Reforming Ontario's Drug System: Ministry of Health Backgrounder

• Pharmacies must report the amount of money they receive and how they spend that money on the public side. • Professional allowances must be used for direct patient care • Professional allowances are capped at 20% for the province’s drug programs. No cap exists for the non-government market. Since 2006: • Pharmacy owners have reported that 70 per cent of professional allowances have actually gone toward fringe benefits, bonuses, overhead costs and boosting profits instead of patient services as was the intent. • As many as 100 individual pharmacy owners have failed to disclose any documentation whatsoever related to professional allowances collected, and over 650 provided incomplete reports in the latest reporting period. • Audits have found that some pharmacies and wholesalers have been involved in a ‘re-sale’ scheme which triggered the payment of professional allowances multiple times for the same product — a practice that has resulted in legal action against them.
Eliminating professional allowances would increase the accountability of Ontario’s drug system, enable the government to more effectively compensate pharmacists for the care they provide to prescription drug users and help reduce the cost of generic drugs.

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Ministry of Health and Long-Term Care

Keywords: drugs, pricing, pharmacy