Dear Owner,
In December of 2007 – Pharmacy Owners had their businesses threatened by a regulatory
change in the Pharmaceutical Services Act. Please review below.
Interchangeable Drug Products Formulary
Regulations, 2007
under the
Pharmaceutical Services Act
(Filed December 20, 2007 )
Under the authority of sections 19 and 52 of the Pharmaceutical Services Act, I make the
following regulations.
Dated at St. John’s , December 20, 2007 .
Maximum price
5. (1) In accordance with section 23 of the Act, the maximum price listed for a drug
in the formulary shall not exceed the price listed for the same drug as published in the
formulary to the Ontario public drug program, plus an inventory adjustment fee set by the
minister.
(2) A guaranteed price submitted by a manufacturer under subsection 23(1) of
the Act which exceeds the price listed for that drug published in the formulary to the
Ontario public drug program does not comply with subsection 23(2) of the Act and that
price shall not, under the authority of subsection (1), be accepted by the minister as a
price at which to list the drug in the formulary.
(3) Where a guaranteed price submitted by a manufacturer is not accepted by the
minister under subsection (2), for the purpose of setting the maximum price at which a
drug may be listed in the formulary, the minister may substitute as the price for that drug
the price listed for the drug as published in the formulary to the Ontario public drug
program, plus an inventory adjustment fee.
Commencement
7. These regulations shall come into force on January 1, 2008.
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This arbitrary change would have resulted in a loss of revenues from the dispensary
equaling as much as 25%. It also raised a real concern with respect to the power of one
Minister to control our businesses with the stroke of a pen – with or without consultation.
At that time several business owners from around the province got together and planned a
strategy to delay or reverse this extremely negative law. It was decided that we
recommend the retention of Dr. Wade Locke to complete an Activity Based Costing
(ABC) study – which would demonstrate the catastrophic economic consequences of
enacting such a regulation. The Board of PANL approved this direction and that work is
moving forward.
It was also decided to produce an enabling document for government members – to assist
in their understanding of our enterprises and how such a change in law could severely
damage our investments and deter future growth and expansion in communities around
Newfoundland and Labrador.
While this paper was being produced several of us wrote and/or met with government
MHA’s and Cabinet members to request a delay in the implementation of the new
formulary pricing, These actions were successful and we received an additional 45 days.
From there we distributed the enabling document and further requested an additional 90
days in order to put in place a policy and legislative package for the government to
consider. During this time many of us met with or telephoned government members and
specific Cabinet Ministers to further advance our concerns. This resulted in a delay of
implementation for 9 months to January 01-09.
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A cursory calculation demonstrates that these postponements have resulted in the savings
of 20 million dollars of revenues for our business operations.
Over this three month period many of us discussed the possibility of having an advocacy
group dedicated to community pharmacy owners. This is a concept which has worked
well in other jurisdictions and one we feel would protect against negative legislation and
assist in the development of new opportunities for our enterprises.
First let me state that we continue to support PANL as an advocacy group for all
pharmacists. This initiative is to separate the business component from the profession of
pharmacy as a whole. This new organization will be dedicated to community pharmacies
– as businesses that contribute significantly to the economy of our province.
The Council of Independent Community Pharmacy Owners of Newfoundland and
Labrador (CICPONL) is being established to expand government relations to include the
portfolios of Business, Innovation Trade and Rural Renewal, Human Resources and
Employment, and Finance. Our objectives are to:
1. Seek amendments to the Pharmaceutical Services Act and the Pharmacy Act
which – if adopted would see – formulary price changes (regulatory) become the
responsibility of the Lieutenant Governor in Council (Cabinet) instead of at the
sole discretion of the Minister of Health and Community Services. In this way our
financial concerns could be appropriately addressed to the Minister of Business
and other portfolios aforementioned – before a decision was taken that would
reduce our revenues. As it stands now the Minister of Health and Community
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Services runs our dispensary and for all intents and purposes is the only individual
who can accurately project our revenues.
2. Seek amendments to the audit process resulting in procedural fairness and a more
accurate reflection of our receipts. Many pharmacy owners have expressed
concern over both the length and method of the process.
3. Develop government relations in a way which addresses all aspects of our
investment and growth potential. Over the coming few years the role a pharmacy
plays in continued health and wellness in our communities should expand and
provide positive investment opportunities for our businesses. This new Council
would seek to meet with Ministers at least twice a year to advance and promote
our role in delivering health and wellness objectives while achieving savings for
government.
4. Develop media relations focused on the objectives of the pharmacy as a
community partner in health and wellness and demonstrate the significance of our
enterprises in employment growth and stability – especially in rural areas –
investment and rural development – and the pharmacy’s role in finding
efficiencies in the health care system. To this end we will issue regular News
Releases and when necessary hold a News Conference – and we will appear each
year before the budget consultation committee. Last week the NLMA made public
concerns regarding the cumbersome process of special authorizations for
prescription drugs. We would in future speak directly to issues which impact our
client base directly.
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5. Research and compile information demonstrating trends in the business of
pharmacy from all jurisdictions while developing our own for presentation to
government. This includes participation at the federal level. As pharmacies are
anticipated to expand services over the next decade to reflect the changes coming
in healthcare delivery we must be prepared to protect the investment required by
owners to achieve these transfers of responsibility.
6. Develop a mentoring program for individuals who wish to operate a pharmacy
and develop tools and common practices for those already in the business.
It is important to note that other professional sectors have already separated business
operations from their professional advocacy – most notably the Newfoundland and
Labrador Construction Association. While engineers and trades-people have their own
professional associations – if they are also business owners the NLCA speaks for them on
matters of business.
It is important that government recognize that as business owners – albeit in a regulated
profession – we will protect our investments and seek to find areas of growth while
remaining profitable. The tendency has been to restrict us to the portfolio of Health and to
ignore the other contributions we make to the economy.
In the past pharmacists for the most part were all business owners and as such one
association sufficed to advocate for improvements and growth in our sector. Today we
represent only 1/3 this number seems low of the PANL and therefore objectives have
necessarily changed to reflect that percentage. These changes have also been reflected by
the formation of associations for pharmacies operating as part of a chain.
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Currently we have commissioned the development of a legislative and policy package to
be delivered to government by July 07-08. This action is being taken to allow
government time to review and discuss with us an alternative to the proposed formulary
changes. It will also outline other concerns aforementioned and include options for
government which would see the expansion of our services while allowing cost savings
for the Department of Health and Community Services.
A meeting to review the draft documents will be held with pharmacy owners toward the
end of June. Further details should be available of the exact date and location over the
next couple of weeks.
We are also drafting a constitution – mission statement – and membership forms as we
move forward to formalize this Council of pharmacy business owners. We look forward
to your participation and trust you will find this initiative positive for the health of your
enterprise both in the short and log-terms.
For further information please contact:
Wayne Morris
Robert Doyle
Phil O’Keefe
Dwight Ball
Acting Board of the Council
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