Alberta lowers generic drug costs after talks with pharmacy chains

EDMONTON - Alberta is reducing the price of generic drugs after having to compromise on a new price structure in negotiations with pharmacies and drug makers.

EDMONTON - Alberta is reducing the price of generic drugs after having to compromise on a new price structure in negotiations with pharmacies and drug makers.

The province had hoped to reduce the cost of existing generic drugs to 45 per of the brand-name price - down from 75 per cent.

But Health Minister Gene Zwozdesky announced Thursday that the government settled for a rate of 56 per cent starting in April.

"You have to come up with a deal that the majority of the pharmacists and pharmaceutical providers can live with," the minister told a news conference.

"While 45 per cent may have been a target, you can't always get what you want and neither can they."

The government estimated last fall during the first round of generic drug price changes that a new pricing formula would save Alberta roughly $100 million a year on generic drugs.

But Zwozdesky conceded Thursday that the savings could end up being about $10 million lower because of the higher-than-expected rate that was negotiated.

"There was some give and take because the existing generics constitute a very large part of pharmacists' business," he said. "But I'm pretty pleased with the result."

Several provinces including Ontario, Quebec and British Columbia have already adopted lower generic drug prices. But Zwozdesky concedes their prices are closer to 50 per cent of the brand name price.

But the Alberta government was under pressure from rural pharmacies, which had been complaining that they might not survive under the new price structure.

This final phase of the Alberta Pharmaceutical Strategy also includes additional pay for pharmacists who are willing to consult with patients, review new medications or give immunizations.

Margaret Wing, with the Alberta Pharmacists Association, says this the deal announced Thursday is good for consumers, pharmacists and the province.

"Patients are going to be paying reduced costs on the generic drugs," she told reporters. "Pharmacists now have an opportunity to provide professional services and be compensated for that."

Liberal Health critic Kevin Taft is also praising the deal, calling it "a step in the right direction."

"We'd like it to continue to go further, but any steps the government takes to contain spending and costs on drugs is a good step," said Taft.

But David Eggen, with Friends of Medicare, says the government should have pushed harder to get a lower price.

"You won't achieve true savings for Albertans on drugs until you take on the drug manufacturers," said Eggen.

"You can see where there's a wall there and you just don't save any more until you start a pharmacare plan and get into negotiations with other provinces for a national pharmacare plan."

Alberta spends roughly $1.2 billion a year on prescription drugs, and about 35 per cent of these are generic drugs.

Last fall, the province announced that prices for new generic drugs would be set at 45 per cent of the cost of brand name drugs.

But right now the new drugs account for only a small fraction of total drug costs compared with existing generic drugs, which will be priced at the higher rate.

 
 
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