Quebec Says It Could Save Hundreds Of Millions If Ontario Cuts Drug Costs
MONTREAL — Quebec is rubbing its hands in anticipation of Ontario's plans to limit prescription drug costs, which could trigger millions in savings for its own cash-strapped health system.
Quebec's health minister says the province would be in line for hefty savings if Ontario adopted a bill to lower prices by eliminating payments to drug stores by generic drug-makers.
"If we follow Ontario's example . . . Quebec will automatically benefit," Yves Bolduc told the provincial legislature Wednesday.
"There will be economies of scale."
Bolduc is under pressure from Quebec's opposition parties to mimic Ontario's aggressive approach to reining in drug costs which, while appealing to many, has inflamed pharmacies and drug-makers.
So far Bolduc has resisted committing to a similar policy, insisting instead that Quebec will benefit regardless, thanks to its agreement with pharmaceutical companies to pay the lowest price in the country.
The 2006 deal assured Quebec the "best available" price, in exchange for other concessions by the province.
Bolduc estimated earlier this week that Quebec could save "hundreds of millions of dollars" from Ontario's proposed price controls.
The Parti Quebecois opposition claims Quebec would save as much as $300 million per year if it followed Ontario's lead.
It says that's a more appealing option for easing the financial strain on Quebec's health system than the Charest government's new annual $200 health tax, which is to be in place by 2012.
Ontario estimates its plan, which would cut generic drug prices by 50 per cent, will save the province $500 million a year.
But Ontario's health minister is warning her provincial counterparts that its low prices may prompt chain drug stores to seek higher profit margins in other provinces.
Deb Matthews sent a letter on Tuesday that cautioned other health ministers to be aware of the cost implications of Ontario's plan.
"I am told that once our reforms are complete, pharmacy chains could bulk purchase lower cost generic drugs in Ontario and then sell them to consumers in your province at the regular price," the letter said.
"Not only would big chain pharmacies benefit from an increased profit margin, but they would also likely be able to collect professional allowances from the generic manufacturer."
Given the issue creates "new distinctions between jurisdictions," Matthews proposed it be discussed at the next Federal Provincial Territorial meeting in September.
Bolduc's office did not return calls seeking comment on the letter.
Quebec is also concerned by recent reports that suggested Ontario had entered into a series of secret deals with brand-name drug manufacturers in another effort to reduce drug costs.
That has raised the possibility Ontario was getting a better price than Quebec, violating the province's agreement with drug manufacturers.
"In Ontario there are allegations, but only allegations, about brand-name companies," Bolduc said Wednesday.
"We're verifying the facts and if it's shown by facts, not allegations, that we didn't pay the lowest price, then we'll take the necessary steps."