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Posts Tagged ‘Pharmacists’

In the wake of pharmacy reform and massive rebates still flowing to retail chains and independent pharmacy buying groups, the one time darling of the pharmacy world SDM’s future as a investor bet is being openly challenged.

The one time SDM “cheerleader”, analyst Perry Caico of CIBC World Markets, who had been referred to by politicians as THE unbridled stock promoter for SDM, has said he is “concerned” for the once great stock investment.

He claims pharmacy reform and government strong-arming has and will compromise the viability of SDM as the perfect investment.

As the former CEO of the largest professional association of pharmacists in Canada and, immodestly, as a go-to resource for government and private sector organizations on drug plan reform and augmentation, I submit that the issue is not government – it’s a flawed business model in pharmacy.

There is a disconnect between what the public wants and what traditional retail pharmacy in Canada is begging to keep.

In fact, the pall on traditional pharmacy in Canada is not the fault of government. Governments across the country have been and remain concerned that rebates to pharmacy from generic manufacturers artificially keep prices for generic medicines the highest in the world. Pharmacy has been slow to react to government reform from the outset, catering to the notion of staying “whole” rather than adjusting their business models.

I make speeches across North America on drug reform. Audiences tell me they become enraged at what they hear about the massive profits being made by pharmacy when costs continue to rise year over year on private sector plans. It doesn’t make sense in my opinion. With demographic increases in numbers of prescriptions being dispensed, the patent cliff making generic drugs more prolific, one would assume prices and costs would decrease. So how does it work that costs are increasing?

In the work we do, we can confirm that the public and government are ahead of the curve on pharmacy reform and will talk and walk with their feet when confronted with high prices for drugs, variable fee structures from one pharmacy organization to the other and an increasing understanding of how this drug system has set pharmacy up as the biggest beneficiary.

The US, UK, Italy, Spain, Australia, New Zealand and even Ireland have undergone real drug reform. One that doesn’t hide the fact that designing a system means realizing lower costs and prices.

With governments leading the charge on making real change in prescription drug plan reviews and retail pharmacy still playing the game of introducing schemes and ‘blueprints’ to maintain their position – little wonder analysts are turning on the once and mighty chains!!

The beneficiaries are undoubtedly the public and plan members who may see new models considered and introduced.

M. Kealey - Economic Club of Canada

Economic Club of Canada

- Marc Kealey

The Aftermath of Reform

Sunday, November 21, 2010 @ 05:11 PM

Recently articles have been written about the aftermath of the drug reform legislation in Ontario and on the eve of the Canadian Foundation for Pharmacy’s Annual Meeting, I wonder if  pharmacy officials attending  will address the issue of their behaviour during the legislation period.

In mid 2009, the government of Ontario made public overtures that it intended to review the Transparent Drug System for Patients Act ( legislation that was originally passed in 2006 to save costs to the public drug program in Ontario). Written in the Act in 2006 was a provision that government will review the Act every two years.  In the intervening years since the original Act was passed, Pharmacy was noticeably absent from any positive discussions with government on how it (pharmacy) could impact positively on patient care and save dollars to an ever-increasing cost for drug plans in both the public and the private sectors.

The review of 2009 was meant to assist private sector drug plans to manage cost increases on their formularies and match the savings realized in the public sector.  It should be noted that when the Transparent Drug System for Patients Act was originally passed in 2006, its jurisdiction extended to both the public and the private sectors.  However, the enforcement of the Act, at that time, never extended to the private sector.  This issue, in and of itself, created a two-tiered drug plan system where drug plan and actual drug costs in private sector plans were double digit higher than in the public system.  It was an untenable proposition from 2006 to 2009 and plan designers (among others) in the private sector appealed to government to right the legislation.

Pharmacy’s reaction to the proposed legislation in the months after 2009 was not only surprising, it was shockingly out of touch with the current economic thinking of Ontarians.  There were mass protests by pharmacy and intellectually dishonest comments made by pharmacy  officials(some suggested that stores would close, others suggested that service would be impacted and some even called the government reckless).  Pharmacists did not stand up for their profession during this time.  In fact, many protested in the face of government suggesting that the end was near.

I was a delegate at a public policy conference in the summer of 2010 in Collingwood where two bus loads of pharmacy students protested against those in attendance.  When pressed as to why they were protesting, there was a flurry of dramatic and factually incorrect comments from them. It was a shameful exercise – largely because none present had an open mind to the reasons why government needed to enact these changes –  it was, in the minds of these students apparently, only about them and their economic futures.

Pharmacy is a lucrative business.  In Canada it amounts to over $25 billion in annual sales.  Fees for pharmacy service in the public sector amount to about $700 million annually (it’s similar for private sector plans).  So what’s  the beef?

It has everything to do with how professions manage when public policy changes occur.  When I was CEO of the Ontario Pharmacists’ Association, I told pharmacists time and time again that the ONLY way to manage through the changes of the Transparent Drug System for Patients Act was to be actively and positively involved with government.  Pharmacy rebuked that exhortation and designed what they called “an opposition strategy”  (in short to use the opposition MPPs to attack the government).   Those who remember the election of 2007 know that pharmacy failed miserably in that fight.

Again, three years later, the sector is stymied as to why government distrusts pharmacy and why several stakeholder organizations, including CARP and CLIHA, have lined up against them.  And what is pharmacy’s response?  They punish their professional association (the Ontario Pharmacists’ Association- OPA).

It’s astonishing that Shopper’s Drug Mart, the apparent leader for the profession in Canada, would make public statements suggesting that it would no longer support its pharmacists who wish to belong to the OPA.  This kind of short sighted thinking fans the flames of mistrust between public policy framers and the professions with whom they aspire to collaborate on the future of the profession.

The outcomes of the drug reform measures introduced by Ontario have taken hold across Canada and helped this country come of age in world where drug costs are spiralling out of control and this has been a boon for patients.

Pharmacists need to embrace the notion that public policy is the purview of government and that people govern people!  When an entity pushes, the pushed either ignore the pusher or push back themselves.  Pharmacists as a profession need a lesson in how to manage through public policy debates in a positive manner.  Without the support of their member organizations –  like Shoppers –  they are destined for a rebuke from government!

- Marc Kealey

Drug reform and what’s the buzz!

Monday, August 23, 2010 @ 06:08 PM

I was a key note speaker this past week at the International Foundation of Employee Benefit’(IBEF) Conference on Public Sector Pensions and Benefits.  It was a well attended conference  in picturesque Whistler BC, with delegates from across Canada and Chaired by Murray Gold – the most experienced legal expert, in my opinion,  in Canada on pensions and benefits.

My message was clear – the sustainability of drug benefit plans is in jeopardy IF plan sponsors, consultants, employers and employees don’t recognize that the status quo with respect to drug pricing, plan design, formulary management and prescription drug distribution is no longer an option.  There are other ways to look at predictable and sustainable savings for plans –  and they my include some tough medicine for traditional business approaches to the practice of pricing, dispensing, adjudicating and distributing generic prescription drugs.

The thesis I purport is that the current practice of two tiered drug pricing  (one for the public sector and one for the private sector) and one which I may have helped to initiate on the first place in my former role, is the rationale for the reform measures under consideration and adopted in several provinces.  The measures are not unique to Canada – several G20 nations have adopted drug reform to manage burgeoning costs of prescription medications.  In Canada, the increase of generic medications to replace branded medications whose patents have expired has created a profit boon for chain pharmacy.  What was widely unknown or ignored by plan sponsors or designers is that, in some cases, the massive rebates paid to chain pharmacy actually contributed to the higher costs Canadians paid for the generic medications that they believed  would help save money.  The head of the Competition Bureau of Canada reckoned that some $800 million (Cdn) is paid to pharmacy to dispense certain generic molecules over others.  The net result is that annualized increases in drug benefit plan premiums and drug prices have plagued the system across Canada for years.  Finally, governments are waking up to that reality and doing something about it.  The province f Ontario passed legislation in June to lower generic drug prices over tome to 25% of the brand. The province of BC has followed suit with an agreement to lower prices to 35% of brand in a similar timeframe.  Obviously these reforms have jurisdiction in the public sector plans and, in the case of Ontario, the private sector too. The truth is, the rebating game may never end.  What ever organization controls the means of  distribution and dispension controls the price(s) plans and organizations will pay.

The IBEF is on the right track rigorously educating its membership as to this reality and the options available to them.  For my part I will continue with advocating on behalf of private sector multi employee organizations –  it’s  the right thing to do.

- Marc Kealey

Canada contributes to the world significantly in terms of politics, comedians, natural resource management, innovation in health system design and, of course, the game of hockey. A G-20 nation, Canada often compares itself to and competes with its closest neighbor and trading partner, the United States.

However, when it comes to prescription drugs and their prices, Canada as a nation is compared to countries like Sweden — a bitter pill to swallow for Canadians, who represent 2% of the world’s population.

This article outlines the rationale behind and the reactions to prescription medication and drug plan reform currently underway in Canada. It also a provides a brief historical perspective on the reform environment and offers insights into opportunities for plan sponsors, designers and plan members to maximize reform outcomes.

A Perspective

Pricing for prescription medication in Canada is different from U.S. pricing.

The Canadian constitution gives provinces the power to create their own laws and regulations to manage and govern their health care systems, including prescription drug benefits. Each province has its own formulary and drug benefit plan and has regulatory colleges that govern the activities of health care providers like physicians, nurses and pharmacists.

The sum total of all provincial drug benefit programs is about $12 billion (Cdn) dollars per year.

In Canada, medications—both prescription and over the counter, and specifically those approved for human consumption—are granted approval through Health Canada.

Any pharmaceutical manufacturer wishing to “launch” a medication in Canada undergoes a rigorous approvals process. Patent laws govern the allowable time that a branded medication (like Lipitor™) can sell its product without competition—about 20 years. After the patent term expires, the law provides that generic manufacturers—those approved to manufacture a copy of the branded molecule—can produce and sell their version of the branded medication at a reduced price. Generic versions of any branded medication are sold and dispensed to patients through licensed pharmacies at a significantly lower price than that of the branded medication.

In the current environment of economic challenges, provincial drug benefit programs have little choice but to make changes to improve the financial position of their plans. The cost of drug programs is rising, and the public has little appreciation of those increases. Provincial drug benefit plans across Canada are making tough decisions. Generic drug prices, which seem unnecessarily high and are fueled by what are known as promotional allowances or rebates for retail pharmacies, are the targets of the reform. As frustrated private sector plan sponsors and designers experience similar rising costs, they also are undertaking this same assertive reform. Of course, this reform has created its own sense of frustration among pharmacy owners.

Canada spends about $25 billion (Cdn) dollars a year on prescription medicines. The split between public sector drug benefit plans (such as the Ontario Public Drug Program) and the private sector is about 45% public sector and 55% private sector.<1> It should be noted that rising costs in drug plans have largely accrued from increased drug utilization—for instance, more patients needing medications for chronic illnesses—and actual increases in the cost of medications. In the last ten years, provincial drug benefit programs have witnessed annual increases of anywhere from 8% to 15%.<2> Private sector drug plan sponsors have listed similar annual cost increases.

These issues are not endemic solely to the current economic climate; increases have been commonplace year over year for quite some time. While there appears to be no magic bullet for the future, with some innovative thinking, ingenuity and courage, they can be mitigated and managed.

An Historical Perspective

In the late 1960s, Canada’s federal government limited patent terms on brand medications and allowed for greater manufacture of generic medicines in Canada. Those broad-reaching legislative initiatives opened the door to realized savings for drug benefit plans as they allowed patented medicines to be copied by generic manufacturers when patents expired.

This legislation did not, by any stretch, threaten the existence of any brand manufacturer in Canada.  The brand pharmaceutical sector remains a vibrant part of Canada’s socioeconomic fabric, providing clinical research for new therapies, clinical programs and education opportunities for patient groups, hospitals and medical providers including physicians, nurses, pharmacists and others. In fact, the 1990s and the early 2000s were good years for brand manufacturers with blockbuster medications to manage high cholesterol, hypertension, diabetes, mental health, sexual health issues and cardiovascular disease. Brand-named drugs were listed on formularies across the country.

Clinical research among brand manufacturers continues today for the next disease management tool, such as biologics, to combat cancer, rare diseases and genetic disorders.

The patent legislation of the late ’60s spawned a robust and vibrant generic manufacturing sector that continues to grow in Canada. Generic manufactured medicines account for over 50% of all medicines dispensed in plans across Canada.<3 >

The legislation giving generic manufacturers the right to copy the active ingredient in a previously branded medicine and sell to patients through a pharmacy has meant savings in drug plans.  Generic medicines cost less because manufacturers do not incur the cost of drug discovery; that effort has already been done by brand manufacturers. Similarly, generic manufacturers do not have to incur the cost of what is commonly known in pharmaceutical industry parlance as safety and efficacy because brand manufacturers have already done these studies.

In the last five years, the patents on a number of blockbuster medicines—brand names sold at higher prices in pharmacies to patients—have expired. Generic versions of medicines such as Altace™, Biaxin™, Zyprexa™, Pantaloc™, Pariet™, Actos™, Pravachol ™and Vasotec™ are now for sale at a lower price. In the next three to five years it is expected that more branded medicines will hit the patent expiration cliff.

Prices for brand medicines, set in Canada by a panel known as the Patented Medicines Price Review Board (PMBRB), were about 30% to 40% higher than prices for their generic versions.

At the same time the movement from brand name to generic versions of drugs was taking place, community pharmacy, as a sector, began to consolidate. Throughout the 1970s and 1980s Canada witnessed the firm establishment of chains or banners or buying groups intended to ensure cost-effectiveness and profitability for the retail sector. As a consequence, there appear to be few real independent, community-based retail pharmacies in Canada. The retail community pharmacy universe, therefore, has become a significant force as a distribution channel.

This movement in pharmacy seems to have spawned a philosophical difference of opinion between pharmacy as retailer and pharmacist as health professional. The retail pharmacy, by virtue of its ubiquity and strength, appears to have emerged as the more powerful entity in this reform world.

Competition for shelf space in community retail pharmacy prescription medicine is fierce. Generic medicine manufacturers used to compete against each other for pharmacy’s business through programs aimed at pharmacists and small-ticket items like hand-held information technology devices. Now, they compete solely through cash rebates or free goods to the community pharmacy or chain head offices, which make the buying decisions and allow a manufacturer’s medicine to be dispensed at a local pharmacy or through a matrix established by the pharmacy chain.

This scheme produced the unintended consequence of making generic drug prices, although still cheaper than brand medicines, more expensive in Canada than in comparator countries. It’s widely noted that Canadians pay the highest drug prices for generic medications. Here’s why: Historically, as retail purchases of generic medications grew, so did the “allowances” to pharmacies from manufacturers to have pharmacies stock a particular manufacturer’s products. The prices that pharmacies charged to public and private plans did not take into account the rebates or allowances the retail pharmacy received from manufacturers. This practice inflated the price or the actual cost of the ingredient (not the fee) paid by the consumer and third parties.<4>

Public sector drug plans recognized that rebates or allowances to retail pharmacies ranged from 40% to 80% of the invoice price of medications. The provinces of Ontario and Quebec, convinced that this practice was having an impact on their plans, introduced legislation to curb the practice. In 2006, Quebec passed Bill 130, the Act Respecting Prescription Drug Insurance. The act introduced various cost-containment provisions, including establishing a set price for generic drugs (54% of the brand), and strived to limit allowances paid by manufacturers to retail pharmacy. The act did not affect private sector plans.<5>

In 2006, Ontario launched Bill 102, the Transparent Drug System for Patients Act, which introduced broad-ranging changes for manufacturers and pharmacy. The act went much further than Quebec’s Bill 130; it amended the Ontario Drug Benefit Act as well as the act that governed the private sector—the Drug Interchangeability and Dispensing Fee Act. It established a firm limit on “allowances” to be paid to retail pharmacies doing business with the Ontario Public Drug Program and set generic drug prices in the public sector at 50% of the brand. This 50% limit became the new price in Canada for generic drugs.

In other ways, the bill gave special recognition to the profession of pharmacist. It moved to increase the role of pharmacists as a part of the health team through commitments for increased scope of practice, the ability to advise the public drug program through the Pharmacy Council and a fee-for-service initiative known as Meds Check. <6>

Bill 102 was passed into law in late summer of 2006 amid a backlash from retail pharmacy, which was collectively upset over the impact of the act’s limit on allowances. One of the most significant and unintended consequences of the passage of Bill 102 was a shift in costs of prescription medications and fees for pharmacy service from the newly legislated public sector to the seemingly untouched private sector. Since the passage of Bill 102 in Ontario, drugs sold in pharmacies to consumers are sold under what is now referred to in Canada as a two-tiered drug-pricing system. Patients in the public program pay a lower price for drugs than patients in the private drug benefit sector.

Before the passage of Bill 102, there was little distinction between public sector drug plans and private sector drug plans regarding fees paid to pharmacy and ingredient costs. In fact, private sector plans often mimicked any changes that were realized by changes in public sector plans. Since the passage of Bill 102, however, private sector plans pay about 50% more for prescription and fees than plans in the Ontario Public Drug Program.<7>

Other provinces, watching closely what was transpiring in Ontario, soon followed suit with reform measures to protect their public drug plans. Most notable were the provinces of British Columbia and Alberta.

British Columbia (BC) established its Pharmaceutical Task Force and tried to address the issue of what it deemed “the hidden cost of generic medications” and what it viewed as a growing trend in “frequent prescribing.” After a protracted consultation period, the province reached an agreement with the BC Pharmacy Association with what it cited as “interim changes” to the province’s PharmaCare program.<8> It was interesting to note that the province gave appropriate recognition to the value of pharmacists and, in 2009, invested in patient care options.

In 2009, Alberta introduced its reform measures through its Pharmaceutical Strategy. This two-phased reform measure began in early 2009 with a legislated change to the price of any generic that would be newly introduced on the public drug plan from the previous 75% to 45% of the branded medicine’s price. The province committed to further lowering the cost of generics that were already on the plan. Early this year, the province announced a commitment to a price of 56% of the brand price for these medications.

The province also announced that it would invest in a fee mechanism for pharmacists to provide a cognitive service to patients similar to the program earlier described as Meds Check Ontario.<9> These announced reform measures in Alberta seemingly will not benefit private sector plans.

In the summer of 2009, the province of Ontario’s minister of health began consultations with pharmaceutical stakeholders to create longer term sustainability on its recently reformed public drug program. The minister recently announced that it would begin bilateral discussions with pharmacy on approaches to eliminating allowances or rebates altogether. The province will likely settle on a generic drug-pricing scheme similar to or perhaps lower than the province of Alberta’s scheme. At the same time, Ontario has further recognized the value of the pharmacist as a part of the integrated health team.  Ontario offered the profession scope of practice enhancements, through proscribing authority and other clinical enhancements, to ensure greater access for patients in the health care system.

The Road Ahead

Private sector plan sponsors, designers and consultants have been keenly interested in the outcomes of recent reform measures introduced by provinces. Private sector sponsors are unhappy with the two-tiered drug cost system and have expressed concern and frustration about the practice of generic allowances to pharmacy. Plan sponsors have tried to instill some discipline in plan design to combat increases in prescription drug costs and fees associated with traditional community pharmacy.

Provinces in Canada remain bullish on the need for reform. The Competition Bureau in 2008 suggested that the practice of allowances or rebates to pharmacy from generic manufacturers resulted in $800 million dollars that could be used to reduce the prices Canadians pay for prescription medications,  diverted into chronic disease management programs, or used to lower taxes or benefit plan costs.<10>

Pharmacy as a front has begun to agitate against these reform measures. In some provinces there are threats to withhold service to patients on public drug programs or there are threats to private plan sponsors where a pay-direct card, for example, would not be honoured by certain pharmacy chains.

Governments have moved to combat the animus through further recognition of the clinical value of the role of pharmacists and have amended scopes of professional practice to include them in their reforms.

No doubt pharmacy will try to resist these reform measures—the changes will impact their businesses directly. And they can play a tough game. It will take courage for private sector plans to fend against some of the tactics that pharmacy will employ. But leveraging the strength of the membership of any private sector plan will result in better pricing for those plans and, perhaps, bring to light a new pharmaceutical distribution model altogether.

Besides public efforts at reform, the private sector is seizing this opportunity to promote drug cost management. Many are looking closely at the prices of prescriptions and trying to find ways to direct plan members to opportunities for good outcomes at lower costs.  Some are capitalizing on public sector reforms and implementing those changes. Others are considering innovative and alternative distribution of prescription medicines. Some are encouraging cooperatives with other plans. Most are calling for better drug prices, exclusive listing agreements on their formularies and clinical programs for their plan members.

Private sector plans are encouraged to engage more in the public sector reform debate and become knowledgeable about public policy initiatives underway on the sustainability of public sector plans.

Plan sponsors and plan designers may embrace alternative delivery mechanisms, a simplified prescription process, better interaction with pharmacists, lower dispensing fees, lower prices for drugs and optimization of the dispensing practice (from monthly to every three months for chronic medication regimens) when they witness the actual savings they can realize.

This transparency will maximize drug benefit plan efficiency and promote better outcomes for private sector plan sponsors and holders. This, in turn, will create greater access, greater benefit and, most of all, sustainability going forward.


<1> CIHI research

<2>Ontario Ministry of Health research, 2009

<3>IMS Canada

<4>Mercer Canada Report, October 2008

<5>Bill 130, the National Assembly

<6>Ministry of Health, Province of Ontario

<7>IMS Canada research

<8>Province of British Columbia Health Ministry

<9 >Province of Alberta

<10>Sheridan Scott, commissioner of the Competition Bureau, 2008.

- Marc Kealey

Pharmacy and integrated Health

Sunday, June 20, 2010 @ 06:06 PM

The regulations reflecting the revisions to the Transparent Drug System for Patients Act in Ontario have been approved by the government of Ontario and are now posted.
The reaction by pharmacy organizations was predictable. They hate what the government has done and in so doing, they want to hold patients (especially seniors and the chronically ill – as they say) hostage in the process.

Not surprisingly the business sections of major daily newspapers have reacted by issuing a reduced strike price for publicly traded pharmacy organizations and in some cases have downgraded some organizations to a “hold” on their stocks.

In all, it’s a bad start for the retail pharmacy guys who could have come out of this exercise as the real champions in an integrated health care system, currently en vogue worldwide.

As a frequent speaker across Canada on drug reform, I’ve heard from large and small organizations seeking to wade through the confusion on drug benefit plans and formulary management issues with real answers. The Ontario government has stated that it wants transparency on all drug prices plain and simple. It has passed the legislation to do that and posted the regulations that reflect it. The fight is now over! Or at least it should be. What is pharmacy doing? It’s threatening to cut back on services that make patients better. Not good.

Concessions on the regulations governing the Drug Act in Ontario have been made by government and I like to think that some of us whose voice for the effective role of pharmacist in integrated health care was heard – the role of pharmacist has been made more effective. I only hope that pharmacy can see this and cut back on the vitriol.
We still have a lot of work to do to encourage government in Ontario to increase the cognitive service fee they offer to pharmacists and we can start today by encouraging other governments in Canada to realize the ROI on effective pharmacist services to patients.

- Marc Kealey

Major media outlets have covered the legislative process quite fairly over the past few months as the government of Ontario has moved to stabilize drug prices in Canada’s biggest province.  Nothing new here, the costs of public sector formularies have been increasing at anywhere between 5% to 15% annually.  When I was CEO of the Ontario Pharmacists’ Association, I implored the Board at the time to work with government and insisted that we play the Pharmacist as health care provider card when tackling the issues associated with the original reform brought in by the McGuinty Liberals in 2006.  The tack we took was to demonstrate the value of pharmacists and the work they do in community pharmacy, long term care pharmacy, specialty pharmacy and hospitals across the province.

The initial legislative framework (Bill 102) had taken draconian and, frankly, chaos inducing steps to transform the drug program in Ontario. The steps we took in 2006 to counter these moves proved fruitful and beneficial to pharmacy and pharmacists.  In fact, the initial financial impact of Bill 102 was some $680 million dollars out of pharmacy.  Our efforts at Ontario Pharmacists’ Association, at the time, was to appeal to the issue of fairness, integration in healthcare, a new reimbursement model and the use of collaborative efforts such as Information Technology to increase competition among pharmacies.  Our efforts paid off and instead of the initial $680 million dollar hit, we got back in programs and other concessions some $450 million dollars.  The unintended consequence of these efforts was the establishment of a two-tiered drug pricing regime that has taken hold across the country.   This means that private sector plans would pay more for the exact same drug and services as provided to public sector plan members (ODB for example).

In the ensuing years after Bill 102 was passed as the Transparent Drug System for Patients Act (TDSPA), the government has moved to integrate pharmacists into their health teams with minimal uptake from the pharmacy sector.   The Meds Check program which was announced coincidentally to the TDSPA was supposed to provide some $50 million dollars to pharmacists to provide extra service to patients on their drug regimens.  The program was initially a success, but pharmacy more or less blew it off in many parts of the province.  The Pharmacy Council, which was also announced in the TDSPA has now become a joke.

In the ensuing years since the TDSPA was made law, there have been charges laid against pharmacies, wholesalers and manufacturers for fudging required reporting to the Ontario Public Drug Program’s Executive Officer. The Canadian Association of Change Drug Stores (CACDS), which is the de-facto negotiating body for pharmacy, or the Ontario Pharmacists’ Association have barely attempted to licit potential models that could benefit patients and the customers they serve with ways to improve the  drug system. This  noted, quarter after quarter publicly traded pharmacy
organizations have seen average double digit profits  this in an era of economic austerity.

The trouble is that patients, plan members, formulary designers and public drug plan providers remained afflicted with cost increases. In the TDSPA there is a provision that the government will review the Act every 2 years.  Last summer (2009) the then Minister of Health in Ontario announced a review of the TDSPA.  Stakeholders were invited to provide their views on how to better the system.

Many stakeholders took the process seriously.  It was sad to see that pharmacy did not. When the government moved to enact legislation in 2010, it seemed to take pharmacy by surprise and they reacted with faux indignation. In fact, had they been more engaged , more attuned to the needs and wants of the patients and customers they purport to cherish, they world not have used them as pawns in this massive game of chess that they have lost so publicly.

The latest polls have suggested that Ontarians overwhelming (some 93%) support the government’s initiative. So enough bitching.  Here’s the deal  pharmacy should stop immediately their diatribes on how they will be forced to make very difficult choices “as they evaluate the level of care they provide to all patients, especially seniors and the chronically ill”.  It is sad to see that THIS rhetoric would be their response rather than engaging the public in a dialogue about an increase in cognitive services fees.

The government has announced some $100 million dollars in cognitive service fees with an additional amount for Meds Check and diabetes management.  In an era where medical models of treatment are becoming teams (like a Family Health Team) pharmacists can and should integrate themselves into these models.  This could prompt a call for an additional, say, $300 to $400 million in cognitive services fees.  Who’s leading these pharmacy organizations? They seem to have hit every stupid button and made asses of themselves throughout this whole process.  The sad reality here is that instead of looking to modernize an antiquated drug distribution process and embracing the trend of integrated healthcare, these pharmacy organization seem to think that the patients and consumers and shareholders they purport to care about are treated like lemmings and  will, unfortunately, continue to fight  to their own bitter end.

- Marc Kealey

Good read at

Friday, May 21, 2010 @ 07:05 AM

The current wave of prescription drug reform across Canada could result in a range of benefits for plan sponsors, but the process is still in its infancy and the outcome is far from clear.

According to a panel of experts, organizations that are proactive and ready to cut a deal will fare much better than those which choose to let the government set the rules for them.

A recent International Foundation of Employee Benefit Plans webinar entitled Law & Order: the case for drug reform in Canada featured Marc Kealey, president of ArcisRx and principal with Kealey & Associates, Inc, and Murray Gold, a partner Koskie Minsky LLP. They explained that as Canada tires of its dubious distinction of paying the highest prices in the world for generic drugs, provincial governments have taken—or will be taking—action to bring costs down.

Quebec, Ontario and Alberta have either proposed or tabled drug reform legislation and British Columbia and Atlantic Canada are expected to do so shortly. The benefits of such reforms—should they be passed—are enhanced affordability for plan sponsors, clinical expertise for drug plan re‐design and analytics, and an alternative distribution process to get medications to plan members with assurances of high levels of service and cost savings.

Read the rest –

- Marc Kealey

Pharmacists are Canada’s most accessible health professionals and play an important role in promoting, maintaining and improving the health of the communities they serve.   Health promotion is now firmly on Ontario’s healthcare agenda and there is both an opportunity and a need for community pharmacists to become more involved in delivering public health services.

Every day Ontario pharmacists work as advocates for health. They support self help. They are local and accessible and provide patients with important health advice.  Pharmacists promote health not just by advising on the proper use of medicine but also by counseling patients in areas such as diet, sexual health, and reducing tobacco and alcohol consumption.

Health spending is increasing at a rate far greater than other provincial government spending. As the population ages and the prevalence of chronic conditions increases the growth in new diagnoses for chronic conditions such as hypertension, diabetes, and arthritis actually exceeds Ontario’s population growth. The increase in diagnoses of chronic conditions is a key driver of health spending growth in Ontario.

As front-line health care providers, Ontario pharmacists are uniquely positioned to help the Ontario government achieve its objectives to improve health outcomes and control costs in our healthcare system. By helping patients comply with treatment regimens, by providing counseling on lifestyle changes, by helping to reduce the complications associated with chronic conditions and by ensuring symptoms are properly managed, Ontario pharmacists can make a big difference in improving the health of Ontarians.

Patient health management is a health care intervention that allows patients to be more involved in managing their own health outcomes. By engaging in patient health management both public and private health insurers can commit healthcare resources to keep people well and to manage diseases and conditions in a manner that avoids the costly complications associated with chronic conditions. Effective patient health management programs contain health costs by reducing the need for other more costly health care interventions. It also helps the elderly maintain independence and keeps our aging population as healthy as possible through prevention, early detection, and proper management of symptoms.

Physicians know what needs to be done to provide appropriate care consistent with clinical practice guidelines, but often lack the tools, the resources, or the time to do it. Pharmacy-based patient health management addresses this issue with significant health care delivery advantages. Involving patients in their own health management increases the patient’s sense of ownership and control (patient centered care). Patients are able to remain healthy, active & productive members of society for longer through greater disease control. There is increased compliance and adherence to treatment and, with improved patient health outcomes health care costs are contained.

In many jurisdictions pharmacists are recognized as key members of primary care teams. In the United Kingdom, the Department of Health recently launched a program for pharmaceutical public health by publishing Choosing Health Through Pharmacy. The U.K Minister of Health describes this as “a commitment to publish a strategy for pharmaceutical public health in 2005 which will expand the contribution that pharmacists, their staff and the premises in which they work can make to improving health and reducing health inequalities.” In North Carolina, the City of Asheville took a proactive approach to contain its rapidly rising employee health costs by instituting a pharmacy-driven patient health management program that was so successful in improving health outcomes and containing costs that it is now being replicated in major cities across the country

Community pharmacists in Ontario are ready, willing and able to increase their involvement and contribution to public health in collaboration with government, physicians and other health professionals.   Pharmacist-based patient health management can achieve better health outcomes. The results are healthier patients, and more cost-effective use of precious health care resources.

- Marc Kealey

Ontario pharmacists are ready for change.

Wednesday, March 10, 2010 @ 11:03 AM

Imagine your child has asthma and needs careful instruction on using an inhaler. Your aging parent needs guidance managing multiple medications. You are a diabetic seeking advice on drugs or medical devices, or a smoker ready to adopt a cessation program.

Now imagine those services available, easily and conveniently, from a familiar health care provider right in your neighbourhood – a trusted professional you already see dozens of time a year.

Ready? It’s your pharmacist.

A breakthrough new role for the pharmacist in health care delivery is one of the transformative changes to Ontario’s drug system introduced recently by the McGuinty government, targeted to take effect this fall. It’s the initiative that stands to touch the lives of more Ontarians most often – and the one with the greatest promise to improve the efficiency of health care delivery, lessen primary care costs and reduce wait times.

Pharmacists stand ready to work with the government and take on their new role. But while the province’s plan to pay pharmacists for providing direct patient care services is laudable, other changes proposed in the Transparent Drug System for Patients Act could threaten the sustainability of community pharmacy. Pharmacists are prepared to counsel patients – but if the viability of their pharmacy businesses is undercut by other measures, they could be doing so on the province’s street corners.

Keying on pharmacists as appropriate providers of front-line health care is a wise move by the government. It’s built not only on the training, skills and capacities of the profession, but on public understanding, acceptance and demand.

Just over a year ago, a Decima survey showed Ontarians overwhelming trust their pharmacists, understand the importance of consulting them with questions about prescription and over-the-counter medications, appreciate the pharmacists’ role in ensuring patients take medication properly and avoid drug interactions, and recognize that pharmacists’ expertise assists them to avoid illness or hospitalization.

Across Ontario, pharmacists continue to earn and strengthen that trust and understanding. Every day, 10,000 pharmacists have 1.6 million interactions with patients in the province’s community pharmacies, hospitals, long-term care facilities, and clinics.

The pharmacist-patient relationship is ubiquitous and powerful. The value of this crucial piece in health care delivery is at last being recognized – and strategically leveraged by the province as it asks pharmacists to do more by providing professional services that go well beyond dispensing.

When a patient consults with a pharmacist – acting on the knowledge that an issue or question about managing a chronic disease, taking multiple medications without harmful interactions, or adhering to a prescribed drug program can be handled efficiently, authoritatively and professionally by that health care provider – pressures on many other points in the health care system can be eased. A patient whose needs are met by a pharmacist is one less person in a physician’s waiting room, a crowded emergency ward or a high-demand clinic.

Equally important, the province promises to institute long-awaited new opportunities for pharmacists to be integrated into primary care models such as Family Health Teams. Working more closely and with greater connectedness with other health care providers will bring pharmacists closer to patients, streamline and localize the delivery of services, and minimize delays and duplication.

To enable pharmacists to provide these professional services, the province will provide compensation to them. It has agreed to set up a new Pharmacy Council to permit appropriate fees to be negotiated. Pharmacists will seek a fee schedule that fairly reflects the value of the services they provide, and the savings their work brings to the province’s health care costs.

In addition, the province proposes to increase the dispensing fee paid to pharmacists for filling prescriptions. An increase of $4 is suggested – a level that reflects today’s costs of distributing and dispensing drugs.

But in spite of these positive steps toward compensating pharmacists for their valuable work, other changes in the province’s new drug scheme represent potential threats to the well-being of community pharmacy. In particular, ending the payment of rebates and incentives to pharmacists by generic drug companies may not be counterbalanced by the new sources of income.

To date, the province has been vague in detailing the financial impact of all its changes on the sustainability of pharmacy enterprises. This has sparked concerns among some pharmacists that when all the new changes are taken into account, their business models will no longer be workable. For some pharmacies – especially in rural and remote communities where the pharmacist may be the only health care provider – staying in business may not be an option.

The image looms large of a pharmacist, ready to make a much-needed contribution to the transformation of health care in Ontario, ready to counsel appreciative patients, but unable to financially support the pharmacy enterprise within which these services can best be provided.

Ontario pharmacists are ready for change. They look forward to working with the government to bring it forward successfully. Addressing their concerns about the sustainability of pharmacy is the key to making it happen, for the benefit of pharmacists, patients and the health care system we all value.

- Marc Kealey