The Doug Ford Impact on Pharmacy
Doug Ford and the Progressive Conservative Party of Canada have been in office for nearly one year, and since being voted in as Premier, he and his party have looked to make cuts in many areas of the Ontario Budget. Child care and education budget reforms are causing an uproar and are at the forefront of media coverage. Pharmacy was also not spared in the budgetary changes that either already have been legislated, or are proposed to be legislated as laid out in the 2019 Ontario Budget. Let’s detail how these changes affect pharmacy, and the analyze each amendment for the good and bad.
What Ford’s government has already implemented
Reconfiguring of the OHIP+ program
The 2019 Ontario budget outlined multiple times throughout the document that there were going to be changes upcoming to the OHIP+ drug program. Effective April 1, 2019, children and youth under the age of 25 who are not covered by private plans will continue to receive coverage for eligible prescription medications from the government; children and youth who are covered by private insurance will bill those plans. Under the previous program, all patients under 25 with a valid health card were automatically eligible and enrolled and had 100% coverage for all medications that fell under the umbrella of the provincial plan.
The Positives
Current markup limits for medications covered under the public drug plans participating in the NPDUIS initiative vary from province to province. In Ontario, the maximum markup is 8% for all medication claims up to $1000, and 6% thereafter. A new markup plan has been proposed for by the new government for these plans where there will be a 10% markup for prescriptions <$100, and then a decreasing markup thereafter according to increasing price (this proposal will be analyzed in a later article). For patients not covered under the provincial plan, pharmacists are free to charge whatever they deem to be fair, reasonable and appropriate in their own circumstances, while upholding the OCP code of ethics.
This means that the markup for OHIP+ aged patient’s who either have no coverage or have private insurance can be charged a higher markup with each dispensed prescription, leading to increased profitability. Private insurances set their own limits to how much of the markup that they will cover, and any remainder of unpaid by the coverage plan can be passed onto the patient.
With the implementation of OHIP+ in its first iteration, a large number of dispensations had their markup percentage scaled back. This in turn directly impacted the inventory holding costs and ultimately revenue of pharmacies. The new OHIP+ regulations allow at least some of this lost income to be recouped as this move allows for increased markups for those patient’s not covered under the new rules. Figure 1 shows that in 2015/16, 5.4% of the total drug expenditure from public drug plans came from markup costs alone. If this number is representative of a capped 8% markup, then the percentage of drug expenditure for all other non-public dispensations would be significantly higher and thus generates more revenue for the pharmacy. The Ford government is trying to decrease expenditure in the drug program sector with a 2019–20 assumption of annual negative growth of 2.6 per cent, a figure that can be then assumed as a positive growth for pharmacies.
Changing OHIP+ is both positive and negative depending on the patient, the coverage, the indication, and the medication. OHIP+ added a lot of red tape in order to get things covered by requiring specific forms and codes which were covered by private insurance without any authorization previously. Having to mitigate these various authorizations required an increased amount of hours spent by healthcare professionals both in the pharmacy and in primary care as the number of patients on the public drug plan increased dramatically. The new changes decrease this number and therefore alleviate some of the burden to healthcare providers allowing for more time to be focused on actual care rather than documentation. On the other hand, many patients had partial coverage with their private plans and OHIP+ helped with financial burdens by giving complete coverage with no co-pay for the patients. Private plans also have the ability to limit which medications are covered, change the percentage of coverage, require extensive documentation from pharmacies and prescribers, and influence prescribing by having step-wise based coverage. For the patients that were negatively affected by this, they ended up with an easier way to obtain their medication without the burden of limitations that their specific drug plans offered.
The new OHIP+ changes also bring about, according to 2019 Ontario Budget, an annualized savings of at least $250 million which certainly will save taxpayers.
The Negatives
As someone who works primarily in retail pharmacy, the impacts of this change in legislation have already began impacting healthcare. Unless the OHIP+ eligible patient already has an active private plan on file at their pharmacy, there is no way to confirm that the patient has other coverage without asking the patient. The onus is on the pharmacy to prove whether or not the patient has private coverage by adding a special “U” code to indicate that the patient is OHIP+ eligible. This method unfortunately allows those patients willing to use poly-pharmacy tactics to fill provincially covered medications at one pharmacy, and all other medications at another pharmacy in order to avoid paying more for their treatments. This segmentation can cause serious healthcare issues, for example if a patient does not tell a pharmacy that they are on a medication where there is a significant clinical interaction. The pharmacist has no way of flagging the interaction and this has can cause increased adverse effects, improper treatment, morbidity, and even mortality.
With the new rules in place, younger patients have started experiencing a change in how much they pay for their medications. Many private plans do not have 100% coverage for all formulary medications and thus have left these patients with a larger medication bill. Through government coverage under the previous OHIP+ regulations, the use of and adherence to medication most definitely increased as the financial aversion to medicinal treatment was eliminated for many medications. This is especially important for biologics and nutritional products that carry with them a larger cost that the younger is unable to afford.
Some female youth with private coverages under their parents are also left vulnerable when wanting to use different forms of birth control. Many female patients do not want to use their parent(s) plan to access affordable birth control for a multitude of personal reasons. Using contraception may not be acceptable in some households and cultures, and the updated legislation may impact the ability of these young women to obtain these medications in a safe and private manner. In addition the use of IUD’s, which can cost in the hundreds of dollars, are covered for those qualified under OHIP+. If these medications are now not available at an affordable price to patients after the April change, affected women may not have the access to the IUD form of birth control if it happens to be their best choice for their circumstances.
As a side note: choosing April 1st, April Fools Day, as the day to stop covering a number of patients is both hilarious and cruel at the same time. I’m sure many patients and patient guardians must have thought their pharmacies were playing some kind of joke when they were told their medications were suddenly not covered.
What Ford’s government is considering implementing
Allowing private-label generic medications
Ford’s government is currently performing a Regulatory Impact Assessment to overturn the ban on private-labelling of generic medications by pharmacies. Since November 13th of 2013 the Supreme Court of Canada put the ban in place by ruling in favour of a decision by a Provincial Court to not allow pharmacies to sell their own brand of generics. The reason for this ruling was to stop kickbacks (at times up to 70%) and other forms of them (including professional allowances) in order to keep drug costs down and thus pass savings on the consumer rather than profit onto the pharmacy. On August 14th of 2018, Premier Ford had a meeting in his office with the executive chairmain of Loblaws Galen G. Weston, a meeting that may have serious outcomes on the landscape of pharmacy if it influences the ban to be lifted.
The Positives
Allowing an increased number of generics in the market will, at least in the short-term, drive down prices for the cost of these medications. The important thing to realize is that most of these savings should be passed onto the patient. The disallowing of private labelling has caused some generic manufacturers to discontinue the production of some drugs as they are deemed unprofitable, and some argue that this has contributed to drug shortage problem we are experiencing today. Only 72% of total shortages reported have been resolved, therefore opening up the generic market and having contract manufacturing agreements can increase the production and help alleviate the shortage issue to at least a minor degree. The government proposal also attempts to mitigate the Canadian industry-wide issue of oligopoly practices by ‘limiting the percentage of private label products that a wholesaler and/or pharmacy affiliated with the private label company, can purchase and sell’. This would try and stop any anti-competitive business practices of a few pharmacies gaining preferential purchasing contracts with manufacturers, and hopefully vice versa. It is an extremely important point to consider when there are pharmacies who are on both sides of the fence, such as Rexall who are owned by drug distributer McKesson.
Allowing private-labelling of generic medications can help increase utilization of generic medications over brand-name products by patients via a combination of pricing and marketing strategies. Decreasing the amount of money spent on healthcare is extremely important for the imminent future, and when the percentage of generic medications used is increased, the overall expenditure on both provincial plan and non-provincial plan payors can be be substantially lowered. For the government and for taxpayers this move makes sense in that if rolled out correctly, it will decrease the amount of dollars spent in the Ontario budget.
The Negatives
This move if implemented is a double-edged sword, as it will certainly help large chain pharmacies while potentially further pushing out independent pharmacies. Already independent pharmacies have to compete with larger corporations driving down their profits by offering lower costs to consumers via a multitude of different strategies. Larger pharmacies have stronger purchasing power to keep drug costs lower, and can afford to decrease their dispensing fees as they have other departments in their business that can offset costs. If the in-house brand ban is lifted, these corporation can sub-contract generic manufacturers such as Apotex and Teva Pharmaceuticals to produce their ‘in-house brand’. This can lead to preferential distribution for medications to certain businesses, which is especially important with the significant increase in drug shortages that have plagued the Canadian community. Though earlier we argued that allowing private-labelling may decrease drug shortages, if any pharmacy finds a way of preferred medication distribution, the drug shortage falls unfairly on those patients who are not consumers of those pharmacies.
For pharmacies that already have in-house brands of over-the-counter products, the lift on this ban means that they can increase market awareness of their trademark name as well as offer incentives to their patients to use their brand. A corporation that already has an infrastructure in place for contract manufacturing, marketing, graphic design etc. has a significant advantage over those that do not have these in place. Many provinces currently allow in-house brands, so companies that are established across Canada can expand this to Ontario, leaving an unfair advantage over smaller businesses. Currently in Ontario, in-house OTC products such as Costco’s Kirkland Signature already offer a price point that most other pharmacies cannot compete with, and this move may widen the gap. However if we look at the patient’s perspective, the cost savings could be beneficial, and the patient is supposed to be the focal point of healthcare.
Lastly, the lifting of the ban can set a dangerous precedent for further legislation that may lead to exploitation of the market by those players that can afford to do so. As mentioned previously, the reason the ban was put in place was to discontinue unfair business practices between pharmacies and drug manufacturers that left the province, taxpayers, and patients with extra costs. If the reversal of the ban is not rolled out very carefully with an eye for preventing circumvention, than we may very well find ourselves in the same set of circumstances that led to the initial ban in 2013.
Removal of the MedsCheck program
The Ministry of Health & Long-Term Care (MHLTC) is proposing the to discontinue most of the various MedsChecks that are presently a billable service that pharmacies can offer. The current types of these MedsChecks and their respective billable cost is listed below in Table 1.
The Positives
The requirements that the MHLTC have in place in order for a MedsCheck to be eligible to be billed are quite robust in terms of the documentation that needs to be completed. The program however does rely on the trust of pharmacists to properly and appropriately use the program in accordance to these requirements along with following the Code of Ethics, and thus has the potential for abuse for those willing to use the program improperly. There have been many cases in which pharmacists have billed MedsChecks without justification, without correct documentation, and without proper consents. The findings in the link only provide a fraction of the total amount of abuse of the program as only so much can be caught. The misuse of the program has a number different financial impacts that are ultimately causing an inefficiency in government healthcare resources. Firstly, the undue billing of MedsChecks has cost hundreds of thousands of dollars of taxpayer money that specifically had no effect on the wellbeing of the patient. When a MedsCheck is performed improperly, or sometimes even completed without the patient, then the use of the MedCheck is for naught. The program is intended for the benefit of the patient rather than the benefit of the person performing the MedsCheck, and the latter is often occurring simply for the financial gain of the pharmacist or pharmacy. Secondly, the investigation of improper MedsCheck billing costs both time and resources for the Ontario College of Pharmacists to perform, further increasing the financial detriment of the program when it is abused. Thirdly, the program has caused a push for increased MedsChecks in the pharmaceutical setting in private, chain, and long-term care pharmacies that lead to a profit-centric use of the program instead of the purposeful healthcare-centric model. This unfortunately changes how individual pharmacists approach the MedsCheck in terms of both the clinical side and amount of time spent with a patient. A proper MedsCheck should be a 20–30 minute private consultation with the patient, and in a busy pharmacy with only one pharmacist (a common example), the care provided will often not be up to standard. Pharmacists may be expected to complete a certain number of MedsChecks while managing the workflow of the pharmacy, which can have a negative impact on the healthcare provided by the pharmacist.
The Negatives
The near complete removal of the MedsCheck program both devalues the pharmacist and the pharmacy profession. Pharmacists are one of the only healthcare providers (especially those trained at the Doctorate level) that do not charge for their time when offering their knowledge, advice, and expertise. Community pharmacists especially provide counselling to any patient that has questions about their health, medications, or any general advice that may be under the umbrella of pharmacy. This includes everything from exercise/diet recommendations and discussing the use of over-the-counter products, to providing drug interaction checks and holding specialized clinic days that focus on education or risk assessment. Clinic days particularly can include a wide variety of different topics, for example blood glucose/blood pressure monitoring, diabetic nephropathy checks via microfilaments, and lung checks via peakflow meters. There are many more different patient checks that pharmacists provide free-of-charge, all of which would be billable under most other healthcare providers. You simply cannot walk into a podiatrist’s, dietician’s, dentist’s, or family doctor’s office without an appointment and at your own time and ask for healthcare advice or receive patient care without the practitioner being financially compensated. MedsChecks however provide a value for the pharmacist as a medication expert, especially the amount of time and understanding required to complete a medication review in its entirety. Pharmacists currently offer so much without charge and taking away the MedsCheck further minimizes the value of the occupation as a whole considering the merits that are required to be a successful practitioner.
There is no secret that completing a MedsCheck has elements of financial compensation as part of it’s structure, however the major component of the service is for the betterment of the patient. Most individuals would not provide a highly skilled service without compensation in their line of work, yet pharmacists must do so in their day-to-day activities. Removing a the compensatory portion of the MedsCheck service may demotivate pharmacists to provide such a robust and excellent service, or may even lead to medication reviews completed improperly. The time and care that a pharmacist provides knowing that the service that they are providing is valued to a degree is an understated yet essential aspect of being a pharmacist in Ontario. The disbandment of the program may then be to the disadvantage to the patient.
Furthermore, the MedsCheck program was implemented in order to help patients understand their medications better as well as introduce a system for medication reconciliation. The majority of pharmacists most likely use MedsChecks as intended and therefore have had a positive impact in society. The program is especially useful with patients that have a large number of medications with number of different prescribers and have a difficult time managing and comprehending their regimen. According to Institute for Safe Medication Practices Canada (ISMP Canada):
Medication reconciliation is a formal process in which healthcare providers work together with patients, families and care providers to ensure accurate and comprehensive medication information is communicated consistently across transitions of care. Medication reconciliation requires a systematic and comprehensive review of all the medications a patient is taking (known as a BPMH) to ensure that medications being added, changed or discontinued are carefully evaluated. It is a component of medication management and will inform and enable prescribers to make the most appropriate prescribing decisions for the patient.
Since being introduced, the MedsCheck has also been integrated into various health networks, especially in the hospital-community pharmacy relationship. Both pre-admission and post-discharge patients often require a MedsCheck that helps all healthcare professionals and organizations within the circle of care. Figure 2 shows the standard series of events that facilitate the MedsCheck/medication reconciliation linkage. The proposed changes mention keeping only one type of ‘reconfigured’ MedsCheck that applies to these situations, without detailing any of the changes that may be made. The reason that the changes do not have any recommendations is that ‘any regulatory amendments described are at the discretion of the Lieutenant Governor in Council who may make the regulations with any changes that the LGIC considers appropriate’. This means that legislative due process is not carried out when making any changes to the MedsCheck program. Of course the equivalent of a MedsCheck can still be completed before and after hospital visits, however as mentioned before, the value of pharmacists time may undermined due to the restructuring. Hospital admission and discharge MedsChecks are currently billable as a $25 follow-ups, however depending on the situation the patient may be eligible to be billed for a $60 Annual or $75 Diabetic review. Many pharmacists may either refuse to provide or improperly perform these hospital connected MedsChecks at the detriment of both the patient and the clinician if the revamping of this MedCheck is not executed correctly.
The importance of MedsChecks when used properly can have a dramatic increase in the wellbeing of patients as well as overall healthcare costs in society. There are many reasons for completing the service, including transitions of care, new medication regimens, multiple chronic conditions and/or medications, history of non-adherence, limited health literacy and hospital discharges to name a few. A proper action plan and follow up following a MedsCheck can help improve morbidity and mortality rates significantly.
Finally, the removal of MedsChecks may actually increase the healthcare cost in Ontario in the long-run in lieu of the short-term budgetary benefits. For patients 65 and older alone, a CMAJOpen study estimated $419 million in total was spent on potentially inappropriate medications outside of hospital settings in 2013. This does not factor in the entire range of the patient population, and neither does it include the pharmacist’s ability to diagnose certain medical conditions. The potential savings in healthcare costs using medication therapy management can be significant and the MedsCheck program is a useful tool in helping the cause along.
| NOTE: In part 2: We will discuss:
- Minor Ailments
- New Markup Tiered Framework
- Long-term Care
- $0.10 Administration ODB Fee
- CUSMA and biologics impact
