Secret rebates amount to a tax on patients

I usually don't post many opinion pieces, but I thought this one was interesting and worthy of debate. Any comments?

From the Victoria Times Colonist:
The government of British Columbia, in an attempt to save money on its drug purchases, has recently introduced a sole-sourcing strategy in which it receives secret rebates. This strategy is in effect a hidden tax on consumers of those medicines.

The first product for which the government has used this secret-rebate strategy is olanzapine, which is prescribed for various mental disorders including schizophrenia.

Although olanzapine is generically available everywhere else in Canada, the province has struck a deal with Lilly, the manufacturer of the branded version Zyprexa, to make it the only version of olanzapine available in B.C. under PharmaCare. (Virtually everyone in B.C. is a member of PharmaCare, which offers some insurance for drugs, depending on income, age, and total drug expenditure.) ...more

Canadians getting fleeced on generic drugs: report

From the Vancouver Sun:
Canadians are getting gouged more than ever on generic prescription drugs, a study by the Fraser Institute reported Monday.

The report's author called for reforms that would see consumers shopping around for the best drug prices.

The conservative think-tank found Canadian prices for generic - non-brand name, off-patent - medications are an average of 112 per cent higher than those in the U.S. In 2003, the Fraser Institute found prices here were 78 per cent higher than in the U.S.

At the same time, Canadian prices on brand-name drugs are an average of 53 per cent lower than American prices, a result of federal caps on drug costs.

The Fraser Institute report compared Canadian and American retail prices for a few hundred commonly prescribed drugs, half brand-name and the other half generics. ...more

Provinces angry over drug rules

From the Globe and Mail:
Provinces are lashing back at proposed federal regulations that would extend the patent life of a number of popular medications and postpone the introduction of generic copies, a move that could cost drug plans hundreds of millions of dollars.

"Generic drugs here play an important role in the sustainability of the provincial plan, so delays in accessing those generic drugs will have a direct cost impact on the provincial drug plan and also [on] patients who pay for their own drugs," said Johanne Leblanc, a spokeswoman for the New Brunswick government.

New Brunswick has written to the federal government to express its concerns and to urge further consultation, she said.

The federal government has not released a list of which drugs will be affected. But the Canadian Generic Pharmaceutical Association, which represents the country's generic drug manufacturers, has said it could include such popular medications as Viagra, the cholesterol drug Lipitor, the blood-pressure medication Norvasc and the arthritis treatment Celebrex.

New Brunswick's provincial drug program spent almost $14.5-million last year on Lipitor, Norvasc and Celebrex alone, said Ms. Leblanc. ...more

Generic drug prices inflated, committee reports

From the Vancouver Sun:
Inflated prices on generic prescription drugs mean B.C.'s Pharmacare program and drug consumers are paying hundreds of millions of dollars more for medications than they should be each year, says former auditor-general George Morfitt, a member of a committee asked by the provincial government to identify drug funding and approval reforms.

Recommendations of The Report of the Pharmaceutical Task Force were made public Wednesday.

"Canadian prices [on non-brand name, off-patent drugs] are about 40 per cent too high compared [with] other countries," Morfitt said in an interview, referring to the fact that pharmacies receive a 30- to 40-per-cent rebate on bulk purchases of drugs from manufacturers.

However, they don't bother passing on those savings to consumers and Pharmacare.

"Pharmacare is paying artificially high prices," Morfitt said after the

Health Minister George Abbott said the government accepts all the recommendations of the task force and agrees that while British Columbians spend more than $1 billion annually on pharmaceutical products, there are clearly cost savings which have yet to be attained. ...more

Faster, cheaper, better: B.C. health minister promises pharmaceutical overhaul

From the Vancouver Sun:
The provincial government is promising faster drug-approval times and better access to cheaper generic drugs at the pharmacy counter once the recommendations of the Pharmaceutical task force become reality.

Health Minister George Abbott said British Columbians spend, on average, about $1 billion annually on pharmaceuticals.

"Are we getting the best deal? I think not. I think that it's pretty clear particularly in the area of the generics, that we are not getting a good deal," he said in an interview.

Abbott made the comments following an announcement Wednesday that the government would be accepting all the recommendations put forward by the Pharmaceutical task force. ...more

Drop patent regulations, generic drug makers urge

From the Globe and Mail:
Canada's generic drug companies are urging Parliament to abandon proposed regulations that would delay their ability to reproduce some of the most popular name-brand drugs that are currently on the market, including Viagra and Lipitor.

Jim Keon, the president of the Canadian Generic Pharmaceutical Association, said his organization is considering taking the government to court to reverse the regulations that he says will cost Canadians hundreds of millions of dollars every year.

The changes to Canada's drug patent regime appeared in the Canada Gazette, the formal record of government notices, two weeks ago.

Under the new rules, patents that have been removed from drugs that were on the market prior to June 17, 2006, could be reinstated. ...more

Generics slam proposed drug patent rules

From the National Post:
New patent rules just proposed by the federal government would delay generic versions of Lipitor, Viagra and several other blockbuster drugs by as much as two years, costing consumers and taxpayers tens of millions of dollars annually, generic companies are warning.

The government says the regulations would simply restore fairness and stability to the brand-name industry after two court rulings put unexpected new curbs on the practice of "evergreening" -- filing new patents on a drug in an attempt to stave off generic competition.

Generic firms, which stand to lose business as a result of the suggested amendments, call the move an unjustified sop to the brand-name manufacturer. ...more

Pfizer Wins Canadian Order Blocking Generic Version of Lipitor

From Bloomberg:
Pfizer Inc., the world's biggest drugmaker, won a Canadian appeals court ruling blocking regulatory approval of Ranbaxy Laboratories Ltd.'s generic version of the cholesterol pill Lipitor.

Canada's Federal Court of Appeal yesterday reversed a lower-court ruling that Ranbaxy could seek approval for its competing version of Lipitor before Pfizer's patent expires in 2010, Pfizer spokeswoman Vanessa Aristide said in a phone interview.

Ranbaxy, India's largest drugmaker, also challenged Lipitor patents in the Netherlands. Pfizer said in February it would appeal a Dutch ruling invalidating one of its patents covering Lipitor, the world's best-selling medicine with ales of $12.7 billion last year. Ranbaxy can appeal yesterday's ruling to Canada's Supreme Court. The order doesn't apply to litigation in other countries, including the U.S., Aristide said. ...more

Pharmacare to cover 120 more generic drugs

From the Winnipeg Free Press:
The Manitoba government will add 120 new generic drugs to be covered under Manitoba's Pharmacare Program , Health Minister Theresa Oswald said Thursday.

The decision, effective March 19, means the province will save about $4 million a year as these generic drugs will replace more costly prescription medication. The province already covers more than 1,950 drugs under the Pharmacare system. For a complete list of approved drugs go to www.gov.mb.ca/health/mdbif/.

Pharmacare assists patients with the cost of prescription drugs by covering all bills for them after an income-based deductible.

In a release Oswald said the generic drug cost savings are substantial. For example, generic blood pressure medication Ramipril costs about half as much as prescription drug Altace; Altace costs about $33.60 a month while Ramipril only $19.95.

Tory health critic Kelvin Goertzen said the province could save even more money be creating a speedier approval process for generic drugs -- drugs already approved by Health Canada. ...more

Jean Coutu breaks into generic drug manufacturing

From the Globe and Mail:
In a departure from its core business, drugstore chain Jean Coutu Group (PJC) Inc. is diversifying into the manufacturing of generic drugs.

Longueuil, Que.-based Jean Coutu said yesterday it has acquired Pro-Doc Ltée., a small generic drug maker based in Laval, Que. Terms of the deal were not disclosed.

Jean Coutu made the announcement on the same day it learned its stake in U.S. drugstore giant Rite Aid Corp. took a $325-million (U.S.) hit.

"This is a new activity for us. It follows on our having sold our U.S. operations and repaying most of our debt and seeking new growth opportunities," said André Belzile, Jean Coutu's senior vice-president of finance and corporate affairs.

"It's embryonic. We want to learn. We'll see where it takes us," Mr. Belzile said in an interview. ...more

Pharmacists hold key to cheaper drugs

There is so many inaccuracies in this article it's ridiculous. I'm going to break it down, but before I go any farther, I have one question. If pharmacists are to blame for high drug prices, why didn't the reporter actually talk to a pharmacist to get their responses to the physician's totally baseless claims?

But Dempsey said the doctors don't normally know drug costs.

"We don't actually get any information about drug prices," the Belleville pediatrician said.

"There's no mechanism to educate doctors about costs of drugs."

Well, physicians could ask the question of price to the local pharmacist and/or the drug rep of a product. In some provinces, pharmacy organizations publish easy to use charts with commonly used drug prices on them.

For example, he said, some drugs require the brand name to be taken only once a day, whereas the generic must be taken two or three times in the same period to achieve the same effect.

Generics are copies of brand name products. They're the same -- including frequency of dosing. Sure, a brand name company may come out with an extended release product to counteract the effect of the generic entering the market, but this article makes it sound like generics don't have the same duration of action, which is totally wrong.

Doctors will often write the name of a well-known drug in a prescription. Zantac, a drug for heartburn, is recognized by most people, Dempsey said.

But if a physician wrote the generic brand, Ranitidine, that person might call back to the doctor's office and ask if a mistake had been made, he said.

It is then up to the pharmacist to substitute the generic for Zantac if the doctor did not tick the no-substitution box, Dempsey said.

I'm supposed to believe that the patient would question the written Rx if it was written for ranitidine instead of Zantac. That's highly unlikely. And the MD makes it sound like pharmacists don't make the generic substitution when available. In Canada, it's almost always done.

Here's the complete article:

From the Belleville (Ont.) Intelligencer:
There are mechanisms in place that could help save Canadians money on prescription drugs, says a local physician.

Dr. Paul Dempsey, head of the 268-doctor Professional Staff Association at Quinte Health Care, said oft-times pharmacies can substitute a cheaper generic replacement, even if the name brand drug is specified in the prescription.

"On a prescription pad there's a box to check off for no substitutions," he said.

If that box is not ticked, pharmacies can fill the order with the cheaper generic drug, Dempsey said.

A recently-released study commissioned for Industry Canada found that Canadian physicians are generally oblivious to drug prices and often prescribe an expensive pharmaceutical when a cheap one would do the job. ...more

Pharmacy rebates should make generics cheaper for patients: Competition Bureau

From the Canadian Press:
Many generic drug companies compete for space on pharmacists' shelves by offering rebates to the retailers - but those benefits are not finding their way into consumers' wallets in the form of lower prices, a study by the Competition Bureau has found.

The study by the independent agency found that rebates average about 40 per cent of the price the pharmacy is charged on paper for various generic drugs.

"Rebates provide incentives for pharmacies to select a particular manufacturer's product," bureau commissioner Sheridan Scott said Monday in releasing the study results.

Scott said that public sources of information and interviews conducted as part of the study show prices actually paid by pharmacies in most provinces were "on average at least 40 per cent below what the pharmacy was invoiced." ...more

Alberta revisits drug funding

It's no surprise that the generic/rebate debate is spreading across the country. It looks like Alberta is going to be moving on it soon. Since Alberta has seen value in pharmacy services and has been open to pharmacist prescribing, perhaps they will be a bit more friendly to pharmacists compared to what has happened in Ontario.

From the Calgary Herald:
On a May day in 2006, as Ontario Health Minister George Smitherman spoke to a luncheon crowd at Toronto's National Club about his plan to cut drug spending, opposition to the proposal raged outside.

Pharmacists, wearing their white lab coats, protested at the club while Smitherman gave his speech.

They said the plan would deal a serious blow to their business -- forcing them to lay off staff -- because it banned pharmaceutical firms from paying pharmacies lucrative "rebates" to carry their products. ...more

Consumers miss out on generic-drug savings

This is from a few days ago, but since I haven't been updating the site quite as regularly as I should be, I didn't post anything about the growing controversy about generic drug prices. I have a feeling that this issue isn't going to go away.

From the Montreal Gazette:
A federal investigation into why Canada's generic drugs cost so much more than those in other countries has concluded there is plenty of competition between generic manufacturers - but patients, taxpayers and insurers are not benefitting from the resulting price war.

A burgeoning number of generic companies vying for space on drugstore shelves gives pharmacies rebates of up to 80 per cent off the wholesale price, the Competition Bureau says in a draft report obtained by the National Post. Those discounts, however, are not passed on by the retailers to governments or consumers, the agency says.

Tony Clement, federal minister of health, suggested last week that a few generic-drug companies have formed a virtual oligopoly that keeps prices inflated. ...more

Generic drug prices skyrocketing in Canada: study

From Reuters:
Canadian government policies have driven up prices of generic prescription drugs so dramatically that they are more expensive than their U.S. counterparts, a study showed on Tuesday.

Prices of generic prescription drugs in Canada were, on average, 115 percent higher than U.S. prices, a study by Canada's Fraser Institute showed. However, Canadian brand-name prescription drugs were about 51 percent cheaper than those in the U.S.

"Canadians pay more for generic drugs because government policies shield generic drug companies and pharmacy retailers from normal market forces that would naturally reduce prices," the study said. ...more