October 24th 2009
Major changes to the Ontario drug benefit system — based in part on a secret, $750,000 sole-sourced consultant contract — that the government hopes will increase taxpayers’ “value for money” are coming soon.
But the Health Ministry insists the changes are targeting “very unacceptable practices” in the professional allowance system of payments between generic drug companies and pharmacies and not the seniors and welfare recipients who use the plan.
“In Canada, we are paying dramatically higher prices for generic drugs than most other countries,” said Helen Stevenson, assistant deputy minister and executive officer of Ontario Public Drug Programs.
She added that legislation passed two years ago that was meant to address the issue is being skirted.
“The decision was taken that we need to do some further reform. We are still paying inflated prices for generics and we understand why — it’s because of these allowances.”
Stevenson would not say what the changes being contemplated involve since no final decision on the policy options has been made, nor would she discuss the recommendations made in the McKinsey and Co. report that informed the process. Health officials asked the firm to do the report before Premier Dalton McGuinty banned untendered consulting contracts in June.
It’s up to the government, she said, when the changes are brought in.
“It could be really soon or it could be in a couple of months,” she said.
Stevenson was front and centre last summer when the Health Ministry cracked down on hundreds of millions of dollars in abuse of the professional allowance system, slapping several firms with multi-million-dollar fines — all of which are being contested.
“We know there are countries that are paying 95% less for generic drugs than we are,” Stevenson said. “It’s not because the generics are pocketing that — it’s these allowances.
“We think the value of that should be in the payer’s hands.”
Ben Shenouda of the Independent Pharmacists Association of Ontario wouldn’t comment on the specifics of the changes as he was privy to the talks, but said he expected an announcement in weeks.
“We think we’ve got a deal that will achieve their objectives on value of money and close the holes they’re talking about,” Shenouda said. “In the meantime, it should keep us (pharmacists) in shape business-wise.”
The passage of another bill expanding pharmacists’ scope of practice and allowing them to be paid for a wider range of health-care services “is the enabler” for the deal, Shenouda said.
The fact the changes are coming under the shadow of the province’s $24.7-billion deficit did not escape critics, though. The NDP’s Michael Prue said Finance Minister Dwight Duncan could save bundles by banning consultants.
“He should have announced the first thing I’m going to do is get rid of all the consultants,” Prue said. “I’m going to save a half a billion dollars. The second thing he should have done is he should have started looking at his own austerity.”
Susan Eng, vice-president of advocacy for CARP, said she supports efforts to reduce generic drug costs because studies show that Canadian jurisdictions pay a lot more for the medication than the United States.
