Ontario could ban rebates by drug firms

Proposed legislation in the Canadian province of Ontario would give better access to prescription drugs and better value for taxpayers' money, according to Ontario's Health Minister, George Smitherman. He has told audiences across the province that, with a Canadian C$3.0 billion ($2.71 billion) a year drugs bill, which is projected to grow at an annual rate of 10% (three times the rate of tax revenue increases), action needs to be taken.

Mr Smitherman's proposals include measures aimed at lowering the cost of both publicly-funded and private health programs, the latter representing about C$2.6 billion per year. Allowing pharmacists to switch to a generic drug, where a branded product has been prescribed, without having to get the prior approval of the patient's doctor, does not meet with opposition from local pharmacy groups. On the other hand, abolishing the practice whereby generic drugmakers pay rebates worth up to C$200.0 million per year to pharmacists in exchange for increased orders, has provoked protests.

The government is reported to have calculated the inflation of generic drugs to be 40% as a result of the rebates. Pharmacists counter by warning that the reform would mean that many pharmacies would cease stocking expensive drugs, with the result that patients would end up in a waiting-list for supplies. Neil Bornstein, a pharmacy store owner in Scarborough, east Toronto, told the Toronto newspaper the Globe and Mail that C$500.0 million a year in revenue would be lost.