News

Generic drug reimbursement cuts draw anger, controversy in Canada

BY Jim Frederick

When does the double-edged sword of generic drug price reductions begin to cut the government agency or health system holding the sword?

That’s the question many pharmacy leaders in Canada have for the provincial health system policy-makers who have embarked on a crusade to whack pharmacy reimbursement levels for many lower-cost generic medicines sold under the nation’s publicly funded health system. The effort has drawn the ire of pharmacy advocates even as proponents in government and health policy circles tout its cost-saving benefits.

"Retail or reimbursed prices of generic prescription drugs have been dramatically reduced across Canada over the past few years," said Jim Keon, president of the Canadian Generic Pharmaceutical Association.

The campaign is nationwide and unrelenting. Ontario, British Columbia and Quebec opted to cut generic prescription payments to 25% of the branded equivalent price, beginning April 1; British Columbia legislators pegged another reduction, to 20% of the brand-name cost, to take effect in April 2014. Last June, New Brunswick reduced generic prices to 40% of the branded price, and followed up with another reduction, to 35%, in December 2012.

The province of Alberta went further, adopting a sweeping, across-the-board reduction in generic drug reimbursements with its 2013 budget that slashed payments for generics from 35% to 18% of branded-drug prices beginning May 1 of this year. The Alberta Pharmacists’ Association expressed "shock" at the cuts, particularly in light of the fact that generics were reimbursed at 75% of branded-drug prices as recently as two years ago.

Canada’s generic industry group was incensed. "The massive and indiscriminate cuts to reimbursed prices of generic pharmaceutical products announced by the government of Alberta 7#8230; are wholly unacceptable to Canada’s generic pharmaceutical manufacturers and risk patient access to high-quality, affordable prescription medicines," asserted CGPA’s Keon. "These across-the-board cuts represent a betrayal of our industry and were announced without consultation or prior notice to generic pharmaceutical manufacturers, community pharmacy or other key stakeholders in the pharmaceutical supply chain."

The most recent moves followed a controversial, nationwide cut in reimbursements for six generic medicines by the so-called Council of the Federation’s Health Care Innovation Working Group, comprised of provincial and territorial representatives seeking ways to save on health costs. The cuts, which took effect April 1, 2013, pared the price of six widely used medicines to 18% of the brand-name equivalent across nine provinces — only Quebec isn’t participating — and all three territories.

Pharmacy and generic-industry interest groups are crying foul, saying the cost-cutting crusade is a short-sighted scramble to save scarce public health dollars that will ultimately lead to higher overall costs by reducing incentives to dispense lower-priced generics. "This is a shaking of the foundations of the profession, with rapid changes in revenue and expense models that have been formed over the last 30 years," said Dawn Martin, executive director of the Pharmacists’ Association of Saskatchewan.

According to a report in the Toronto Globe and Mail, "The spending cuts could trickle down the complex funding model for pharmacists in Canada, cutting into pharmacies’ bottom lines by reducing drug company profit margins and therefore, subsidies those companies give to pharmacies." The six generics on the chopping block — which treat heart disease, gastrointestinal ailments, depression and other conditions — account for roughly one-fifth of all public spending on generics in Canada, according to the report, spawning hopes by provincial health officials that the cuts could eventually save a combined 100 million Canadian dollars a year.

When those cuts were announced in January, the Canadian Pharmacists Association expressed dismay that the council made no commitment "to invest some of the predicted savings into improved health care for Canadians."

"We were disappointed that no government other than the government of Saskatchewan committed to reinvest any portion of the savings from the lower prices into expanded pharmacy services," said Jeff Morrison, director of government relations and public affairs for the national pharmacy group. "Our position had always been that any system of reduced generic pricing should address enhancements to patient care."

Despite the controversy, however, the issue is far from cut-and-dry. Canadians pay more for generics than most of the rest of the world, and me-too medicines account for an estimated 65% of Canada’s prescription market, compared with 84% in the United States. In an interview with the Globe and Mail, Michael Law, a University of British Columbia professor with UBC’s Centre for Health Services and Policy Research, said the nation’s "archaic buying system" led Canada to pay far more for generics than many other countries.

"We’d developed a system where we were systematically overpaying for generic drugs," Law said.

Pharmacy retailers in Canada are sympathetic to their customers’ confusion over drug pricing — and in particular, over the provincial governments’ increasing pressure on generic drug prices. Pharmacy providers also are eager to position themselves as consumer allies on the issue.

"Drug pricing is an issue that raises many questions among customers — and rightly so," Quebec-based drug store operator Uniprix tells consumers on its website. "The different drug plans that exist in Quebec [i.e., private and public] and the various conditions that apply in each case, combined with the competitive nature of the free market, means that drug prices can vary from one pharmacy to another or even from one month to the next."

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

News

Sales of false lashes continue to look up

BY Antoinette Alexander

Oh, how the eyes still have it — eyelashes to be precise. Sales of false lashes continue to enjoy double-digit growth, as evidenced by the most recent data provided by IRI. Sales of false eyelashes and adhesives rose 11.4% to about $84.8 million for the 52 weeks ended April 21 at total U.S. multi-outlets.

Helping to fuel the popularity of false lashes are celebrities like pop star Katy Perry. In fact, the U.K. brand Eylure teamed up with Perry to launch in the United States a line of false lashes, and during the 52 weeks ended April 21, they generated sales of more than $1.2 million, according to IRI.

Clearly, false lashes have proven they are no longer just for Halloween; however, many would agree that the unorganized and often confusing lash wall at retail leaves much to be desired. Those retailers that embrace a revamped display that helps educate the consumer and simplifies the selection of false lashes are bound to benefit.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

News

Affordability, benefits give lotions a leg up

BY Antoinette Alexander

A slightly improving economy, a growing consumer base and new formulations that offer value-added benefits are likely helping to fuel sales of hand and body products.

"Inspiring further growth in the category will require enhanced product innovation. This could come from emphasizing product efficacy, increasing a focus on men’s products, as well as through positioning offerings that encourage consumers to purchase products for specific uses," Mintel Group stated in its 2012 report on U.S. body care. "Mainstream brands should find that the time is ripe for promotion of functional product benefits, such as those related to anti-aging. Above all, in the short term, keeping prices at affordable/accessible levels will be key to resonating with consumers."

According to data provided by IRI, sales of hand and body lotion rose more than 5% to about $1.74 billion for the 52 weeks ended April 21 at total U.S. multi-outlets.

The category is dominated by female users and, according to Mintel’s custom consumer research, 97% of women use hand lotion and 96% use body lotion, compared with 80% and 66% among men, respectively. What is important to note is that the female population is set to grow by 4.9% by 2016, according to Mintel, citing U.S. Census Bureau data, with the largest gains among older women.

"Manufacturers and marketers of body care products will need to keep these population trends in mind in years to come. Older women should be well represented in product ads, and product manufacturers should be sure to formulate offerings that cater to the specific needs of these consumers, including anti-aging creams and blemish balms that help tone down the appearance of age spots," Mintel stated.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES