Alberta cuts generic drug costs

Prices for new generic drugs will be reduced from 75 per cent to 45 per cent of the brand-name drug price, the Alberta government said Tuesday.
Alberta has set aside $5 million to provide an allowance for all pharmacies for each prescription less than $75. ((CBC))

Prices for new generic drugs will be reduced from 75 per cent to 45 per cent of the brand-name drug price, the Alberta government said Tuesday.

Prices for existing generic drugs will also be reduced starting next April, said Minister of Health and Wellness Ron Liepert.

"Prescription drug costs continue to climb, and we need to bring those costs down for Albertans," said Liepert. "The next phase of our pharmaceutical strategy will reduce the out-of-pocket costs of prescription drugs for all Albertans, allow for quicker access to new drugs and give pharmacists a greater role in patient care."

The first phase of the Alberta Pharmaceutical Strategy was announced in December 2008 and included a drug program for those with rare diseases, a new drug plan for seniors and revised premiums for non-group coverage.

The second phase, announced Tuesday, means Alberta will begin to negotiate product-listing agreements with brand name drug manufacturers, with the aim of reducing drug costs through volume discounts.

Ontario, Quebec, B.C. and Manitoba already use product-listing agreements.

Alberta says it will also introduce a new payment model for pharmacies. A transition plan has been developed to support pharmacies as they shift from just dispensing prescription drugs to providing a wider range of services.

There will be $5 million in subsidies to pharmacies for dispensing prescriptions valued at less than $75 each.

Dave Eggen, executive director of Friends of Medicare in Alberta, praised the changes in the drug plan, but the government still has work to do.

"They still haven't resolved Phase 1 very well, downloading costs on to seniors, having an extensive program for seniors that some people can't afford. So I think they have a lot of unfinished business in regards to the drug program, and a lot of places where they can still save a lot of money."

Eggen said he would like to see bulk buying of all prescription drugs.

"Bulk buying is a good idea. The missing element here, though, is that the government has a capacity to bulk buy and control the generic drug market much more comprehensively. They can set up a clearing house to purchase most prescription drugs and that gives you a much better negotiation power with the pharmaceutical companies."

With files from Falice Chin