“Compromise” Generic Drug Plan Means British Columbians Pay More than Ontarians

CARP is calling for national access to well-priced generic drugs after the province of British Columbia announced less dramatic cost reductions than Ontario. BC avoided the confrontations with the province’s pharmacies that we have seen in Ontario, following the banning of a controversial “rebate” practice.

Generic drug companies have in the past paid Ontario pharmacies more than $800 million to stock their products.

Both BC and Ontario cite the Competition Bureau report that blame the rebates for high generic drug prices and Ontario first reduced them and recently banned them altogether.

Ontario is phasing the government-mandated prices for generic drugs down to 25% of brand-named drug prices—immediately for government purchases, and over the next three years for private payers.

BC’s announcement reduces generics from 65% to 35% of brand-named drugs gradually phased in for both government purchases and private payers from now until 2013, and leaves the companies the option of providing the rebates, which they call “professional allowances” in place.

This may explain why industry executives flanked BC’s Minister of Health, Kevin Falcon, as he announced the new rules, while Ontario’s Deb Matthews has been the object of an all-out public relations war with drug store chains and pharmacies threatening to close over the lost profits.

The industry is watching to see if other provinces will follow Ontario’s lead, or British Columbia’s. CARP’s Susan Eng says, “Canadians should not be penalized by higher drug prices according to where they live.”

Keywords: drugs, pricing, costs