Generic drugs debate explained

Cost of generic drugs should be affordable for all

On April 2, the cost of generic drugs reduced from 40 per cent of the brand name price to 35 per cent across British Columbia.

This is the last cost decrease scheduled under the existing Pharmacy Agreement, which was announced by Health Minister Kevin Falcon in 2010, following an agreement with the BC Pharmacy Association and the Canadian Association of Chain Drug Stores.

The agreement applied to public and private payers and it saw the price of generic drugs in B.C. drop to 50 per cent in October 2010, 40 per cent in July 2011 and 35 per cent in April 2012.

So what does this mean for you?

Essentially it means the cost of generic drugs has become lower and more affordable during the past two years for both public and private payers.

For many, however, this reduction isn’t enough and it forms part of the larger debate around the reduction of drug pricing in the province.

Prescription drugs are a major expense in B.C., equating to $972 million in 2010/11 and it is this cost that the government is trying to reduce.

At Pacific Blue Cross, we are concerned about this issue for all payers, including more than 1,000,000 British Columbians who don’t have drug coverage through their employer.

We are also a strong advocate for drug-cost solutions that benefit everyone; public and private payers, including individuals paying out of pocket.

We are pleased with the government’s work to date to reduce prices for generic drugs across the board and moving towards equitable and consistent pricing for all British Columbians.

Equally important, we are supportive of a solution that plan sponsors and patients can easily understand and adopt.

So what happens next?

The last cost decrease under the existing Pharmacy Agreement has now taken place and it has not yet been confirmed what the new solution will be.

In February 2012, the Ministry of Health announced that it was terminating its agreement with the B.C. Pharmacy Association and the Canadian Association of Chain Drug Stores.

This is because the agreement failed to result in the significant savings expected.

British Columbia was on track to save $122 million over three years under the deal, but that is still $50 million short of the savings the parties had agreed to.

In its place, the Health Minister Michael de Jong has announced the government will introduce legislation to further lower the price of generic drugs.

This is the same as cost savings imposed through legislation in Ontario.

The new legislation will aim to reduce the cost of generic drugs to 25 per cent of the cost of the brand name drug by April 1, 2013.

It’s expected to be introduced during the spring sitting of the legislature and we eagerly await this announcement.

We fully support the government’s efforts to reduce the cost burden of drug pricing and we hope that the cost of generic drugs will become truly affordable and accessible to both the public and private payers alike.

By Ken Martin, President and CEO of Pacific Blue Cross.

100 Mile House Free Press

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