Tuesday, August 3, 2010

New Generic Drug Reform Coming to BC

A new agreement was signed between the B.C. Ministry of Health Services, the BC Pharmacy Association (BCPhA) and the Canadian Association of Chain Drugstores (CACDS). The new Pharmacy Services Agreement, available at www.health.gov.bc.ca/pharmacare/suppliers/psa.pdf  will come into effect on July 28, 2010.

The jist of the new agreement is that generic prescription drugs will be price caped at 35% of the Brand Name drug starting in 2012.

If a Prescription Drug costs $100 the generic equivalent can cost no more than $35. 
Implications for extended health plans in BC
  • If you currently reimburse for Brand Name drugs, change the coverage to Generic and save yourself a bundle.
  • If you currently have paper reimbursement of drugs, you automatically have Brand Name drug coverage, as the insurance companies cannot instruct the pharmacy to dispense the generic at the point of sale.
  • If you have a paper reimbursement drug plan, you will need to switch to a drug card to allow for a generic drug formulator.

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Courtesy of Manulife Financial
Generic drug prices to be reduced in BC

The BC Ministry of Health Services and the BC Pharmacy Association (BCPhA) and Canadian Association of Chain Drug Stores (CACDS) have negotiated a new Pharmacy Services Agreement that comes into effect July 28, 2010. Although the agreement is not binding on individual pharmacies, it is expected that most, if not all, pharmacies will comply.

This is good news as plan sponsors will benefit from the cost-savings attributed to lower cost generics on the PharmaCare formulary. The expected savings between October 15, 2010 and July 3, 2011 is about 3.7% of drug costs. This savings will vary significantly by plan depending on the make up of the plan and demographics.

Generic drug pricing
The agreement applies to both public and private payers and the following price reductions will be phased in over the next two years:



Effective dateDescription of changePrice compared to brand
July 28, 2010Generic drugs added to PharmaCare since January 1, 200942% of the manufacturer list price for the equivalent brand
October 15, 2010New generics

Existing generics (on PharmaCare prior to January 1, 2009)
42% of brand

50% of brand
July 4, 2011Existing and new generics40% of brand
April 2, 2012Existing and new generics35% of brand


Dispensing fees
The Ministry also announced increases to the PharmaCare dispensing fee. These increases, although applied to the public plan, will result in a shift in marketplace conditions and will erode some of the savings to private payers.

Effective dateDispensing fees
July 28, 2010Moves from $8.60 to $9.10
October 15, 2010$9.60
July 4, 2011$10.00
April 2, 2012$10.50


Manulife will adjust our reasonable and customary fees in accordance with these changes.

Re-investing in Pharmacy Services
The Province will gradually increase the funding available to support pharmacy in the provision of clinical services. By 2013, the Province is committed to investing $35 million annually for pharmacy clinical services.

Manulife will continue to work with the BC government and other industry stakeholders to help ensure that group benefits plans continue to be affordable.

For more information on the changes to PharmaCare in BC:
http://www.health.gov.bc.ca/pharmacare/newsletter/10-007news.pdf




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TL;DR - Generic Drugs In BC Just got about 50% cheaper!

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