Generic drug prices in British Columbia will drop to 35 per cent of the brand price under an agreement between the province, the BC pharmacy association and the Canadian Association of Chain Drug Stores.
The agreement, announced Friday, is expected to result in savings of up to $380-million a year.
Currently generic drug prices in B.C. average about 65 per cent of brand-name costs.
The agreement - reached after several months of co-operative discussions -comes after a bitter fight in Ontario between the government and pharmacies over ways to rein in soaring drug costs. B.C. health minister Kevin Falcon had previously said a deal must be reached by the end of June or one would be imposed.
Unlike in Ontario, where the provincial government eliminated rebates paid by manufacturers to pharmacies as part of its program to reduce generic drug costs, the B.C. deal does not put restrictions on those rebates.
Instead, the deal sets out what the province is willing to pay for generic drugs through Pharmacare, and leaves it up to the pharmacies and the manufacturers to negotiate those fees on their own.
With the province putting a lid on what it is willing to pay, those rebates will drop. But to cushion the blow, the province has approved increases to pharmacy dispensing fees and has also agreed to provide funding for some new clinical pharmacy services.
By the third year of the agreement - which will be phased in over three years, beginning this year - $35-million is expected to be steered toward new clinical pharmacy services.
B.C. Pharmacy Association chief executive officer Marnie Mitchell said the agreement strikes a balance between the desire to make drugs more affordable and "reasonable remuneration" for pharmacy services.
B.C. spends more than $900-million a year through Pharmacare on prescription drugs, with generic drugs accounting for an increasing portion of that total - nearly one-third, of $286-million, in 2008-2009.
Wendy Stueck