Thursday, April 29, 2010

Small pharmacy is really screwed, but that doesn't mean I can't be only a little screwed.

So, it's been a while since I last posted.

What's happened since then? Well, I've had some excitement in my personal life, but this is not the forum for that.

And in my professional life, well, all has gone to hell, as they say. The Ontario Government has decided they aren't happy with how well the retail pharmacy industry is doing these days, so they've decided to slit our wrists, give us a bandaid, and let us all bleed out slowly. And by "us" I mean pharmacists in Ontario. Go to www.stopcuts.ca or http://ontario.communitypharmacies.ca for more info. Educate yourself, but in the meantime, here's my take.

The government has announced they will be eliminating all forms of professional allowances to pharmacies from generic drug companies (which is about 750 million bucks/year), while slashing the allowed cost of generic drugs to 25% of the brand name price. They did, however, agree to increase the Ontario Drug Benefit (ODB) reimbursed dispensing fee from $7 to $8 - which is very nice since they've only increased it by $0.56 over the past 21 years. Hrmmmmm....maybe its cus they knew the funding model for drugs in Ontario was screwed up and they were okay with letting pharmacies and generic drug companies work out their own deals. So now the government wants a piece of the action...or probably is thinking, "if we can't have a piece of the action, no one can". They did agree (but haven't given specifics yet) to fund pharmacists for the provision of certain professional services. Who knows what that will be and how much it will pay or even when it will take effect.

Bottom line is this: they are removing about $750 million from the industry and only giving back $250 million....where the heck is the difference coming from? The answer is the public. The innocent bystander who hears from their elected government that they will be saving money on drugs. But if pharmacies are going to lose money on every prescription they fill, either someone will pay, or pharmacies will start cutting back and going out of business.

It's happening already. People are getting laid off. Hours are harder to come by. Previously free services are being charged for (eg, $5 per delivery of a prescription). And the smaller pharmacies who aren't 17,000 square feet with 5000 square feet of high end cosmetics (and aren't receiving kickbacks to stock those cosmetics, by the way), will get hit the hardest. The independent pharmacy. Not the large/public corporations like Shoppers Drug Mart or Rexall Pharma Plus (Katz Group).

Thanks Premier Dalton McGuinty and Health Minister Deb Matthews....you have officially solidified your role in Canada's history as the government that destroyed the pharmacy as we know it, and as we have known it for the past 20 years or even longer. Wait you two. One day soon you or someone you love will likely need a pharmacist... And by then these changes will have had time to have their full effect on the industry. And when you need the assistance of your pharmacist and don't get it or have to pay out of pocket or have to wait a very long time, I hope you curse yourself. I can only imagine what you would do if someone came along and said "you are not allowed to make the salary you have been getting for the past 20 years anymore, so now will earn 50% less for yet to be determined increase in workload." Ya, good luck with that.

I'm not really all that upset with making changes. Seriously, I agree we need lower drug prices. I'm just upset with how they went about doing it. The government created these "professional allowances" in 2006...it was their idea!! And now they are making pharmacists look bad for using that. And they are being vague and unwilling to negotiate or discuss possible resolutions with any of the pharmacy associations/groups. They are making drastic changes to and industry they know little about. And just because they pay for the largest insurance plan in the company and want to reduce their debt, they figured that by paying less for drugs, their debt will decrease. So why not legislate lower prices? Genius they thought. Meanwhile they will screw millions of people in the coming years.

Until then, I'm not going to let you burst my bubble. I am still going to open my own pharmacy. I will modify my business model to account for your stupidity and arrogance and future inevitable stupidity. I will do whatever I can to prove myself and the services I provide to my patients are worth their time, loyalty, and business. I will let them know that the government doesn't really care about anyone but themselves. I will succeed whether you try and stop me or not.

That was my rant on the current situation in the retail/community pharmacy industry in Ontario.

Until next time,

The Canadian Pharmacist.

5 comments:

  1. That really sucks -- in particular, the government shouldn't be able to stick their nose into the pricing for private payers. To be honest with you though, I've never really grasped the whole drug company 'rebate' thing to Ontario pharmacies for carrying only their brand. It seems like that situation presents some abuse potential... maybe I'm wrong, or (more likely) I just don't understand the system.

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  2. Thanks for reading!
    Ya, it does suck. There has definitely has been abuse...but its a long complicated history as to how these rebates came about.

    I will try and explain in a future post.

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  3. Yeah that does suck. I was reading about those Ontario changes in my normal sleep deprived internet searches but it is nice to have an insider's perspective. Things aren't any better for pharamcies south of the border in the U.S. if that makes you feel better.
    So if I read your post correctly you are opening an independent pharmacy of your own? I hope that such a venture has better chances of success there that it does here in the U.S. Unfortunately for both of us factors that are out of our control have lowered the feasability of the retail pharmacy business model.
    Thanks for the post though. It explained the situation there better than the information I found. Good luck with your store!

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