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.

Newfoundland and Labrador Govt. delivering for Shoppers Drug Mart

Shoppers CEO predicts DOOM for Independents

The Newfoundland and Labrador government is about to serve a central Canadian company - local businesses on a platter.

With 100 million local dollars invested in the provincial economy - independent pharmacies have been told by their government that they don't matter.

As witnessed in the House of Assembly - PC Cabinet members and backbenchers chided these local owners with calls to show their T-4's and state where they take vacations.

The general assertion of government is that independents are filling their pockets with rebates.

Despite the lies and misleading statements by these politicians - Shoppers Drug Mart's CEO is backing up what the independent stores  have been warning against.

In the Globe and Mail yesterday Domenic Pilla spells it out clearly for all to see.
 

“We are facing the single worst commercial environment that the drug sector has ever faced … But who is in the absolute best position in Canada to weather that – in some cases to take advantage of that? It’s Shoppers Drug Mart.”

He said that as the country’s largest drugstore chain, Shoppers is best positioned to navigate the road ahead, with economies of scale to help it lower its costs.

And he wants to buy competitors as reduced government reimbursements start to squeeze smaller rivals, he said. “That’s a freight train accident waiting to happen. How it will happen and how quickly it will happen ... is something that is still to be told.” 

His estimated that Shoppers pharmacies probably could add another 30 per cent more prescription files without having to invest in fixed costs. “That would make acquisitions for us very accretive.”

Newfoundland and Labrador's Minister of Innovation, Business and Rural Development might want to look long and hard in the mirror today - as he personally participated in the likely destruction of local investors. 

As Shoppers talks about chewing up local businesses - it does so while saying they don't have to invest a cent in fixed assets. The government of Newfoundland and Labrador is clearly stating their position on local business and investment. 

To top it all off the monies lost to the treasury - particularly monies needed for health - will far outweigh any potential savings to the government from their new generic drug pricing model. 

Further the services provided by these independents - that will be lost from the policy will cost the government tens of millions more. 

Particularly puzzling is the government's insistence that these independents sit at a table with Shoppers employees and come to a common position. What might that be? We the independents agree to turn over our investments to you as cheaply as we can? 

The buffoonery in the House of Assembly underscores the actual ignorance or complicit behavior that will in the end ruin local business, diminish front-line health services, and drive the costs of those services through the roof. 

Bravo - why not stand in your place and take a bow.

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.

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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.

Nova Scotia - Take Heed Newfoundland and Labrador

Let's see if the Government of Newfoundland and Labrador follows the lead of provinces such as Ontario and closer to home Nova Scotia.


Generic price caps blamed for closure of Nova Scotia village pharmacy
 
(Carol Moreira - CanadianHealthcareNetwork)
 
The only pharmacy in the Nova Scotia village of Lawrencetown will close this summer and critics are blaming the cap on the price of generic drugs, introduced last year.

Pharmacy co-owner Rob Perry told the Chronicle-Herald that lower generic prices played a role in the store's closure, although rising costs and falling income also contributed.

"Economically, it's just not feasible. It's more expensive to run a business than it was two years ago," Perry said. The Lawrencetown Pharmasave opened in 1955 and will close on June 30th.

Allison Bodnar, executive director of the Pharmacy Association of Nova Scotia said the Lawrencetown Pharmasave is the first closure, but many pharmacies are suffering because of the cap on the price of generics sold to Pharmacare recipients.

 "Reduced hours, staff layoffs, reduced services and even further closures can be expected as the final legislated price cuts take effect this summer," Bodnar said.

NL Pharmacy oldest registered member Passes Away - A Distinguished Gentleman and Pharmacist

The Council of Independent Community Pharmacy Owners joins with the Pharmacy Community to offer our condolences to the family of Cyril Legrow.

Below please find a story by the Compass Newspaper

Funeral for Cyril LeGrow scheduled for Thursday at Bethany United Church

The oldest and longest registered member of the Newfoundland and Labrador Pharmacy Board, Cyril LeGrow, has passed away, just one week short of his 100th birthday.

LeGrow, who died Feb. 14 in Carbonear, worked as a pharmacist for nearly 78 years.

He was born in Rock Cove, Conception Bay on Feb. 20, 1912. He was educated in Rock Cove and in St. John's after which he completed his four-year pharmacist apprenticeship at McMurdo's in St. John's.

He was first registered with the Newfoundland Pharmacy Board in 1934.

After his graduation, he practised at his father's pharmacy (a Rexall pharmacy) in Broad Cove and later in Carbonear.

In 1975 he sold his pharmacy in Carbonear and established the Pharmacy Department at the Carbonear General Hospital. He retired as chief pharmacist at Carbonear Hospital in May of 1979.

After a long and distinguished career, he was made an honorary member of the then Newfoundland Pharmaceutical Association. Family, friends and colleagues were preparing to celebrate his 100th birthday on Feb. 20.

He is predeceased by his wife and leaves two sons, Malcolm and John.

The funeral will take place at 2 p.m. Thursday, Feb. 16 at Bethany United Church in Carbonear.

Canadian Pharmacists Journal - Story CICPO Court Action

 Latest Story in the Canadian Pharmacists Journal by Kathie Lynas

Pharmacy owners in Newfoundland and Labrador going to court to challenge right of professional body to negotiate compensation deal “Independent pharmacies may end up refusing to take government drug-plan cards, no matter what the government signs with PANL” — Sue Kelland-Dyer, Executive Director, CICPO.

The organization representing the owners of independent community pharmacies in Newfoundland and Labrador has launched a legal challenge of parts of the provincial Pharmacy Act and will have its day in the Newfoundland Supreme Court later this year. The biggest legal issue for the Council of Independent Community Pharmacy Owners (CICPO) is the provision permitting the province’s professional association — the Pharmacists Association of Newfoundland and Labrador (PANL) — to negotiate financial contracts with government on behalf of the owners.

“An advocacy body for the profession has nothing to do with the commercial operations of businesses, and pharmacies — the individual corporations that government signs legal contracts with — are not members of PANL, nor can they vote,” says the executive director of CICPO, Sue Kelland-Dyer.

Using the pharmacist’s professional body for commercial negotiations, she adds, creates a conflict of interest because PANL is attempting to represent both the private sector employers who employ its pharmacist members, as well as the pharmacists themselves. The situation in Newfoundland and Labrador is unique in Canada, says Ms. Kelland-Dyer, noting that other provincial governments negotiate contracts with the owners’ associations as well as pharmacist bodies. “The action of separating the commercial from the profession enhances the interests of both sides. Businesses have a different agenda than the pharmacists.”

The Council has attempted to lobby government for changes to the Pharmacy Act to rectify the situation, but that hasn’t succeeded. So CICPO took legal action and the Supreme Court hearing is scheduled for December 2, 2011.

Meanwhile, PANL is in the process of negotiating a new compensation agreement with the province, in the face of government plans to reduce the price of generic drugs and eliminate the rebate system. A new pricing model for generic drugs could be devastating for independent pharmacy owners, says Ms. Kelland-Dyer. Newfoundland and Labrador, with so many rural and remote areas, has a very high percentage of independents.

 “We have 54 regions in our province that only have independent pharmacies,” she says. “These stores will be in jeopardy, if not closing - reducing hours and not able to properly serve populations spread out over large areas.” In the end, the independent pharmacies may end up refusing to take government drug-plan cards in their stores, she adds. “No matter what the government signs with PANL, that signature doesn’t bind any corporation to an agreement. They may end up with 65 independent
corporations that don’t recognize it, so what have they achieved?”

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CICPO begins the Court Process Today

From the Telegram today - with the complete story to follow in the paper tomorrow. 

The Council of Independent Community Pharmacy Owners (CICPO) made its first appearance in Newfoundland Supreme Court today to begin its challenge of sections of the Pharmacy Act and regulations.

Justice Richard LeBlanc has scheduled Dec. 2 for a full-day hearing.

At issue is a provision in the act that permits the Pharmacists Association of Newfoundland and Labrador (PANL) to negotiate financial contracts with government on behalf of the independent owners.

CICPO is also challenging a recent amendment to the pharmacy regulations extending the notice pharmacists have to give to opt out of the provincial prescription drug program.

What is happening to Pharmacy and where is the Board? Ask Minister Kennedy!

The Newfoundland and Labrador Pharmacy Board is the self-regulating body for pharmacy in our province. As you have probably heard in the news - they are the body that monitors both the profession and the operations of pharmacies and may hold disciplinary hearings and issue professional sanctions and/or remove a license of either a pharmacist or pharmacy.

By the same token they should also be there to protect their profession - in the interest of public safety and health - in the same manner the College of Physicians and Surgeons do for Physicians. But the NLPB is no match - and it is going to cost everybody in the end.

The Pharmacy Board as is the problem with the PANL is inundated with big corporate agendas - something which the College does not have to deal with. This is because you do not have to be a pharmacist to own a pharmacy. The Board is an elected body and as such staff pharmacists who work for the big conglomerates like Wal-Mart and Shopper's Drug Mart can get elected and form part of a decision making process. This is the beginning of the problem. Let's say it's in the best interests of the large companies to increase the scope of practice of a pharmacy technician - in order that they may reduce the number of pharmacists needed - and thereby reduce their costs - what will there staff have to represent in a committee meeting? That's the name of the game for publicly traded companies - lower costs - increase shareholder value. Is this however the model that best serves the public? The answer is no.

There are a number of changes going on in Canada and every one of them are causing the destruction of the profession of pharmacy including the value of these highly qualified health care experts. You see as I write today the multinational retail giants - Shoppers, Lawtons, Wal-Mart and Costco are designing, lobbying, and controlling the development of policy surrounding the profession - in order that they maximize profits. Pharmacists are being replaced by ATM's, Licensed Practical Nurses, and pharmacy technicians. In Ontario - where the generic drug pricing changes were introduced - these regressive policies are in full swing. Now where a rural pharmacy used to stand - an ATM will move in; or if a rural community no longer has access to an independent pharmacy (due to revenue loss) an LPN can now dispense, sell, and compound prescription drugs. Further where the ratio of pharmacists to pharmacy technicians was 1:2 is now becoming 1:6 if there are any limits at all. Better yet the pharmacy technicians primarily needed in large numbers by the heavy volume drugstores are now being encouraged by these chains to take control by supporting their efforts to organize and advocate. This all comes at as cost to pharmacists.

The reports are fairly common in Ontario now, pharmacy students are having a difficult time getting a placement in drugstores in order that they may graduate - and when they do the salaries now being offered are 1/3 to 1/2 what they used to be. The public relations spin by the big drugstore chains is that now pharmacists are going to be able to do more of what they are trained to do - by having techs take care of the less significant tasks. The spin goes on to say pharmacists will be paid for med-checks,  injections, and counselling. The pharmacist is paid by their employer - they do not receive direct payment for their increased scope of practice - in fact they are now being paid less for doing more. Meanwhile the corporation that employs them bring in more cash with a cheaper payroll.

Any reasonably minded person would ask - if an LPN or an ATM or a pharmacy technician can do the job - what is a pharmacist for? A large corporate drugstore or retail chain will examine the human resources necessary to pump out prescription drugs and adjust their staff needs accordingly. So if a pharmacist is restricted to counselling and medication checks and if the government only pays the corporation a set fee to do those tasks - the pharmacists salaries will actually go down. The money making volume can now be completed by techs and machines.

Is this good for the public? No it is not. The pharmacist should as with all experts in health care being enjoying more stability in the workforce and expect professional salaries for the investment they made in their education. For pharmacists - sadly - the opposite is true. The large corporations in Ontario are now reportedly reducing hours, salaries, and benefits for pharmacists. Schools of Pharmacy in universities are now experiencing a difficulty in achieving placements for their students. At the rate things are going these Schools will have to downsize to adjust to the new market reality. Ironically this is happening at a time when Memorial's School of Pharmacy is looking to expand with new facilities and more seats. If one looks at the changes now occurring in Ontario and the fact the Minister Jerome Kennedy is determined to follow that model - our School of Pharmacy could actually be downsized if not eliminated altogether.

So back to the Newfoundland and Labrador Pharmacy Board - The Executive Committee is comprised of 2 pharmacists from the School of Pharmacy and 2 pharmacists from Shopper's Drug Mart. Of nine Board members only 1 is an independent pharmacy owner.

The Chair of all the Professional Practice Committee and sub-committees is Sandra Carey. Ms Carey is a pharmacist and an employee of the Health Initiative Inc. in Toronto which is an agency of McCann Healthcare Worldwide which is a subsidiary of Interpublic Inc. This conglomerate is a global provider of advertising and marketing services. At the most basic level - it's the attempted control of market share. When it comes to health care and pharmacy - who would want such control of market share? With 41,000 employess how much independent influence does Ms. Carey have?

This big corporate agenda is going after all policies related to pharmaceuticals. The bigwigs of retail pharmacy - the giant chains - are lobbying governments to achieve what's best for their shareholders - not what's best for you and I.

Are they succeeding? Well Minister Kennedy could be the poster boy for this initiative - Shopper's Drug Mart is definitely controlling the development of pharmacy policy. So far they have managed to have their own private line of prescription drugs listed on the provincial formulary, they have managed to have the Department of Health turn a blind eye to Seniors rights in personal care homes, and they have managed to keep independent pharmacy out of the Minister's office. They have lobbied directly, and indirectly at $500 a plate political dinners.

As for the Pharmacy Board - it is becoming obvious that they too are turning a blind eye when the public interest is being affected. You can bet your last dollar that the College of Physicians and Surgeons would long since have a like problem dealt with.