Drug Pricing—Working Together for Sustainability and Positive Health Outcomes.

Thursday, April 15, 2010

In British Columbia in 2008, employers and unions provided health insurance protection for over 2.7 million residents and sponsored private plan benefits that totaled over $2.2 billion for medical, hospital, dental and drug coverage. Costs continue to rise. The escalating cost of drugs in particular not only threatens consumer health outcomes when patients can no longer afford medication; it also puts drug plans at risk when employers and employees can no longer afford the increasing premiums.

Many brand name blockbuster drugs are reaching the end of their 20 year patents in the next few years. This will result in some savings to public and private drug plans, and to consumers as more generic equivalents become available. However, there is additional room for savings with generic drugs as generic drug companies pay rebates to pharmacies for stocking their products.

Across Canada, provincial governments and private payers are looking for solutions that provide stability and sustainability on behalf of consumers and plan sponsors alike. In 2006, The Ontario government’s initial efforts to capture savings from generic drug rebates through legislation focused exclusively on banning rebates charged to government programs—which resulted in cost shifting through which private plans ended up being charged substantially more. They have now announced legislation to change this model to one where the pricing applies to all stakeholders: public payers, private payers and consumers.

The province of Alberta recently set consistent pricing that applies to all payers including the public plan, private plans, and consumers.

In early 2009 the province of British Columbia implemented limits on the price of new generic drugs covered under the public Fair Pharmacare program through an interim agreement with pharmacists. The interim agreement limits the amount payable by the government to 50% of the brand cost. Pharmacies are not to charge private plans or the cash paying customer the difference. The BC government is now in discussions with pharmacies and other stakeholders working toward a permanent agreement.

Pacific Blue Cross takes the issue of drug cost containment seriously. Together with the Canadian Life and Health Insurance Association (CLHIA), we believe that drug pricing agreements should extend to all stakeholders.

We encourage plan sponsors who share this view to write the Honorable Kevin Falcon, Minister of Health and express support for equitable and consistent generic drug pricing for all payers.
Together we can affect change.

For your convenience, we make this letter template available for this purpose.

Send to:	Honourable Kevin Falcon Minister of Health Room 337, Parliament Buildings PO Box 9050 STN PROV GOVT Victoria, BC V8W 9E2 kevin.falcon.mla@leg.bc.ca
Copy to:	John Dyble Deputy Minister of Health 1515 Blanshard Street, 5th Floor Victoria, BC V8W 3C8 hlth.dmoffice@gov.bc.ca
And your local MLA:	A list of all MLAs and their contact information can be found here

Pacific Blue Cross has been British Columbia's leading benefits provider for over 70 years. Our comprehensive understanding of health care needs fuels our commitment to service. Together with BC Life, our subsidiary, we provide health, dental, life, disability and travel coverage for approx 1.5 million British Columbians through employee group plans and through individual plans for those who do not have coverage with their employer. Pacific Blue Cross and BC Life continue to respond to customers' needs in plan design, administration and technology.