The governments of both Newfoundland and Labrador and New Brunswick have launched new generic drug policies to bring prices more in line with those paid by other Canadian provinces. Newfoundland and Labrador has been paying around 60% of brand-name prices for generics, according to the provincial government. Effective April 16, 2012, prices were lowered to 45%; they will go to 40% on October 1 this year and then to 35% on April 1, 2013.
New Brunswick has the same goal, but will move more quickly. Generic drug prices are to drop to 40% of the brand-name price in June and to 35% in December. Current prices are 50% to 70% of the brand-name equivalent, the government says.
Although the 2 provinces have similar objectives and price targets, the new generic policies are generally playing out differently with pharmacists in each of the jurisdictions.
PANL and Government of Newfoundland and Labrador reach tentative agreement on pharmacist compensation
The Pharmacists' Association of Newfoundland and Labrador (PANL) and the Department of Health and Community Services reached a new, 4-year tentative pharmacy services agreement on April 15. While noting that pharmacists didn't get everything they had hoped for, a PANL news release called the deal “the best provincial contract to date on a national scale.”
Pharmacists remain dissatisfied with a “major shortfall” in core dispensing fees, says Mary Ann Butt, executive director of PANL but are pleased the government has agreed to reimbursement for professional cognitive services, including medication management and, for the first time, medication reviews.
“Although it's a bit early to define the full impact of the new policy, we believe we have negotiated a contract that will assist pharmacies in dealing with the government's generic reform,” says Ms. Butt.
The 2 parties also agreed to eliminate a 10% drug surcharge and to ensure that seniors covered by the provincial drug plan would pay no more than $6 per prescription.
“Pharmacists in this province remain somewhat behind those of other provinces with respect to advancing the scope of practice,” she adds. “However, we're encouraged that government has expressed interest in working with us to provide a framework for additional services we can provide and be reimbursed for.”
Independent pharmacies in Newfoundland and Labrador are not included in the pharmacy services agreement. They have expressed significant concerns about the possible impact of the new pricing regime on their economic viability.
Similar concerns exist among pharmacists in New Brunswick in light of their government's generic pricing reductions.
New Brunswick pharmacists warn of economic losses of $100,000 per pharmacy
Pharmacists in New Brunswick do not have a formal agreement with the province on compensation — a situation that has long been a source of frustration for the New Brunswick Pharmacists' Association (NBPA) and is a factor in the the current dissatisfaction with the new generic policy.
The province plans to invest $4.5 million over the next year to offset pharmacy revenue losses, including raising dispensing fees by $1 and making the PharmaCheck medication review program an insured service under the public drug plan.
“Our members are not pleased with the level of re-investment,” says Paul Blanchard, NBPA's executive director. “The province will invest only 28% to 30% of its generic cost savings into pharmacy services, far lower than what other provinces have done.” Pharmacies are predicting an average loss of $100,000 a year, says Mr. Blanchard.
During consultations into the policy, the NBPA had pushed for approximate parity with pharmacists in Nova Scotia. “That hasn't happened. In Nova Scotia, the re-invested savings are more like 50%, pharmacists there have higher dispensing fees and drug mark-ups, and they also have a transition fee, which we don't have at all,” he adds.
The province didn't follow Nova Scotia's lead in providing a 30-day “wash-out” period in which pharmacists can clear out inventory purchased at higher prices. “I have members who will buy inventory on May 25 for $60 and in June, they'll have to sell it for $40.”
The association planned to step up advocacy efforts with government representatives, including through talks with the premier. Meanwhile, some members have already put customers on notice that they will stop taking the province's drug plan cards as of June 1.
“In the long run, one positive change is the creation of a government-pharmacist working group that will deal with scope of practice issues and analyze the financial and professional impact of the new policy,” says Mr. Blanchard.