Lupin 2023

Ontario takes aim at drug costs

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TORONTO — The government of Ontario is moving quickly to achieve further savings and greater efficiency in its drug plan.

According to the province’s health ministry, there are five main reasons why a second round of reform is needed: There is a growing demand for prescription drugs, which will result in increased government costs; spending on generics, already higher in Ontario than in other provinces, is expected to increase over the next five years; Ontario supports more pharmacies per capita than many developed countries; health officials see “unacceptable practices” within the existing system; and since other jurisdictions have taken substantive steps to reduce prices, it makes sense for Ontario to pursue the issue now.

The effects of reform would likely not be confined to Ontario’s publicly funded plan. The other provinces and private drug plans often look to Ontario as a model for action.

The timetable for reform announced last month by Ron Sapsford, deputy minister of health and long-term care, would see legislation introduced this fall.

The particulars are being hashed out in a series of consultations with retail pharmacy, branded and generic pharmaceutical manufacturers, drug wholesalers, employers, and private insurers.

The Canadian Association of Chain Drug Stores, the Ontario Pharmacists’ Association, the Independent Pharmacists of Ontario and the Ontario Drug Stores Association are representing retail pharmacies in the talks that began at the end of last month.

Sapsford says the health ministry aims to deliver “world-class value for the money in the provincial drug system.”

Among the topics the government is discussing with the retail groups are the drug distribution supply chain, professional allowances, the entire pharmacy reimbursement model (dispensing fees, markups, compounding fees, the pharmacy fee schedule, rural pharmacy service fees, the remote dispensing fee structure) and chronic disease management initiatives.

Other professional groups have their own agendas, covering such issues as competitive agreements, chronic disease management initiatives for branded manufacturers, generics pricing, competitive agreements and professional allowances for generics suppliers.


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