Ontario drug changes cut employer costs - OPSEU

Change opens door to potential savings for employers in the benefit plans they now offer to employees, union says.

Toronto (16 April 2010) - Much attention has been focused on the war of words between Shoppers Drug Mart and the Ontario government over amendments to the Transparent Drug System for Patients Act and the Ontario Drug Benefit Act but too little notice has been taken of the impact on employer benefit plans, says the Ontario Public Service Employees Union (OPSEU/NUPGE).

The changes would reduce the cost of generic drugs to 25% of brand names. They would also eliminate professional allowances given by the generic drug companies to the pharmacies, something the health minister has compared to a kickback.

These so-called professional allowances would be accounted for in the price of these drugs, many of which cost much more in Ontario than in the United States, the union says.

"When the Transparent Drug System for Patients Act (2006) was passed, it created substantial differences between the public Ontario Drug Plan (ODP) and the employer-based private sector plans. With this amendment, regulated prices of generics will also be passed on to the private sector."

OPSEU notes that Aon Consulting, in its newsletter Ready, says that with the patents of major brand name drugs like Lipitor expiring soon, “the cumulative savings for employers may be significant and employers have an opportunity to explore how best to capitalize on these savings within a broader approach to cost management through the adoption of strategic and fully integrated employee wellness management.”

Implementation of the new changes will be swift. Many of the terms come into force on May 15 of this year, including elimination of professional allowances for the ODP.

Dispensing fees are to rise by about 20 cents per year over the next four years, depending on the class of pharmacy. By 2014 dispensing fees will range from $8.83 to $12.14.

The government is also sweetening the deal by providing an additional $100 million for the MedsCheck program, a benefit that pays for an annual 30-minute consultation between the pharmacist and any patient taking more than three prescription medications.

OPSEU has publicly supported the changes as have most other trade unions and the Ontario Federation of Labour (OFL).

The OFL is also calling upon Shoppers Drug Mart not to hold their patients to ransom amid the chain’s moves to shorten pharmacy hours in the Ontario Health Minister Deb Matthews' riding of London North.

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

More information:
OPSEU supports Ontario action to stem drug costs
OFL to Shoppers Drug Mart: stop abusing the public