Transcript for Sunday, April 18, 2010 – 0700, 1130 and 2400
Monday, April 19, 2010 – 0630
Government vs Pharmacies over Drug Prices
GUESTS –
Hon Deb Matthews, Minister of Health and Long Term Care
Rita Winn, General Manager, Lovell Drugs
SEAN MALLEN: Let me tell you a bit about my Aunt Dot. She was my maternal grandfather’s sister. Dot’s official name was Florence Boyce, and it’s a point of some family pride that as far as we can tell, she was the first married woman in the province to get a degree in pharmacy. I have a picture of her – a striking black and white shot dated 1918, of a slender, serious-looking young woman standing in her pharmacy in the village of Sydenham. I don’t know how much sexism Aunt Dot faced as she blazed that particular trail, but looking at the determined expression on her face in that picture, I pity anyone who stood in her way.
Pharmacists have always enjoyed great respect in our society, but now they find themselves in a hammer and tongs fight with the government of Ontario.
(video clip)
There are more than 3,000 pharmacies in the province, ranging from huge chain stores that also sell makeup and groceries, to small businesses, where drugs are basically all that they do, and they say they’re under siege.
Jeff May, Vice-President, Shoppers’ Drug Mart: We’re looking at the potential of cuts in our business, and unfortunately we don’t want to have to do this, but we have to look at changes in our business.
The province is cutting generic prices in half, but at the same time eliminating so-called professional allowances that pharmaceutical companies pay to pharmacies in return for stocking product, about $750 million last year, money that the Health Minister likens to kickbacks that pushed up prices.
Hon Deb Matthews, Minister of Health: I have a simple message for big pharmacies. The days of artificially high drug prices, paid on the backs of patients and taxpayers, are gone.
The pharmacies called it a health care cut, claiming dispensing fees don’t nearly cover their costs. They fought back with hard-ball tactics; Shoppers started cutting store hours in the minister’s home town of London.
Streeter: I voted for Deb Matthews, and I didn’t vote for her to you know, bring hardship for people like this. It is a shame.
On this week’s Focus – Drug War.
From the Global News Room in Toronto, Focus Ontario with Sean Mallen.
SEAN MALLEN: Thanks for joining me again. Later in the program I’ll be joined by a representative of Ontario’s pharmacists, but first I welcome back to Focus the Minister of Health, Deb Matthews. Good to see you again.
Deb Matthews: Nice to be here, Sean.
SEAN MALLEN: So, the pharmacists’ argument is that the system of professional allowances was set up by the Liberal government. It’s now become an essential revenue source, that dispensing fees don’t nearly cover the cost of doing business. They say this is a health care cut. So?
Deb Matthews: Well Sean, what this is, this is all about getting lower drug prices for the people of Ontario. Now I don’t think many 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 this is a typical drug for high blood pressure. We pay fifty cents, in the United States they pay ten cents, in New Zealand they pay two cents for the identical drug. I think if people actually knew how much more we were paying for drugs in this province, they would be clamouring, saying why aren’t you doing something about it. So we’re doing this to get lower drug prices for people.
SEAN MALLEN: Okay, but the impact is on pharmacies, they’re losing like three-quarters of a billion dollars, depending on what the estimate is. An essential revenue source, going to mean fewer pharmacies it looks like, fewer services.
Deb Matthews: We’re putting money back into pharmacy because we have enormous respect for the work that pharmacists do, those front-line pharmacists. We want to pay them directly to provide services for their customers. Pharmacists are highly educated; they’re very well-trained. We’d like to see them play a bigger role in the health care system than they currently do. So that’s why we want to pay them directly for services that they provide.
SEAN MALLEN: Okay, so you’re talking about this extra hundred million dollars you put on the table in this regard, for things like vaccinations, things like that, a bunch of other things.
Deb Matthews: Well, it’s actually $246 million more because we’re increasing dispensing fees too. We’ve got special provisions for rural pharmacies because we know that in some communities where there’s only one or two pharmacies, we need to provide special supports for those rural pharmacies.
SEAN MALLEN: Okay, but either way you cut it, it’s a fraction of what they’re getting from the professional allowances. There’s a lot of heat on both sides here. We’ve got ads on one side; we’ve got you writing letters saying don’t hold patients hostage. How do you take down the heat on this? There’s some thought you might sweeten the offer a little bit, put some more money on the table for them. Is that going to happen?
Deb Matthews: We’re in the process now where the regulations have been posted. We’re looking for comment back on the regulations. What I can tell you is this, we’ve put a hundred million dollars in addition to the fifty million dollars we’ve already allocated from Med Check, and only a portion of that is actually being used right now. So the $150 million for those services, if pharmacists in fact embrace the new way of doing business, and we see that we’re actually getting value for that money, that people are going to the pharmacist instead of going to the emergency department, or going to the pharmacist instead of going to the doctor, then of course I would have a very open mind to supporting that more. So we need to see what that uptake is.
SEAN MALLEN: So what does that mean then? Does that mean if they start doing more – just so I understand what you’re talking about – you’re talking about just taking full advantage of that extra hundred million, or you’re talking about okay, if you guys really play ball with me now, I will put more on the table. Is that what you’re saying?
Deb Matthews: What I’m telling you is that we’re committed to the hundred million dollars, plus the fifty million we’ve already allocated on Med Check, plus the increase in dispensing fee that we pay for people on the Ontario Drug Benefit Plan, and extra money for rural pharmacies; and if what we find is true, that pharmacists actually can play a more important role in our health care system, I would welcome that. I think that’s the future of health care in this province. We’ve just passed legislation, Bill 179, that actually expands the scope of practice of pharmacists, that is they’re going to be able to do things that they can’t do now. I want them to use those new powers.
SEAN MALLEN: Okay, but the money on the table that you’re offering now is still a fraction, to repeat the point. So you’re talking in kind of a slightly obtuse way right now about whether it’s actually ultimately going to be mean money that’s on the table now. Will you put more money on the table to take down the temperature of this dispute?
Deb Matthews: Sean, I’m absolutely committed to the reforms that we are proposing, the elimination of professional allowances. If I may for a moment speak about professional allowances. These are payments that are paid by the generic companies to the pharmacies in exchange for those pharmacies stocking those products on their shelves. It’s a system that we started to monitor back in 2006 in the first wave of reforms. We let pharmacies know then that we were concerned. We required them to start reporting to us, what are you spending these professional allowances on, and we were very clear about what they could be used for. By the pharmacies own accounting, only 30 percent of what they were receiving in professional allowances is going to that direct patient care. So this was a practice that was open to abuse. It was not being used for those front-line services. It was time to clean up the system Sean, that was tremendously inflating the cost of drugs for the people of Ontario.
SEAN MALLEN: I have to stop you there because I’m flat out of time in this segment, but back in a moment to talk more with Deb Matthews.
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SEAN MALLEN: Welcome back to my conversation with Health Minister Deb Matthews. We have a shortage in some areas in this province. We have some medical specialties where there are shortages, we have shortages some might say of nurses, family physicians in some areas. Don’t have a shortage of pharmacies. There is some thought that this is all part of reducing the number of pharmacies in the province. Do we need to have fewer pharmacies?
Deb Matthews: No, I wouldn’t say that. What I would say though is that my responsibility is to make sure that Ontarians pay a fair price for their drugs. I’m going to let the pharmacy chains and the pharmacy owners figure out the right business model. They’re going to have to make those decisions.
SEAN MALLEN: But that’s the effect though yes, you take three-quarters of a million dollars out, especially the smaller players, they’re going to be forced out, aren’t they? And there will be more consolidation.
Deb Matthews: You know it depends on how they embrace the service. What I can tell you is that we’re paying way too much, many times more – five times more, four times more – if you actually looked at the number and how much more we’re paying for drugs in this province, compared to the people across the border, you would say government has to take action. So that’s what we’re taking. We’re taking action. It’s the right thing for people who pay cash for their drugs, they will typically save hundreds of dollars a year on the purchase of those drugs. It’s the right thing for people who are on the Ontario Drug Benefit Plan because it means we’re going to be able to offer more drugs for more people; and it’s the right thing for people who have their drugs paid by their employer benefit plan because those benefit plans are going to be able to expand their services or cut their premiums.
SEAN MALLEN: Let me just pursue that a little bit if I could. We talked a lot about the pharmacies, but the generic drug manufacturers have weighed in on this a little bit as well, and they’re suggesting that it might have the contrary effect. I’ll play you a clip from a representative from the generic manufacturers.
(video clip)
Jim Keon, Generic Pharmaceutical Association: Some of the existing products could be not available in the future if the costs weren’t covered, and the development of new products may be slower and may be fewer than was coming generic. And the impact of that on the drug program is sort of counter to what the Minister is hoping, because if generic is not available then the program has to continue to pay for the brand name product in the future at four times the price.
SEAN MALLEN: Okay, so they say it’s going to be higher prices. What’s your answer to that?
Deb Matthews: You know generics play a very important role in our pharmacy care system. They do offer much lower-priced alternatives to brands when those brands go off patent. We want to support the generic industry. We want to work with them to make sure that we get this right. We put some exemptions in the regulations. They’re reviewing the regulations, they’ve got thirty days to submit their response, and so we’ll take a really good look at that, because it is important to have generics available for people.
SEAN MALLEN: Okay, just a minute left though in this segment. But to his central argument, that it’s going to force prices higher by delaying generics getting on the market because the brand names are all more expensive. Is he dead wrong, or you don’t really know yet?
Deb Matthews: This is all about lower prices for Ontarians and access to more drugs. That’s why we’ve got the Cancer Society with us, we’ve got Heart and Stroke with us, CARP (Canadian Association for Retired People) – the advocacy group for seniors is with us, we’ve got the Ontario Federation of Labour, and we’ve got teachers’ insurance plan. We’ve got a lot of advocates with us on this side, people who know that when you look at it it just doesn’t make sense that we’re paying so much more for drugs than other OECD countries, other states, other places.
SEAN MALLEN: Okay, to be continued. Thanks for coming on the program – Deb Matthews.
Deb Matthews: Thank you, Sean.
SEAN MALLEN: And back in a moment to hear from the pharmacists.
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SEAN MALLEN: Now the people leading the charge against this reform. Rita Winn is a pharmacist, and the general manager of Lovell Drugs in Oshawa. Welcome to Focus Ontario.
Rita Winn: Thank you for having me.
SEAN MALLEN: So you were listening to the Minister’s arguments there. These professional allowances, they’re crucial to pharmacists’ business. They’re described as subject to abuse, not being used for what they’re supposed to be used for, and artificially pushing up the price of drugs. What’s the answer?
Rita Winn: Interesting point. The professional allowances, as the Minister said, were created by the McGuinty government in 2006, and they’re regulated and audited by the government; and she mentioned that we had to spend money in several areas, which is all leading to patient care; and she also mentioned that 70 percent of those funds were not being used for the intention, and I don’t believe that. The 70 percent that were used on wages, those are monies that are paid to pharmacists that actually deliver the patient care. So I come back to what this amounts to is cuts in health care and front-line health care. Now pharmacists are the front line and the last line of defence really in the community.
SEAN MALLEN: As I pointed out to the Minister, I don’t think anyone can argue that there’s a shortage of pharmacists or pharmacies in this province. It could be a bitter pill – no pun intended – to accept, but should we just have fewer pharmacies in the name of getting down health care costs?
Rita Winn: I don’t think that it would reduce health care costs. Long term I think this would a short term, and long term there would be no savings. I think there was a report out today that over two-thirds of Ontarians over the age of 65 are on five or more medications. So we have baby-boomers using more and more medication; people are living longer, they need more pharmaceutical care and more medications. So I would see the need for pharmacists increasing.
SEAN MALLEN: To that end this week I spoke with someone who uses a lot of medications, a woman named Louise Binder. She’s HIV positive; she’s been an activist on drug issues, takes a lot of medications, as people who are HIV positive do. She’s not very sympathetic to the pharmacists’ side. I would like to play a clip from her and see what you have to say about that. Here’s Louise Binder:
(video clip)
Louise Binder: I can’t afford to be in a situation where I can’t get help like that when I need it. It’s tragic really and disappointing to me, really very disappointed that the pharmacists would take this position. It feels pretty greedy.
SEAN MALLEN: She’s talking in the context of store hours being cut back, less access, and she’s pretty much blaming the pharmacists’ side.
Rita Winn: Yes, I think what she’s saying there is not looking at the whole picture. You know we have to look at what pharmacists do on the front line, keeping people out of emergency (rooms), helping people like Louise, we’re the front line. We all want to reduce drug prices, we’re not disagreeing with that. We’re just saying that we need to be funded properly and professional allowances were doing that for us. So now each and every pharmacy is going to look at $300,000 coming out of their revenues.
I manage eleven stores and I can’t possibly see how these reckless cuts could be dealt with; and you know you could look at reducing hours, reducing wages, starting to charge for services, but $300,000 a pharmacy, I don’t know where those funds would come from.
SEAN MALLEN: You heard the Minister’s argument that they’re going to be asking pharmacists to do more, things like vaccinations, a lot of other kinds of services, for which they’re going to pay you, and she’s urging you all to embrace that and kind of implying that maybe there might be more money on the table there. Is that not enough? Can you change the business model to adapt in that way?
Rita Winn: Interesting point. Change doesn’t happen overnight. We embrace the idea of Bill 179 and we look forward to a larger scope of practice. That’s what pharmacists have been trained to do and there’s so much more that we can do.
SEAN MALLEN: That’s the bill that gives you more power to do more.
Rita Winn: That’s correct. But what we do need is we need to have a stable funding that we could start to provide more. We need to get paid for the things that we do today so that we can start doing more. We still need to serve the patients that are in our stores every day whether they’re calling on the phone for over-the-counter advice or advice on their medications, we still have to do that. And what I’m afraid of is this legislation, if it goes through, as it’s spelled out in the regulations, I can’t possibly see how we could provide more services with less.
SEAN MALLEN: It’s been an interesting battle the way it’s been put together because most of the people speaking are people like you, who are representatives of either smaller chains or individual pharmacies. But the people making the headlines are not you, it’s Rexall, it’s Shoppers’, the people who are charging fees now; Shoppers’ in their case, an interesting coincidence, cutting back hours in the Minister’s home town. What are we to make of this? I mean you’d think the big players, the Shoppers’, are going to be in a better position to survive anyway.
Rita Winn: That might be the case I can’t really say. You know each company and each pharmacy is going to have to look at their own business model, but at the end of day, for each and every store, it’s $300,000 of cuts coming out and the profit margins are not that large to accommodate that. Looking at my own stores, and I have several stores in medical clinics where there’s one pharmacist, two technicians, those people combined there’s no money left. You know how do you pay those people?
SEAN MALLEN: Where’s the middle ground in this then? How is this going to get settled?
Rita Winn: Well, pharmacies actually have been working with the ministry for nine months. We’ve put a proposal on the table that transitions to a new funding model that makes sense, saves the health care system dollars, saves the drug budget dollars, but what we need is a fair funding model. We need to be paid fairly. Our dispensing fee has increased by fifty-six cents in twenty years.
SEAN MALLEN: Well, I think one of the things you’re talking about is basically, because you say dispensing fees only cover about half of your costs, so ultimately you want people buying the drugs to double the dispensing fees, yes?
Rita Winn: We need the dispensing fees, that’s our source of revenue. Right now we get our revenue from the professional allowances and the dispensing fees. So we need to cover our costs and to be able to provide more service. So at the end of the day these are health cuts.
SEAN MALLEN: But doesn’t that come down to affecting the patients? You mentioned that a large proportion of the people who need the medications are seniors, fixed incomes. You double their dispensing fees?
Rita Winn: Absolutely, that’s a difficult pill to swallow for them too. So I think the Minister is speaking that this is going to lower drug costs, that’s good, that’s going to lower drug costs, but it’s not going to reduce the overall costs because we are going to be forced to look at increasing service costs for other areas to make up those differences.
SEAN MALLEN: So you represent a small chain, eleven stores, I gather, in eastern Ontario, or east of Toronto at least.
Rita Winn: Eleven stores, that’s correct.
SEAN MALLEN: How’s your business model going to have to change then? What are you going to do?
Rita Winn: That’s a good question. I would love to be doing more service, and actually my stores are very specialized. We do home infusion, we do a lot of different interesting things, but we need a base line of funding to provide those services.
SEAN MALLEN: The spectacle of Shoppers’ cutting back hours in the Minister’s home riding, pretty hard ball as we said. Do you feel the image of pharmacists might be changing a little bit, not quite in the high esteem that they used to be in?
Rita Winn: I don’t think so. This is a cut of health care professionals’ funding. So our patients rely on us every day and we would never not want to deliver that excellent quality care that we’re used to delivering.
SEAN MALLEN: Okay, that’s our time. Rita Winn, thanks for coming on the program.
Rita Winn: Thank you.
SEAN MALLEN: And one segment to go on Focus, with your comments and the Play of the Week – Watering the Boss.
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Play of the Week
(video clip)
Premier Dalton McGuinty: A few weeks back I was in Washington – (clears his throat)
SEAN MALLEN: When the Premier was handing out awards for agriculture excellence this week, he ran into a case of dry throat.
Premier Dalton McGuinty: There was a visionary – excuse me – Right now there’s another opportunity like that waiting.
(Madeleine Meilleur hands him some water)
Dalton McGuinty: Merci madame. If you weren’t already in cabinet, I’d put you there.
To the rescue with water was Social Services Minister Madeleine Meilleur. While our camera followed Meilleur, another Liberal MPP pitched in by taking back the mug. That was Liz Sandals, still on the back bench, but perhaps hopeful of rising prospects.
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And now your comments. Two weeks ago we spoke about the attempts to cut the deficit by freezing public sector wages. First an e-mail on the subject from Judy Smith, who writes:
“We have a $21 billion deficit and we have more than 65,000 employees from the provincial government, earning in excess of $100,000. I do not earn that amount and work very hard and conscientiously in the private sector. I do want those that earn it to make a lot of money, but where is the accountability here? How about we put people on commission, or have a base salary, and then bonuses based on performance.”
And listen to this voice-mail: “The CUPE representative reminded everybody that civil servants spend their money in towns and he thinks they add to the economy. He didn’t point out that their salaries come out of the towns before they spend them there. In fact they don’t actually add to the economy, they just circulate money and not necessarily do much good when they do it.”
So I wonder what you think about the drug reforms. Here’s how you can register your comment. You can write me a letter to:
Focus Ontario
Global Television
81 Barber Greene Road
Toronto, Ontario
M3C 2A2
e-mail: focusontario@globaltv.com
voice-mail message at 1-866-895-9555
Here’s our web information: http://www.globaltoronto.com/focusontario
And that’s our program for this week. I’m Sean Mallen; thanks for watching. See you next weekend.
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