"Transparency" Law Serves to Hide Secret Rebates from Drug Makers
TORONTO, Aug. 7 /CNW/ - According to an article in today's National Post
newspaper, the government of Ontario has been negotiating in secret to receive
hundreds of millions of dollars of hidden "rebates" from brand name drug
companies. This comes at a time when the government has signaled it intends to
make more cuts to funding for community pharmacies.
In the article "Drug Firms Revamp Pricing", the National Post quotes
Ontario Public Drug Plans Executive Officer Helen Stevenson as saying, "We are
compromising on transparency, we acknowledge that."
"This is a direct violation of the spirit and the name of the law this
government passed only 3 years ago," said Faisal Khawaja, an independent
pharmacist in Milton, Ontario. "They called Bill 102 the 'Transparent Drug
System for Patients Act'", said Khawaja. "Apparently that means everyone else
should be transparent, while the government meets behind closed doors, under
confidentiality arrangements, to make secret deals on rebates worth hundreds
of millions of dollars. It's a scandal."
In fact, while Ontario is reaping huge savings through rebates on brand
name drugs, government reimbursement restrictions force pharmacies to dispense
those same drugs at a loss, every time they fill a prescription.
Ontario saving money, but planning funding cuts
"This is the most outrageous hypocrisy I've ever seen in 20 years of
working with Ontario governments," said Rita Winn, a pharmacist and General
Manager of Lovell Drugs in Oshawa, Ontario. "Last month the government called
pharmacy in to tell us that they are looking at making more cuts to community
pharmacy funding for the second time in only three years," said Winn. "One
thing they singled out was the professional allowances pharmacies negotiate
with generic drug manufacturers. They want to claw our allowances back, but at
the same time they've been secretly getting massive rebates from brand name
drug companies. So they want one set of rules for themselves, and a different
set of rules for everyone else."
Professional allowances are one critical part of the current funding
formula for community pharmacies. According to a recent study commissioned for
Ontario pharmacy organizations, without these allowances most pharmacies would
be losing money on every prescription they dispense.
The allowances are paid by generic drug manufacturers to pharmacies to
offset underfunding by government. They are used to pay for patient care
services that are not reimbursed by government or private drug plans.
"Every pharmacist that I've talked to is angry," said Faisal Khawaja.
"The government has squeezed our funding so hard that in the absence of
allowances, we lose money every time we dispense a brand name drug under the
Ontario Drug Benefit. And now we find out that, the whole time, they have been
getting secret rebates from the drug companies on those exact same drugs.
That's not right."
About the Independent Pharmacists of Ontario
The IPO was formed in 2006 as a direct result of the passing of the
Transparent Drug System for Patients Act (TDSPA, or Bill 102). The IPO
represents our communities' Independent Pharmacists. They are small business
persons, but professionals first. They are medication experts highly educated
in the field of pharmacy and, above all, are committed to the health of their
Find out more about the IPO at our website: www.ipoassociation.com.
For further information:
For further information: Faisal Khawaja, (905) 512-5816 (mobile); Rita
Winn, (905) 723-2276 (office)