CICPO Members Speak Out - Change is Coming

Independent Pharmacy owners raise concerns

Published on April 10, 2012  Gulf News

Corinna Yates  

"So disgusted."


Those are the words from Cindy Goudie, owner operator of The Medicine Cabinet in Port aux Basques.

As a small business owner, Ms. Goudie is concerned that the passing of bill 12 will eventually lead to financial difficulty for her and other independent pharmacy owners.

The bill, titled An Act to Amend The Pharmaceutical Services Act, will provide residents of this province with lower cost generic prescription drugs.

Health Minister Susan Sullivan held a news conference in St. John's on March 26. The new system for generic drugs will be phased in starting April 1.

The new regulations would mandate that all generic drugs be sold at 35 per cent of the cost of their corresponding brand drug.

Currently, generic drugs average about 60 percent of brand prices. The reduction would be phased in over the next year.

The government is saying that seniors are not going to be affected. However the Newfoundland government does not cover dispensing fees for seniors. So if the fees go up seniors will be paying more for their prescriptions, according to Ms. Goudie.

The provincial government is planning on saving more than $30 million on generic drug cost with this new pricing policy.

"There is no way that the government can move in, take the revenue out of your business and expect you to survive," said Ms. Goudie. "When there is revenue lost, we have to find a way to replace it."
The Medicine Cabinet has no storefront like some big pharmacies do. They just have a dispensary. They have nothing to fall back on in order to increase their revenue.

"What happens when the government comes in and starts saying we are going to make adjustments to generic drug pricing," she said. " A lot of the times this is how we keep our business open."
According to Ms. Goudie this will certainly impact her revenue.

"I think over all, you are going to see pharmacies having to increase their dispensing fees," she said. "This in turn will have an effect on seniors, on everyone."

The Council of Independent Pharmacy Owners (CICPO) had a meeting last week on how they are going to approach this.

"Susan Sullivan has shown us nothing," she Ms. Goudie. "Ms. Sullivan is saying there will be money re-invested back into pharmacies but gave no definite answer as to when this would happen."
Members of CICPO are hoping that government will talk to them.

According to Robert Doyle, spokesman for CICPO, independent pharmacies rely on rebate payments from generic drug manufactures in exchange for stocking their shelves.

"The members of CICPO worry that those payments will evaporate as the manufactures are squeezed," he said.

Both the Liberals and the NDP said they have concerns about the independent pharmacies, and they worry about the effect the new system could have on senior citizens.

Yvonne Jones, Liberal house leader, said she will be proposing amendments to the bill.

According to Ms. Jones, many seniors don't pay for drugs because they are covered by the provincial drug plan, but they do have to pay pharmacists' dispensing fees.
"If the government decides to increase regulated dispensing fees to help out independent pharmacist, it could lead to low-income seniors paying more for drugs," she said
.
According to Susan Sullivan seniors will not have to pay more for their drugs.

Craig Walters manages his parents' pharmacies in both Burgeo and the Codroy Valley. He has the same concerns as other independent pharmacy owners.

"I could be looking at 40 per cent loss in revenue from our professional fees," he said. "That money is used to run our business, pay our staff and keep inventory in stock."
According to Mr. Walters, 40 per cent of his sales come from prescriptions.

"The problem is they are changing generic pricing and telling us they are going to take care of the small independent pharmacies, yet they are not telling us how or what they are going to do," he said.
According to Mr. Walters, people in rural communities depend on their pharmacies for not only prescriptions but other things as well.

"In Burgeo we are the only pharmacy and if we were to close down people would have to travel two and a half hours to the nearest pharmacy," he said. "We give out counselling to our customers on different topics such as over the counter prescriptions or how to read their blood sugar meters."
They also provide other free services like faxing doctor's forms.

"Now customers may have to start paying for those services because we may not be able to continue to do that for free," he said.

Bad Prescription for the People

The Government gets its Way and YOU PAY

Outside of the spectacle most PC MHA's displayed in the House of Assembly last week - regarding the change in generic drug pricing - we have a much more serious problem.

That session of comedy revealed an underlying weakness in our political leadership.

I will let the reader decide if stupidity, corruption, indifference, or vindictiveness is the cause.

First let's agree on a few things.

The following are the essentials of life for people in our province:

1. Food
2. Shelter/Housing
3. Energy
4. Transportation
5. Health Care - including Prescription Medications

Today we will deal with number 1.

The price of food is of primary concern to the vulnerable people of our society. Individuals and families living on fixed low incomes are challenged every day to eat - let alone eat healthy.

Every week when one shops at the supermarket one notices the increase in the price of food. 

Food prices rose 4.1% on a year-over-year basis in February, following a 4.2% increase in January.

What is the response of the Government of Newfoundland and Labrador? Nothing! They rely on provincial food banks to hold people over from week to week.

Supermarkets receive rebates for purchases and particular shelf space so there is money in the system to reduce the price of food.

Considering that government (taxpayers) help low to no income people and families through income assistance - in part to buy food - then one would think government would direct food manufacturers to lower the price of generic food. Example - a tin of Carnation milk (brand) compared to a tin of Our Compliments milk (generic). Price of Carnation milk $1.50 and Price of Our Compliments $1.25. Therefore the generic tin milk is priced at 83% of brand. So if the Government of Newfoundland and Labrador lowered the price to 45% of brand then the generic tin of milk would cost 68 cents. Now we're talking.

Then if Dunderdale continued on and lowered the generic milk price to 35% of brand then the price would be 53 cents a tin.

Now if a person or child does not react well to the generic milk and finds that Carnation is the only one they can consume then a special authorization would be needed from government so that they can get enough money to pay for Carnation milk.

While the special authorization is approved - Mr. Sobey could give the customer the milk until the person is approved in 4 weeks. In either case Mr. Sobey would have to wait a week to be paid for the generic milk.

The question is will Tom Marshall, Kathy Dunderdale, and Susan Sullivan ask Mr. Sobey to sharpen his pencil?

For those of you not on any form of income assistance - your price would be lowered too. The Government of Newfoundland and Labrador when regulating prices - apply that price reduction to all citizens.

Do you think the supermarkets can afford to lower their prices?

For many medical conditions - a proper and healthy diet is essential. If the person is a diabetic - incorrect food choices could mean the difference between $1500 dollars worth of drugs a year and $15,000 dollars to keep the disease in check - including otherwise unnecessary stays in the hospital or by a worsening of the disease.

So the biggest problem in Newfoundland and Labrador today is the small independent pharmacy - the same people who day after day ensure people do not go without medications? The pharmacies that have a rotating credit for customers at about $20,000 per pharmacy - the pharmacies that are there whenever they are needed. The pharmacies who have provided free essential services to the people under their care.

Meanwhile the price of generic drugs are going down through competition and are reducing the price of drugs government pays for by replacing brands.

I watched a group of MHA's who were elected to represent people - stand up an speak about something they knew nothing about. The ignorance was incredible. Unfortunately - this means the decisions made are not going to bring the stated desired result.

The government chose this time not to listen to Dr. Wade Locke or the people who are experts in pharmacy services. This time they listened to unknown sources of information but were lobbied by brand companies.

Make no mistake - the money - if any - saved on the generic price changes will be gobbled up by oil and gas giants, mass retail and grocer corporations, and brand drug houses.

Make sure you have the number for your MHA handy as changes occur. It is he or she that has caused the problem.

Changing the face of pharmacy - is not the prescription you need.

Government Ignores Reality - will cost Seniors and Families

News Release

New Pricing Scheme Threatens Rural and Inner-city Services

For immediate release, St. John’s – 26/03/2012

Minister of Health Susan Sullivan is demonstrating a dangerous level of ignorance as she adopts a health policy that will irreparably harm front-line health care delivery in rural communities and inner-city neighbourhoods. 

The changes proposed to the generic pricing model to keep up with other provinces in Canada ignore the social demographics, geography and specific needs of Newfoundland and Labrador.

The Council’s spokesperson, Robert Doyle says, “Do we want Newfoundland and Labrador to spend more - per-capita - on generic drugs? No! But will the Dunderdale government achieve lowering the costs by simply copying the models of other provinces? No!” 

Here's why:

1. Our population is aging more quickly and therefore there is a greater requirement for chronic disease medications. 

2. The prevalence of conditions such as diabetes is higher in our province.

3. The lack of medication and disease management programs involving community pharmacy. 

Doyle adds, “The Government of Newfoundland and Labrador will not lower health care costs they will grow them. The Government of Newfoundland and Labrador will lose any ability to provide medication and disease management programs in rural areas and in the inner-city. The Government of Newfoundland and Labrador will lose informal collaborative medication and disease management currently taking place in independent pharmacies.” 

The Council believes this is not an issue of escalating drug prices – as the prices are going down every year as more generics enter the marketplace and through natural competition among generic manufacturers. This is an issue of poor policy review, research, and planning.

The government tried to buy the silence of pharmacies by signing a non-binding amending agreement with the Pharmacists’ Association of Newfoundland and Labrador. It does nothing for the viability of independent pharmacy and is an insult to local small business. 

“The Minister either does not understand or refuses to see the inherent problems in the government’s plan. The government does not have the information it needs to make this decision and it will result in unintended consequences”, Doyle says. 

Government says it will save tens of millions of dollars from a generic drug price reduction – that is not the case.  While generic drugs are being used in the majority of prescriptions filled they make up less than 40% of costs to the program. 

Doyle states, “If government wants to make a real difference in current costs and sustain costs in the future they must look at increasing generic utilization and developing – with pharmacy – a real medication and disease management program.” 

The Council is holding a meeting of its members within the next week and decisions regarding the next course of action will be discussed and ratified at that time.

The first decision has already been made – the Council will engage Dr. Wade Locke to do a thorough analysis of the situation and to develop a made in Newfoundland and Labrador solution.

-30-

Additional Information

The CICPO represents the majority of independent pharmacies in Newfoundland and Labrador.

The CICPO members are located throughout Newfoundland and Labrador and are the only model of pharmacy available in dozens of regions.

Independent pharmacies average 10% front-store sales (other than prescription medications) and 90% back-store (prescription medications) in its sales mix.

Chain drugstores and mass retailers; Shopper’s Drug Mart, Lawton’s/Sobeys, Walmart, Zellers, Costco, and Loblaws range from a 50/50 sales mix with many averaging over 90% in front store sales.

The changes to the generic pricing policy will severely affect independent pharmacies while the chain drugstores and mass retailers gain opportunities to consolidate the marketplace.

Chain drugstores and mass retailers have buffers from revenue loss such as:

a)      In-house wholesale

b)      Front shop sales

c)       Private label generic drugs

d)      Mass purchasing power

This gives the chains and mass retailers a governmental regulated advantage over Newfoundland and Labrador pharmacies.

Government’s negotiation with PANL does not bind corporations and therefore may result in a rejection of the government drug card.

Private Insurance companies negotiate directly with business which is contrary to the position of the Government of Newfoundland and Labrador – which negotiates with a professional body that has no corporate authority to negotiate.

Generic drug prices have been reduced over the past five years from 70 per cent of brand to 50 per cent of brand through natural competition. Generic drug prices are going down every year. It is the only area of reduced costs in the Health system.

The Government of Newfoundland and Labrador has not completed a review on the potential unintended consequences of this policy and does not have any information that rural and inner-city independent pharmacies can survive this cut to revenues.

Economist Dr. Wade Locke believes that a complete study should be undertaken before this policy is adopted – including developing an optimum model for Newfoundland and Labrador considering – demographics, geography, services, and pricing.

Independent Pharmacy Identifies More Savings for Government

How about $800,000 a month? Next Up Crestor - Where's the Minister?

It is now widely believed that the generic version of Crestor (another cholesterol drug) will be available for the market by April 2012. Great for the health care budget.

Crestor was the the most costly drug in Canada last year coming it at $875,000,000.

Newfoundland and Labrador's portion of this was over $19 million.

When the generic is released it will cost approximately half of this amount or over $800,000 a month savings.

If we continue down the same path used for introducing new generics - we will waste over 3 million dollars.

Just imagine the savings.

Now this is a heads-up to the Minister of Health, the Minister of Finance, and the government.

Will they now deal with this problem?

Will the media or Opposition parties ask the questions?

CICPO sounds Alarm on wasted $$ in Health Care

More $$$$ lost from Health Care - Secret Committee

Another half million dollars down the tube as Newfoundland and Labrador takes 40 days longer to list new generic.

In this case Lipitor - a brand drug to help control cholesterol - came off patent protection in May 2010 - and should have been on our formulary by July 1 of 2010. Atorvastatin the generic version did not make our formulary until August 11 2010. This 41 day delay cost us close to half a million dollars.

More interesting in this case - it may very well have been delayed until December of 2010 - if the Council of Independent Community Pharmacy Owners did not directly advise the Department of Finance of this problem.

That would have cost close to 2 million dollars.

Since that time the situation has not been corrected and we continue to lose millions of dollars.

This is the second example of wastage.

Where are the questions?

Where is the media?

These numbers can be independently verified.

Why are drugs available in our hospitals but not available at the retail pharmacy?

Here is another half million for surgeries to remove excess skin or quicker MRI's. 

Complete Investigation needed on Drug Costs

Will Dunderdale, Ball, or Michael investigate? $$$$ LOST!

We have now entered a time-frame industry people like to call the Patent Cliff.

Over the next 5 years residents of Newfoundland and Labrador as with all other jurisdictions in Canada and the USA should experience an extreme reduction in the price of essential commonly prescribed medications.

As these new generics enter the marketplace - our government should act immediately to replace the brand drugs on our formulary. This will save us tens of millions of dollars.

Unfortunately we still have a secret committee determining when our tax dollars will be used wisely.

If you can buy the drug in New Brunswick, Alberta, or Ontario - why not here in our province?

Why are our hospitals permitted to dispense drugs that our retail pharmacies cannot?

Why does our government pay brand prices when savings of 40 per cent and more are available?

Sue's Blog will layout some of the financial losses our government has allowed of our essential health care dollars.

We also need to discuss and understand if there are any potential conflicts within the secret committee that answers only to the Minister - and NOT the House of Assembly. We need to know if any member of the committee has any dealings with the drug companies - outside of the committee - and whether those dealings are commercial in nature.

Is it possible that any committee members - who have the power of recommendation to the Minister of Health - could use that power in commercial dealings?

Do the Brand Drug Houses lobby any of the committee members - in any way whatsoever?

You see something is not right here. We are losing tens of millions of dollars and nothing is being done about it. Sound Familiar?

Open and Transparent - right? Public Accounts - spending our money wisely right?

Where is the investigative journalism? Where are the NDP members on this - they are the champions of health care right?