Give credit where it’s due: this second round of changes to the province’s pharmaceutical regime, announced last week, is going to save Albertans a lot of time and money.
The two aspects that will affect people most — the reduction in cost for generic drugs and the ability for pharmacists to renew prescriptions without a doctor’s orders — on their own make the whole package worthwhile. Some people might even be able to get their annual vaccinations at their local drugstore next year.
Other measures, such as those ensuring that rural pharmacies can retain a full slate of services and to pay them a slight subsidy for filling lower-value prescriptions, will enable the first two changes to last.
Right now, generic prescription drug costs in Alberta are generally the highest in Canada. They cost about 75 per cent of the costs of name-brand drugs. The new changes, set to take effect beginning next April, will reduce that average to 45 per cent.
For people who have no drug insurance plan, that will be a huge savings. Those who pay premiums into group health plans should expect to see premium reductions.
By provincial estimates, the province itself hopes to see a direct savings of $100 million, while consumers should gain $100 million collectively annually.
Some of the province’s savings will be used to create a $5 fund for rural dispensaries, who often act as primary care providers in small towns.
It’s hard to imagine how many different drugs a pharmacy has to keep in stock. The province approves 15 to 20 new generic drugs alone each year. That’s a lot of expensive inventory to carry.
Now, consider that under the present scheme, although 56 per cent of all drugs prescribed are generics, they only account for 25 per cent of the total cost of drugs Albertans pay. When the cost of generics is dropped even more, that ratio will get more extreme.
That means pharmacies, which are private businesses, will have to keep an ever-larger inventory of drugs on hand, but which will provide ever smaller value into the total business.
Add to this the fact that drug manufacturers pay rebates to pharmacies to keep their products on the shelves, and this will be reduced as well, and it becomes clear that a lot of negotiation needed to be done between government and the industry association, to ensure that savings to consumers don’t drive pharmacies out of business.
There is a pilot project set to conclude next March that involves 110 community-based pharmacies, where new payment schemes are being tested. It stands to reason that if pharmacists are doing extra work (renewing prescriptions, increased counselling on the effects of different drugs, giving vaccinations) that these services ought to properly paid for.
Phase 1 of the drug plan, which was changed last April, has seniors pay $15 per prescription, plus an additional premium for high-income seniors. Low-income seniors get their medications for free (although critics say the threshold is set too low).
But if we can prevent some doctors’ visits, if a provincial bulk-purchase discount can bring down the cost of some brand-name drugs, if more generics can safely replace brand-name medications, this effort will be worthwhile.
Currently, Albertans (and their insurers) spend $2.3 billion on prescription drugs. Saving $100 million doesn’t look so large in that perspective.
But this is a change that has progressed in a negotiated way, was implemented without public outrage, and provides a benefit we can feel in our pockets.
When it happens, we should celebrate it.
Greg Neiman is an Advocate editor.