The Price of Cheap Drugs

Ontario wants to keep the price of generic drugs down, but how will that impact the services offered by pharmacies?

There has been a lot of talk lately about how the Ontario government is going to force the lowering of generic drug prices. The government says the move will mean about $500 million in savings. That is a pretty compelling number. But how will it impact the pharmacies, the pharmaceutical manufacturers, and, ultimately, the consumer – you and me?

Pharmacies say that lowering the drug price and eliminating professional allowances (the amount paid to a pharmacy by a drug manufacturer to stock their product) will have a huge impact on their profits. They claim that if these changes happen, they will be forced to lay off staff, cut services like home delivery and patient counseling, reduce the number of locations, decrease hours, and raise dispensing fees.

The pharmaceutical companies, meanwhile, say that if the government is only worried about price when it comes to generic drugs (as opposed to quality, supply, results, etc.), then they will no longer be able to compete with low-cost drug manufacturers.

Then there are the consumers who should be paying less for the drugs that they need, but at what cost? Is it worth a lower price if the local pharmacy closes down and I need to walk an extra 10 minutes? What if the pharmacy closes at 6 p.m. and my kid gets sick or my grandmother needs medication in the middle of the night?

The key is to figure out a way to minimize the impact on all parties involved and maximize the benefits. The government needs to find a way to significantly reduce the risk that this decision will negatively affect services currently provided to consumers. Cost savings should not come at too steep a price. Do we need a 24-hour pharmacy on every corner? No. Do we need access to a 24-hour service in case someone gets sick in the middle of the night? Yes. So find the middle ground between what we have and what we need.

And what about the impact on hospitals? If 24-hour pharmacies close down, are more people going to visit hospitals in the middle of the night?

Pharmacies will need to figure out how to offer services at a lower cost. This could be made possible by government subsidy or support. Pharmaceutical manufacturers will have to find new ways of adding value for the pharmacies and the customer. Why can’t they perform the home delivery or provide resources for patient counseling? The consumer may need to get used to a system not as convenient as the current one.

I am all for change. I just hope that we are not trading quality of care for the almighty dollar on something as important as health care.