EDMONTON - Alberta is changing its deal with generic drug makers to push the cost of such prescriptions from the highest in Canada to the lowest.
This change has national implications that could affect generic drug prices in other provinces, especially Quebec, which is guaranteed the lowest rate on generic drugs in Canada because of its contract with drug makers.
Starting immediately, the government says the cost of new generic drugs in Alberta is dropping to 45 per cent of the cost of name-brand drugs, creating annual savings of $50 million. And the province is negotiating with drug makers on reducing prices for existing generic drugs. Health Minister Ron Liepert expects the new rate to be in the 45 per cent range as well, saving an additional $150 million a year.
The savings will be split evenly between consumers and the government itself, which spends $1.2 billion a year on various drug plans.
Albertans have been paying the highest generic drug prices in Canada, at 75 per cent of the brand-name drug price. Other provinces pay far less, with Quebec and Ontario at around 50 per cent.
The health minister and a spokesman for the drug makers were both vague on why this price gap has existed for several years.
"Good question," said Liepert. "I guess it's a lot of things like in health care.
"It needs addressing and we're addressing it."
Jim Keon, president of the Canadian Generic Pharmaceutical Association, said other provinces have already negotiated new pricing agreements.
"There have been changes in the last three years in Ontario and Quebec," Keon told reporters. "British Columbia negotiated a new pricing model last year."
Keon said holding generic drug costs in Alberta to 45 per cent could be a point of contention because of existing pricing agreements in other provinces, especially Quebec.
"If you provide a lower price to any other province, you have to give it to Quebec as well," he said. "So we're going to go back and look at the numbers, because now it's not just offering a lower price to Albertans, it's also impacting Quebec."
Keon said there appears to be some flexibility with the 45 per cent pricing in Alberta, so some drug makers may seek a higher price to reflect their costs.
"If a manufacturer can make a convincing case to the government, they've said that they will look at the possibility of an exception to the 45 per cent pricing rule," he said. "So that will be looked at on a case-by-case basis. We just learned the number today and the companies will all be looking at that very carefully."
Tuesday's announcement is far less contentious than the first phase of Alberta's new prescription drug policy, announced last December.
The province trimmed $30 million from existing drug programs by tripling some premiums and increasing deductibles, creating a wave of protests - especially from seniors.
Alberta is also negotiating contracts with brand-name drug makers to reduce costs through volume discounts.
The role of pharmacists in Alberta is being expanded to allow them to renew prescriptions, saving a patient a trip to the doctor.
"A greater role for pharmacists means better access to health professionals and improved care for Albertans," said the minister. "There's enough work to go around for everybody."
Liepert said many people have told him that giving doctors the exclusive right to renew prescriptions is "the old way of medicine that frankly has to change."
The province is also shifting to a new payment model for pharmacies that offers fees for a broader range of services, including advice on medications.
Cynthia Rousseau, with the Alberta Pharmacists Association, said there were fears that the province would make cuts to pharmacy funding.
The minister has "agreed to work with us towards a long-term, sustainable model for pharmacy," she said.
The new funding model will be announced Dec. 1.
