Legislative changes could force small drug stores out of business

By Ken Johnston
Editor

It could be the final nail in the coffin if the proposed changes to Ontario’s pharmacy regulations are enacted.
Three years ago new regulations were enacted by the current Ontario Liberal Government. At that time the government forced the price of generic prescription drugs to be cut in half. Pharmacies across the province and especially smaller independent ones like Rainy River Drugs were very worried about how they would be able to afford the changes.
RR Drugs Pharmacist Sara Berg said in 2007, “I hope I don’t have to close but I can’t stay open losing money.” As it turned out she did not close but adjusted to about a 10-15% loss in profits.
Now the new changes will see the price of generic drugs in Ontario cut by another 50%. That means they are now being regulated to a price of 25% of what they were just four years ago. Berg said, “Many companies are already stopping the manufacture of generic drugs as it will not pay at that rate.” She gave the example of Elavil which is an anti-depressant, sleep-aid and has several other uses. It was only being made in generic form as once the patent expired on the name brand the generic was so cheap it did not pay to make the name brand. “Now patients that were on Elavil will have to go back to their doctor to see if there is something else they can take,” explained Berg.
In addition to cutting the price of generics in half, the province plans to eliminate professional allowances paid to pharmacies from the generic drug makers. That money was to be used by pharmacies to fund extra services they provide, such as counselling patients about the drugs they take, holding clinics, monitoring blood pressure of patients, etc. The province claims that numerous pharmacies were in fact abusing this system and pocketing the money as profit.
Berg begs to differ, “We have had to fill out regular reports on what we use the money for. It is not for profit but is essential for providing services patients need.”
Berg also pointed out that the province has kept a cap on the fees pharmacies can charge for dispensing drugs. It has stayed relatively unchanged at $7 for the past two decades. In the new plan the province has agreed to allow an increase to $8, but Berg says the cost to fill a prescription is realistically at about $14.
Literature about the changes says, rural pharmacies may get an additional $4 for dispensing fees which if Rainy River Drugs qualifies, would still be below the $14 cost.
The province has also promised $150 million to help rural pharmacies cope with the changes. “$150 million, including a new $100 million fund, would compensate pharmacy owners for the professional services pharmacists provide to Ontarions. Within this funding, money would be dedicated to rural pharmacy services and long term care pharmacy services,” said the province.
Berg’s concern about these promises is that she may not be considered rural. “I have read that any pharmacy that is located in a community where there is a practising physician will not be considered rural.”
There has been no clear criteria laid out for what will be rural. However Minister of Health Deb Matthews recently said in an interview with Global Television, “We’ve got special provisions for rural pharmacies because we know that in some communities where’s there’s only one or two pharmacies, we need to provide special supports for those rural pharmacies.”
Berg said that while the government’s focus is on generic drugs the majority of the prescriptions she fills for the Ontario Drug Plan (government paid prescriptions) are for name brand drugs. She said that only 23% of the ODP bill are generics. “These changes do nothing to lower name brand drug prices.”
The province is claiming it can save more than $500 million by further cutting the generic drug prices. “I don’t think the people in Ontario understand how much more we pay for generic drugs than people in other parts of the world. There is a drug called Enalapril, and it is a typical drug for high blood pressure. We pay fifty cents, in the US they pay ten cents and in New Zealand they pay two cents for the identical drug,” said Matthews in that same interview with Global.
Berg noted that the government has been less than willing to consult with pharmacists about ways to make changes to the system. “We (Ontario Pharmacist Coalition) sent a comprehensive proposal to the government last August but they did not give it the time of day.”
The estimates are that about 30 to 40% of Ontario’s small independent pharmacies may have to close under these changes. While Berg has not conceded that she may have to do that yet, she said if the store is not profitable she may have to close. “I don’t want to leave here. I just bought a house and this is my home town. I love it here. But I could close and easily find work elsewhere, probably in Manitoba without all this extra stress.”
She has put major renovation plans on hold for her pharmacy. “I will have to wait and see what happens.” She planned to have them done this year. Her store employs three full time and 7-8 part time workers.
If people want to voice their concerns about this issue or learn more about it, Berg suggests that people check out the Ontario Pharmacist Coalition’s website at www.stopcuts.ca.