Shoppers Drug Mart blackmailing Ontarians?

Michelle wrote:

P.S. I'd love to hear from Sineed on this...even if you disagree with me on this!

I haven't worked in retail for a while, and I'm no fan of Shoppers (I worked there 12 years; when people ask me how I like my current job, I say, "It's better than Shoppers Drug Mart.")

That said, you're not getting a balanced viewpoint in the media (are we all now falling over with surprise?)  For instance, the other day, they kept saying on the hourly CBC radio news reports that "Shoppers Drug Mart CLAIMS their pharmacists were participating in a teleconference..."  That was a real teleconference; I was invited to it, as was every other pharmacist in Ontario.

Here's part of it (it's a bit technical, sorry): the dispensing fees for Ontario Drug Benefit (that's social assistance, the elderly and disabled) don't cover overhead costs.  Say your costs are about $8-9 per script to fill an rx, and you charge a fee of $10.99 (that's on top of the cost of the drug).  But ODB, a large part of pharmacies' business, only pays up to $ 7 per script, and there's a $2 copay for low-income seniors, social assistance, and ODSP that many pharmacies voluntarily eat, so they get only $5. 

I'm kinda busy, so I'm going to cut and paste this from the Ontario Pharmacists' Association:

Quote:

For all generic drugs purchased through Ontario's public drug plan, generic drug prices would be reduced by 50 per cent, to 25 per cent of the cost of the original brand name drug. 

<snip>

Pending legislative approval, all professional allowances paid by generic companies to pharmacy owners for drugs purchased through the Ontario Drug Benefit Program would be immediately eliminated. All other professional allowances would be phased out and completely eliminated by 2014.

"These funds are critical to helping pay for patient care not covered by dispensing fees," Miller said. "We were very concerned to hear comments made by the government that suggest that pharmacists have used professional allowances inappropriately, implicating the whole profession for the misdeeds of a small number of individuals."

So these fees have helped pay for things dispensing fees don't.  The government plans on partially mitigating this by increasing the fee on ODB rxs by $1,  but as I mentioned above, these fees were cut by $2 years ago, by the Mike Harris government.

Bottom line: once again, the government is attempting to control health care costs by cutting compensation to front-line health care workers.  The bottom line of drug companies will NOT be affected by this (contradictory to what Sid Ryan says.  Though he never let his lack of knowledge of a subject keep him away from a microphone before.  But I digress.)

The government says they'll be putting $100 M into a fund for expanded pharmacy services, esp in rural areas.  But short term: little pharmacies, the independents who have small front shops and mainly focus on professional services rather than selling perfume, cosmetics, toilet paper, food, lottery tickets, etc, will be hurt the most.   An OPA member figured out it works out to an average loss in revenue of $300,000 per year per pharmacy.

Michelle wrote:

I agree with you that Shoppers has every right to protest this way.  And, of course, the public has the right to go to other drug stores.  Or maybe organize a movement to go to other drug stores.

Sorry Michelle, but I want to quibble with you. Maybe this is better suited to the word usage thread, but I hate seeing people refer to corporations or other non-biological entities as having rights. It is an entertaining fiction that corporations are considered persons for some legal purposes... but let's try to keep this fiction in the realm of academic jurist thought... asserting that corporations have "rights" really cheapens the whole concept of rights as they apply to real, flesh and blood, people.

I am not too happy about the amount of work the avarege pharmacists provide for the customers. ¸Maybe there is a city and rural divide, because while I visit the pharmacy regularly, I never receive any services.  I feel that it would benefit me personally if the cost of generic drugs are lowered, they are too high. But i also do not really require any assistance from the pharamcist, i just want to have it and leave.

Michelle, I think the roundabout logic is that eliminating the allowances would lower the overhead for pharmaceutical companies, thus allowing them to sell at lower prices wholesale with the savings passed on to consumers.  Sineed's position that the pharma companies will simply pocket the difference seems plausible unless they've worked out some sort of deal with the government that requires them to lower prices.  The assumption that removing the allowances would lead to higher retail prices to compensate is also reasonable, although it may not be possible depending on how the industry is regulated.  The possibility that front line workers could end up taking the burden of this seems realistic.

The list of Dalton McGuinty's mistakes is growing.

Michelle wrote:

What I don't understand is why generic drugs would cost less if the allowances ended.  Wouldn't pharmacies simply raise the price of the generic drugs they sell to cover the cost of the dispensing fee?

We aren't allowed to do that - drug prices are set by the Ministry of Health and LT Care in the Drug Benefit Formulary.  Besides which, even if we tried charging Ontario Drug Benefit more, they still would reimburse us with whatever they like.

Shoppers Drug Mart has a bit of a credibility problem - back when the government was banning cigarette sales in pharmacies, they launched a dramatic doom-and-gloom campaign, saying it would have devastating consequences, there would be pharmacy closures all over Ontario, small towns would have no drugstores, etc.  Turned out to be total bunk - a year after the ban, more pharmacies opened in Ontario than in the previous year.

At that time, Shoppers was owned by the same shadowy mega-corp that owned Imperial Tobacco.

Augustus wrote:

I don't understand why Dalton McGuinty wanted to stir up this mess.

I work for the Ontario Government; not at a policy-making level, but I have an idea: basically, the government is in a tight financial spot, and has sent out word to all the ministries to find savings wherever they can.  Ontario Drug Benefit, the drug plan for seniors, social assistance, and the disabled, is a HUGE expense for the government. Whoever finds savings will score major brownie points with the bosses. 

It's not about Dalton - it's about civil servants looking to get promoted.  Recall that Ontario Public Sector managers have had their wages frozen.

It's combination of factors: the government's push to find savings, the freezing of manager's wages, and the enormous expense of ODB.  I don't think there's anything nefarious in it, and if they can offer recompense to pharmacists in some other way, we'd be open to that.  But Matthews' statements implying that pharmacists in Ontario have some enormous scam going, where we're getting "kickbacks" from big pharma is ill conceived.

Sineed, I'm sorry, that didn't answer my question. 

To me, the way I read your sentences, you make it sound as if public servants are pushing policy through the system to only benefit themselves. That like insider trading,... isn't it? 

I don't know the business of pharmacy enough, but I know as a small businessperson myself, that any industry should not expect to unfair policies to be put in place.  The indignant shock in response to this move... did the same groups speak out when other businesses were similarly stomped on, despite common sense?

Here's the Ontario Pharmacists' Association technical briefing:

http://www.opatoday.com/documents/2010%2004%2008%20Media%20Technical%20B...

Quote:

The McGuinty Government is cutting $750 Million, over a billion from our industry in 2011, that figure will increase annually, and the cumulative total over three years, in excess of $3 Billion. This massive cut removes the equivalent of three pharmacists from every  pharmacy;  three pharmacists who will no longer be available to help the people of Ontario with their healthcare needs. 

This cut does not hurt "Big Pharma" in the slightest.

I'd be inclined to consider rebates paid to the government a form of tax unless there's some type of corruption going on.  My understanding of all this is that phamacies were being partially funded by pharmaceutical companies and now the government is cutting this funding.  It's essentially a backdoor service cut.  I'm trying to wrap my head around the government micromanaging the private sector like this.

ETA: Or perhaps looked at differently the government is lowering the price of drugs and insisting that pharmacies pay for the lowered cost.

Charter Rights wrote:

Like every business - including mine - things change that alter the market.

As a businessman, how would you feel if the government stepped in and dictated the terms of your arrangements with your suppliers?

Pharmacy is a unique profession in that pharmacists (in retail) are both businesspeople, and health care professionals.  Pharmacy is a highly-regulated business: the government limits what prices pharmacists can charge, the physical size of pharmacies,  and who is allowed to own pharmacies.  There is practically zero wiggle room for the sort of innovation businesses might use to sustain themselves during a recession, and profit margins are narrow - it's the drug companies that are making the big bucks, not pharmacists.

I haven't worked in retail for more than a decade for many reasons, including some of those I've included above.  And I'm not alone.  I know a pharmacist who now owns a couple of Starbucks franchises - he says there's less hassle from the government.  A pharmacist in my neighbourhood says he's going to sell his client list and hightail it to Alberta.

Basically, pharmacy is unique in that the government can ruin your business with the stroke of a pen.

And who is really going to see savings?  Think of the big private insurance companies, who provide coverage for most working people.  

Good article by Andre Picard at the Globe:  "Cheap drugs?  There's a cost"

Quote:

The kickbacks system had to go. But it existed because government drug plans do not pay pharmacists a reasonable dispensing fee. An Ontario physician can bill $11 for renewing a prescription over the phone, and more than double that amount for doing so in person. Why should a pharmacist be paid a maximum of $7 to actually fill the prescription? (Under the reform, that amount will rise to $8 in cities and $11 in rural areas, which is still inadequate.)

The most disconcerting aspect of the new policy, however, is how it was implemented. The Ontario government essentially big-footed and bad-mouthed pharmacists; it would never dare use such bully-boy tactics on physicians or nurses.

http://www.theglobeandmail.com/life/health/andre-picard/cheap-drugs-ther...

Pharmacists can save money for the healthcare system - the Ontario Pharmacists' Association has a proposal to expand pharmacist's services (link below), allowing them to do things pharmacists in other provinces already do.  The OPA estimates these savings at nearly $500M.  But the government doesn't listen to us.

http://www.opatoday.com/newsdetail.asp?newsid=52

I had a prescription filled at Zellers once.   Everything was fine, but I dropped it off at the start of the day, and picked it up near closing, and the same pharmacist was there.   That's a twelve hour shift, and studies have shown that no matter who you are or what you are doing, 12 hour shifts are not conducive to error free work.   But, maybe she was doing a split shift for all I know.   Still, it made me wonder.  People have been killed and maimed by errors in prescriptions.

We are going to see a lot of this in the coming year or two, not just with pharmacists but with anyone else on the government payroll or subsidy list who isn't a close personal friend of the Liberal Party of Ontario. 

There's  a bonus plan for them.

Fact is, Ontario's revenue is down, and is going to stay down for a good, good long time.  Manufacturing has been decimated, and what jobs return are substantially lower paying jobs, with less benifits and much less security with the result being less tax flowing to the government.

Pharmacists, Doctors, Nurses, Professors and anyone else who recieves money from the Provincial government, be it in terms of pay or grants or subsidies must surely realize they are going to be taking a hit, too.

Except, as I mentined already, the good friends of the Liberal Party of Ontario; they are secure in thier position high upon the hog.

[url=http://www.socialistproject.ca/bullet/342.php]Joel Lexchin: Ontario's Big Pharma Drug War[/url]

Here's the problem: the government's proposed legislative change proposes that generic drug reimbursements are capped at 25% of the generic drug price.  On the Ministry of Health's website, it states that generic drug costs are much higher in Ontario than they are in the US and New Zealand.

I'm still waiting for the New Zealand pharmacists to get back to me, but I've been in touch with American pharmacists who inform me that American generic drugs are manufactured in India.  I suspect, given their proximity to Asia, that it's the same with New Zealand.

Ontario generics are mostly made in Ontario.  The generic drug industry employs 9,000 people in this province.  If the province caps reimbursement on the basis of drug prices in other countries who get their generics manufactured in Asia, the generic drug industry may become unsustainable in this province.

The biggest generic manufacturer, Apotex, employs 5,000 folks in this province.  A pharmacist at last Thursday's Queens Park rally told me that Apotex has said they will relocate to India if this legislation goes through.

On other fronts, Sid Ryan has suggested that the province respond to Shoppers Drug Mart by following the Irish example and establish publicly-run pharmacies:

http://www.opseu.org/notices/OFL-april-13-2010.htm

Quote:

Ryan noted that the OFL is not prepared to watch this initiative fail and that there are numerous solutions and actions to be discussed with OFL membership.  “In the meantime, if Shoppers Drug Mart refuses to provide services, we are calling on the government to step in.”

Sid Ryan, OPSEU, and the OFL assumes that pharmacists and pharmacies are the whole reason why generic drugs cost what they do.  I'm still working on the numbers, but there's the possibility that thousands of jobs in Ontario are put at risk by this legislation.

Anybody have any idea if the generic drug industry in Ontario has unionized workplaces?  I'm assuming no - surely Sid Ryan, Smokey Thomas, etc, would not favour legislation that has the potential to threaten union jobs.