the care and uninsured gap through pharmacare-related mechanisms. Canadian pharmacies are facing real disruptions to their business models, especially as the competitive and technological dynamics of their operating environment are also considered. Despite these headwinds, opportunities to capitalize on these challenges and innovations persist.

Pricing

Publicly funded provincial drug plans are maintaining their policies designed to lower generic prices, by reducing the prices they pay, to unprecedented levels. The approach to constrain is stronger than ever in public drug plans through restrained expenditure levels, typically accounting for approximately 40% of our members’ revenue, implemented by individual provinces and through joint initiatives.

Generic price compression is now a constant under the pan-Canadian Pharmaceutical Alliance (pCPA). In 2010, the pCPA was formed under the Council of the Federation — i.e., Canada’s provinces and territories to negotiate prices for publicly covered drugs. The pCPA evaluates all drugs recommended for funding under the Common Drug Review and pan-Canadian Oncology Drug Review processes and then decides whether joint pan-Canadian negotiations for the drug should occur.

As of March 31, 2017, the pCPA had generated savings of $1.28 billion annually for both brand and generic drugs across all provinces and territories.

Effective March 31, 2018, a one-year bridging period for the pCPA Generics Initiative will end. It resulted in the prices of six high-expenditure and high-volume drugs being reduced to 15% of the brand reference price from their previous 18%. Following an evaluation, it is widely anticipated that additional molecules will then be reduced to 15% of the brand price, and further reductions to 10% for some drugs are not inconceivable under possible revisions to a tiered pricing framework.

In short, the prices of many of the most commonly prescribed generic medications will soon be lowered to levels that are essentially the same as those that would be achieved under tendering processes.

And then there’s Quebec. In early July 2017, it appeared as though the Quebec minister of Health and Social Services was going to move to a tendering process for generics under the authority of Bill 81. However, on July 16, the government of Quebec and the Canadian Generic Pharmaceutical Association reached a five-year agreement in principle, under which the government has agreed not to tender, but will instead capture an estimated $1.5 billion through further price discounts and the launch of new generic medications.

Whether this agreement will remain exclusive to Quebec or eventually spread to other provinces under the pCPA remains unclear, but other provincial payers are unlikely to just sit back and watch. Quebec has also scaled professional allowances back to 15%.

In addition, the current Bill 148 stipulates that pharmacies cannot purchase more than 50% of their multisource products from any one manufacturer and, adding to the administrative burden, pharmacies will report their yearly purchases and penalties will be applied for ­noncompliance.

These relentless pursuits of price compression and related policies underscore the need to rethink and innovate the current pharmacy reimbursement model to ensure a sustainable system for patients, pharmacy and payers. Modernizing the current model remains a strategic priority of Neighbourhood Pharmacies, and that work will advance further in 2018, along with a new national reinvestment strategy that will urge governments to reinvest some of these savings into frontline health care services in highly accessible pharmacies to better serve patients when and where they need care in their communities.

Moreover, we believe that pharmacy must have a seat at the pCPA table, as an integral partner in the delivery of community-based care, so that unintended and negative impacts of policies can be averted when shortsighted decisions are made on pharmaceutical pricing. Work is also under way on research projects that will capture the holistic value and economic contributions of pharmacy to provincial economic growth.

Adding further downward pressure to our members’ business models is the federal Patented Medicine Prices Review Board (PMPRB) announced plans in May 2017 to amend the Patented Medicine Regulations. The PMPRB is an independent quasi-judicial body established by Parliament in 1987 under the Patent Act, and the federal Minister of Health is responsible for the pharmaceutical provisions of the Act. The PMPRB’s core mandate is to ensure that the prices of patented medicines sold in Canada are not excessive.

There are three proposed elements of regulatory changes:

• Additional application of pharmacoeconomic evaluations to determine if a brand price is ­acceptable.

• Amending the list of comparator countries used by the PMPRB by removing U.S. and Swiss prices and adding in several new countries including Australia, Belgium and Spain.

• Providing information previously considered commercially sensitive related to all types of third party rebates.

Industry observers argue that, taken together, these reforms will significantly lower price thresholds and may compel some manufacturers to simply bypass Canada when new products are launched, effectively stifling innovation and further limiting access to therapies for patients and providers.

Expanded scope

Across the country, while the provinces continue to constrain public drug plan investments, the momentum to increase scopes of practice to deliver additional professional health care services has stalled and the willingness by governments to compensate pharmacies for a wider range of services that would improve health outcomes and accessibility has been hampered. Elements of expanded scope of practice for pharmacy have been tepidly implemented provincially over the past several years.

However, apart from seasonal influenza vaccinations, there is no meaningful interjurisdictional effort to enhance the roster of services pharmacists are authorized to perform, and provinces have varying policy and funding frameworks for those services.

Despite these headwinds, research activities are under way in several provinces, such as Alberta, Ontario and Nova Scotia, that are designed to produce evidence of the value of pharmacy services, including improved health and economic outcomes.

In April 2017, a landmark report from the Conference Board of Canada estimated that the Canada-wide implementation of specific pharmacy services (smoking cessation, pneumococcal vaccination, and advanced medication reviews and management of cardiovascular disease could yield cost savings of $25.7 billion over the next 20 years.

The economic research outlining the value of pharmacy, along with Neighborhood Pharmacies’ strong advocacy efforts to refine current reimbursement models and ensure expansion of the range of services accessibly available to patients in the community, are essential for the future sustainability of the ­sector.

Regulatory landscape

Canadian pharmacies also face myriad legal and regulatory requirements across the provinces and territories on such issues as pharmacy security requirements, loyalty programs and patient safety, including adverse drug event reporting.

The provinces of British Columbia, Nova Scotia, New Brunswick and Ontario have made error and “near-miss” reporting mandatory. Patient loyalty programs are another issue that some regulators feel compelled to take on, and recent judicial decisions in Alberta and British Columbia have supported their position that loyalty programs are somehow detrimental to patient care while negating the benefits of competition and choice.

The federal Competition Bureau has stated that Canada’s self-regulated health professions should steer clear of any initiatives that suppress legitimate competition, apart from fraudulent or misleading advertising. Neighbourhood Pharmacies is concerned that some regulators have strayed from their mandate to protect the public interest and are acting as activists and advocates on behalf of the profession, which encroaches on the advocacy mandates of the provincial pharmacy ­associations.

Medical cannabis

Neighbourhood Pharmacies continues to take a preeminent leadership role on this contemporary health policy issue. Neighbourhood Pharmacies believes that pharmacy is best positioned — given the integrity of the supply chain, expertise in medication management, and existing infrastructure already in place — to make medical cannabis available to Canadians who stand to benefit from medical cannabis therapy.

Given the emerging and continuously evolving nature of clinical evidence and clear health outcomes for various disease states, there are undue risks and potential harms for persons now receiving medical cannabis without the drug-to-drug interaction advice and benefits of the expertise of a pharmacist that come with prescriptions for all other prescribed therapies.

Many patients who are now receiving medical cannabis and those who will be using recreational cannabis when it becomes legalized in July 2018 will likely also be receiving medications for other conditions. Neighbourhood Pharmacies has urged policy makers at all levels to consider the potentially serious health risks if pharmacy is not involved in access.

In 2016, Neighbourhood Pharmacies made a recommendation to the Task Force on Cannabis Legislation and Regulation that the recently adopted Access to Cannabis for Medical Purposes Regulations (ACMPR) be immediately amended so that pharmacists and pharmacies can be authorized to distribute and dispense medical cannabis.

Through 2017, several provinces established consultation processes seeking public input on the many issues related to recreational cannabis. Neighbourhood Pharmacies has made submissions to every province and territory that has consulted to date. Several provinces — e.g., Ontario, Quebec and New Brunswick — have already determined the model to be used for the sale of recreational cannabis. Although there is currently an overemphasis publicly on recreational cannabis, it is vital that governments not lose sight of the need for an assured and reliable supply of cannabis for medicinal ­purposes.

Neighbourhood Pharmacies has consistently stressed the importance of a dual system utilizing two frameworks for access, a medicinal one where there is evidence of therapeutic benefit, and a recreational one, in which access would be strictly controlled and restricted. Neighbourhood Pharmacies is also calling for prescription-based access for medical cannabis, with formulations and strengths determined by clinical treatment requirements, and the application of federal regulations to determine minimum national standards for age restrictions, packaging, distribution and sale locations, health warnings, promotion and marketing.

Opioid crisis

With the growing opioid crisis gripping communities across Canada, pharmacists can contribute additional clinical oversight and safeguards to prevent opioid dependency.

The data paints a compelling case for the increased role of pharmacists to help patients better manage pain: 15% to 19% of adult Canadians live with chronic non-cancer pain, and opioids are commonly prescribed to manage this type of pain. The opioid related death toll for 2017 is expected to surpass 3,000. The 2017 Guidelines makes 10 key recommendations focused on risk reduction and harm prevention, including:

• Strongly recommending using and optimizing nonopioid and nonpharmacological pain management therapies before using opioids.

• Working with pain patients who have or are at risk of substance abuse to address substance abuse before/during pain management with opioids.

• Restricting starting dose on opioids.

• Taking a multidisciplinary approach to tapering opioids.

Neighbourhood Pharmacies is advancing a pain management service designed to be mandatory for all acute opioid prescriptions and a voluntary program to help patients with chronic pain. The service includes an in-depth one-on-one consultation with the goal of creating an individual treatment plan with patients.

The program has three primary objectives:

• Prevent opioid dependence by targeting patients upon the initiation of an opioid prescription drug.

– Through de-prescribing/assessment of appropriateness of opioid therapy, and evaluation of alternative therapies (pharmacological, nonpharmacological, cannabis).

– Through better education during early phase of opioid use to ensure appropriate use and discontinuation.

• Education in opioid-related incidents through better ongoing patient education on appropriate use, storage and disposal of opioids, as well as how to manage cases of accidental overdose or ingestion of opioids by individuals other than those for whom they were prescribed (through the Naloxone Program — now available in every ­province).

• Harm Reduction by ongoing education of alternative options and risk-reduction strategies such as Methadone, Suboxone.

The core services to be provided by pharmacists are:

• Baseline pain and medication assessment of the patient and goals of therapy.

• Critical review of the appropriateness of the opioid ­prescription.

• Core counselling on the prescription, including alternative/supplemental therapies.

• Education on proper prescription storage/disposal.

• Scheduling follow-up dialogues between pharmacist and patient.

The program is intended to be a standard approach for pain management across Canada, with Ontario being the lead province to implement.

Value-based initiatives

Late in 2017, Green Shield Canada (GSC) introduced its Value-Based Pharmacy (VBP) program. Under the program, the insurer will begin issuing monthly scorecards for pharmacies across Canada, except in Quebec.

GSC is the first private insurer payer to introduce a pay-for-performance model in Canada.

Neighbourhood Pharmacies recognizes the need to thoroughly evaluate the potential impact, benefits and unintended consequences of this program and learn from the launch of similar models in the U.S.

For example, it remains unclear if U.S.-based metrics on which American health plans are evaluated are relevant in the Canadian environment.

The U.S. model is designed to evaluate multiple aspects of patient care, including physicians, and Neighbourhood Pharmacies and its partner organizations will monitor the VBP program to determine its applicability if and when pharmacy is ­evaluated.

Towards ­pharmacare?

A national universal pharmacare program has been the subject of simmering debate for decades in Canada. Its proponents argue that Canada is the only industrialized country with universal health care (Medicare) that does not include coverage of prescription drugs.

In 2016, the House of Commons Standing Committee on Health requested a cost estimate for implementing a national universal pharmacare program. Those estimates were contained in a major report that was released in September 2017 from the Office of the Parliamentary Budget Officer. The report assumed that of the current $28.5 billion spent on pharmaceuticals, $24.6 billion would be eligible for a national pharmacare scheme.

The report projected that although savings would amount to $4.2 billion, a national pharmacare scheme would still require more than $19 billion in new federal spending. On October 20, after a meeting of provincial health ministers, it was announced that the federal government supported the exploration of payer feasibility of a national universal pharmacare program.

Meanwhile, Ontario, the largest single public drug plan payer in North America, is continuing its efforts to enhance the Ontario Public Drug Programs. In September, the government announced it would introduce a new OHIP+ Children and Youth Pharmacare program, effective January 1, 2018. This new program will make the province the first payer for more than 4,400 drugs covered by the Ontario Drug Benefit program.

In a statement, the government described the new program as “the first step in achieving the goal of universal pharmacare for all.” Although the conventional wisdom has always been that there is little appetite for a national pharmacare program, the governing Liberals will be seeking reelection in the late spring of 2018 and political expediency ­cannot be completely discounted in assessing the potential for a national pharmacare program.

Neighbourhood Pharmacies

Last year, to better meet the needs of our members and the public we serve in the current environment, Neighbourhood Pharmacies underwent a complete transformation of its mission and vision, and implemented a new governance and membership model.

The key to securing the ongoing sustainability of Canada’s pharmacy sector in 2018 and beyond will involve continuing to build on and enhancing the collaborative and positive relationships with national and provincial patient and pharmacy associations, governments, and private insurers and payers that Neighbourhood Pharmacies has successfully constructed over the past few years.

Justin Bates is chief executive officer of the Neighbourhood Pharmacy Association of Canada.