Fair Drug Prices for Nova Scotians

Transcription

1 Fair Drug Prices for Nova Scotians September 2010

2 Fair Drug Prices for Nova Scotians September 2010

3 The Problem Nova Scotians pay too much for prescription drugs. In Nova Scotia, we pay more for generic drugs than most developed countries in the world and now several provinces in Canada. Why should seniors and Nova Scotians who need help with the cost of their prescription drugs pay more than people in other parts of Canada? As a government, we want to get better prices for Nova Scotia seniors and those who rely on Pharmacare programs for coverage of their prescription drugs and for taxpayers. This means getting a better deal on the price of medications. Government s spending on prescription drugs, through the province s Pharmacare programs, has almost doubled in the past eight years. Prescription drug costs to government are growing for three reasons: 1) More Nova Scotians are enrolling in the Pharmacare programs. Growth of enrollment in all Pharmacare Programs 250,000 Number of people 200, , ,000 50,

4 The province s Family Pharmacare program was introduced in March Almost 5,000 people are now registered in the program. More than 100,000 seniors get assistance with their prescription drug costs through Seniors Pharmacare. Over the past few years, enrollment in this program has grown an average of two per cent each year. 2) People are taking more medications. Last year, the Pharmacare programs helped pay for close to five million prescriptions, up from just over four million five years earlier. ) And medications are costing more. Prescription drugs now account for the fourth largest area of the province s health care spending, after hospitals, continuing care and physicians. Without taking measures to slow the growth, government estimates drug costs will grow by close to seven per cent this year alone, up to just over $00 million. Total Drug Costs ($ millions) $ millions Forecast 4

5 And, while the amount spent on drugs covered through the province s Pharmacare programs is growing at a rapid rate, new, expensive drugs continue to become available. As a result, governments across Canada face increasing pressure to fund these high-cost drugs. In Nova Scotia, the government is facing a deficit and is working hard to get our finances back to balance. The number of Nova Scotians enrolled and cost of the Pharmacare programs, by program, as of March 2010: Program Enrollment Approx Cost (09/10) Seniors Pharmacare 101,521 $187,620,000 Family Pharmacare 5,657 $18,60,000 Dept of Community Services Pharmacare Benefits 62,22 $50,600,000 Drug Assistance for Cancer Patients 99 $880,000 Nova Scotia Diabetes Assistance Program 54 $410,000 Exception Drug Fund,940 $29,910,000 The amount Nova Scotia spends on health care is growing Government s spending on health care accounts for 40 per cent of the total provincial budget, making it the largest area of government spending. The growth in health care spending is impacting government s ability to spend in other important areas, such as education, early childhood learning, poverty reduction and the environment. Nova Scotia has already taken steps to control the growth of spending on prescription drugs through Pharmacare. We have done this by: Requiring that generic drugs be substituted for brand name drugs because they are the same but cost less. Requiring that certain conditions be met before paying for higher cost medications to help ensure the best use of more expensive drugs. Providing physicians and pharmacists with unbiased information on medications to help improve prescribing practices and create awareness about costs. Ensuring the province only pays for medications proven to be medically beneficial and cost effective - in other words, the province receives value for the money it spends on drugs. 5

6 The government is taking action now to get better drug prices for Nova Scotians who rely on the Pharmacare programs for coverage of their prescription drug costs and for taxpayers. This will help ensure Nova Scotians are able to afford the drugs they need. How are drugs priced now? Even though generic drugs are more affordably priced than brand name drugs, and help Nova Scotians and the province save money, we believe the price we pay for most generic drugs in Nova Scotia is still too high. Manufacturers of generic drugs have kept prices for these drugs higher in Canada. They then provide financial rebates to pharmacies in return for stocking their generic drug over a competitor s. Pharmacies in Nova Scotia - and Canada - have come to rely on rebates as part of their business model. Drug pricing is changing in Canada. British Columbia, Ontario and Alberta have recently announced changes to the way generic drugs will be priced in their provinces. As a result of these changes, Nova Scotia will be paying considerably higher prices than these provinces for the same drugs. There are two categories of drugs brand drugs and generic drugs. Brand drugs are drugs that are protected by a patent, supplied by a single company and marketed under a brand name. Prices of patented brand drugs are regulated by the Patented Medicine Prices Review Board. Generic drugs are low-cost versions of brand drugs, and are usually produced by several different generic companies once the patents expire on the brand name drug. Generic drugs are proven to be as safe and effective as brand drugs. There is no national price regulation for generic drugs. 6

7 What do Nova Scotians pay now? Here are two examples that show what Nova Scotians now pay for commonly prescribed drugs for osteoporosis and high cholesterol, compared to what they would pay if Nova Scotia adopted other provinces' new drug pricing strategies. Fosamax and its generic form, alendronate Now that the generic form of Fosamax (alendronate), used to treat osteoporosis, is available here, a Nova Scotian senior pays $82.6* for a one year prescription through Seniors Pharmacare. The same senior would pay $64.44 based on B.C. s pricing and $49.68 based on Ontario s pricing for the same prescription of the generic drug. Nova Scotia seniors pay 65% more than they would in Ontario and 27% more than in B.C. * price based on a three months supply four times per year through Seniors Pharmacare Lipitor and its generic form, atorvastatin Now that the generic version of Lipitor (atorvastatin), prescribed for high cholesterol, is available here, a Nova Scotian pays $84.88* for a one year prescription of the generic drug through the Family Pharmacare program. The same person would pay $62.12 under B.C. s new pricing and $46.68 under Ontario s pricing plan for the same prescription of the generic drug. Nova Scotians pay 81% more than in Ontario and 6% more than in B.C. * price based on a three months supply four times per year through Family Pharmacare 7

8 The Solution We need to take action now We need to take action now to do what we can to get better prices for Nova Scotians who need help with the cost of their prescription drugs through Pharmacare programs and for taxpayers. And we need to do it in a way that is fair to everyone most of all, to Nova Scotians who get help with their drug costs through Pharmacare and taxpayers. At the current rate of growth, Nova Scotia s Pharmacare programs are not sustainable. The province does not have enough money to continue to be able to afford the rapid growth in drug spending as we have in the past, without increasing Pharmacare premiums or taxes. Pharmacare is critically important to many Nova Scotians. Because of this, we re committed to finding ways to contain the growth of these costs so we can continue to afford these programs into the future. How will we achieve better drug prices? We are working on a plan to get better prices for prescription drugs for Nova Scotians. As part of our approach, we are considering the following five measures: Set generic drug prices Set a cap on the price of generic drugs based on a percentage of the price of the equivalent brand name drug. This could apply to all generic drugs, just new generic drugs or generic drugs currently covered by Pharmacare. Limit pharmacy rebates Require generic drug manufacturers to report the financial rebates they pay to community pharmacies for stocking their generic drug and limit the amount of these rebates. Tender for one or more drugs Establish a competitive process in which the province asks manufacturers for a better price for one or more drugs and lists the drug or drugs that come in at that price for coverage through Pharmacare. 8

9 Establish rules around price increases Put rules in place to control increases on the prices of all generic drugs. Define the price paid to pharmacies for drugs Establish a clearly defined price paid by government to community pharmacists for brand drugs. Getting input on the solution In the coming weeks, we will meet with pharmacists, pharmacy owners, drug manufacturers, doctors and medical staff at district health authorities to get their input on how best to get better drug prices for Nova Scotians. During these meetings, we will discuss the options the province is considering and how they might be structured, and get input on the impact these options could have on Nova Scotians, community pharmacies, drug manufacturers and government. We are committed to working together to find innovative, creative ways to limit growing drug costs so pricing is fair to everyone most of all, to Nova Scotians. We are also working with pharmacists to better use their skills and expertise in the delivery of health care to Nova Scotians. As part of this, together we are looking at how pharmacists will be compensated for providing these additional services. To find out how to provide your input, please go to page 12 of this paper. 9

10 Our Commitment Our commitment - better health care for Nova Scotians The Government of Nova Scotia is committed to making health care better for seniors and families in every region of the province. We know that many Nova Scotians are working hard to make ends meet. As a government, we want to help make life more affordable for seniors and families in the province. An important part of making health care better and life more affordable is making sure Nova Scotia seniors and those who need help with the cost of their prescription drugs through Pharmacare are able to get the prescription drugs they need at a price they can afford. Our commitment is to ensure Nova Scotians have access to safe, effective drugs that will make a difference in their lives. We are working to make health care better and life more affordable for Nova Scotians while living within our means by: Getting better prices for prescription drugs for Nova Scotia seniors and those who rely on Pharmacare programs for coverage of their prescription drugs. Making better use of prescription drugs to improve health outcomes for Nova Scotians. Better use of prescription drugs through a Drug Management Policy Unit As a province, we recognize that better drug prices are only one part of the solution for containing the growth of drug costs. We need to work harder to ensure that Nova Scotians have access to drugs that make a difference to their health, and that they are prescribed appropriately and safely. We are in the process of establishing a Drug Management Policy Unit that will focus on better pricing and better use of prescription drugs. Some of our initiatives to promote the better use of prescription drugs include: More educational resources for prescribers Policies on drug use Partnership with drug manufacturers to work on appropriate use of drugs Drug Information System which will be a tool to ensure the safe and appropriate use of drugs 10

11 Background How do Nova Scotians pay for prescription drugs? Nova Scotians pay for their prescriptions through one, or sometimes a combination, of: Nova Scotia s public drug plans the Pharmacare programs Federal drug programs Private benefit programs such as Medavie Blue Cross Cash payment As part of government s commitment to ensure Nova Scotians have access to the drugs they need at a better price, the province s Pharmacare programs provide drug coverage to Nova Scotians who need it most. Pharmacare helps Nova Scotians with their prescription drug costs. Some of the people who benefit are seniors, families, those without private health insurance and those who need help with high drug costs not covered by their private insurance. How Pharmacare helps Nova Scotians In 2009/10, the Nova Scotia Pharmacare programs: Funded over 6,000 drugs Helped more than 200,000 Nova Scotians pay for their drugs Helped pay for almost 5 million prescriptions Funded more than $285 million in prescription drugs Did not increase premiums, deductibles or co-payments despite increasing costs How are decisions made on which drugs are funded? In Nova Scotia, we use a consistent and thorough process for deciding which drugs are funded through Pharmacare. Committees - made up of experts in medicine, pharmacy, ethics and economics - examine the evidence of medical benefit and cost effectiveness of a drug, and recommend which drugs should be funded by government. 11

12 How to Provide Input More information To learn more about why we need to take action now to manage the growing cost of drugs to the province and to ensure Nova Scotians are able to access the drugs they need at a better price, visit the Fair Drug Prices section of the Department of Health website at How to provide your input We welcome your input. You can submit your comments by: to: fairdrugprices@gov.ns.ca Mail to: Fair Drug Prices for Nova Scotians c/o Pharmaceutical Services Branch Department of Health PO Box 488 Halifax, NS BJ 2R8 12

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