Generic drug manufacturers have threatened to cut the supply of up to 150 medications to Ontario's drug benefit plan -- including antidepressants and a drug to control heart arrhythmia -- in an escalating price dispute with the provincial government.
Legislation designed to curb drug costs, which came into effect Oct. 1, has reduced the prices that the Ministry of Health pays pharmacies for generic drugs by more than 20 per cent in some cases.
However, these price cuts have been vigorously challenged by the big drug companies, including Apotex Inc. and Novopharm Ltd., forcing the government to revisit the issue in a bid to prevent an interruption of supply to those covered by the province's drug benefit plan -- seniors, the disabled and welfare recipients.
"Just because a buyer says we'll only pay this price doesn't mean that, as a seller, you have to agree to that," said Jeff Connell, a spokesman for the Canadian Generic Pharmaceutical Association, which represents the country's generic drug manufacturers.
"You can say, 'I'm not selling to you, then. Remove my product from the formulary [a list of drugs covered by the drug benefit plan]"
In face of this threat, the government's Drug System Secretariat is currently negotiating with the manufacturers in meetings being held at the provincial Health Ministry's Queen's Park offices in the hopes of resolving the dispute.
The ministry said in a bulletin sent out to pharmacies last week that manufacturers must sell drugs listed under the Ontario Drug Benefit Act (ODBA) at the formulary's listed price. A manufacturer selling above that price would be violating the provisions of the ODBA. The most severe penalty for manufacturers found to be in violation of this act is the delisting of their product from the drug formulary.
One of the generic drugs being negotiated is amiodarone, which controls heart rhythm. It previously sold for $129.71 per 100 pills (200 milligrams) and, under the revised price, sells for $102. Another is the antidepressant citalopram, which used to cost $87.50 per 100 pills (10 milligrams), but is now regulated to be sold at $62.50.
Mr. Connell said if some of the drugs in question are, in fact, pulled by the manufacturers, the government could be forced to purchase more costly brand-name versions.
Helen Stevenson, an executive with the Drug System Secretariat, said the government is negotiating with the manufacturers because of the "massive patient safety concerns" that will arise if the manufacturers follow through with their threat to withhold some drugs.
Meanwhile, some of the pharmacists caught in the crossfire say they are already selling some of these drugs at a loss.
Pharmacist Neil Bornstein says he is buying generic drugs from the manufacturer at a higher price than what the government is reimbursing him.
"If [drug companies]don't lower the price they're selling at, then I'll be mandated by law to lose money," said Mr. Bornstein, who owns West Hill Pharmasave and Compounding Centre in Scarborough.
"My only other option is to refuse to sell the drug to my patient, but even then, I can have my licence revoked for malpractice."
The controversial legislation, Bill 102, allows the government to use its massive buying power to press pharmaceutical companies to discount their products and make it easier for druggists to replace brand-name drugs with generics. The government hopes to save nearly $300-million through these changes.
What pharmacists are most upset about is the part of the legislation banning pharmaceutical companies from paying rebates to them for shelf space. The government estimated that such rebates totalled about $200-million a year.
But Mr. Bornstein disputes the ministry's figures, saying banning the rebates cuts more like $500-million a year from pharmacies' revenue, which is mostly used to pay staff salaries and rent.
He said that since the legislation has been in effect, he has already had to lay off one full-time staff member at his pharmacy and is holding off on ordering new stock because he can't afford to sell at a loss. It could mean that patients might have a hard time finding the drugs they need, said Mr. Bornstein, who predicted that, if the dispute it not resolved, "pharmacies will close, our hours will be shortened, the public's access to a pharmacist is going to be diminished, . . . and it's going to ripple through to health care."