Independent Pharmacists Association of Ontario

IPO Fact Sheet

IPO FACT SHEET

Fast Facts

Almost 1 in every 2 pharmacies in operation in Ontario is an independent.
According to a recent Ipsos Reid poll, more Ontarians (97%) trust their pharmacists as a source of information about prescription drugs than trust doctors (95%), nurses (92%), provincial government departments (59%), and drug manufacturers (47%).
Independent pharmacists provide a variety of accessible, one-on-one health care services – from counseling and monitoring patients, to recommending disease management strategies – vital services that are largely provided free of charge and that help keep people out of doctors’ offices and emergency rooms.
For many Ontarians, their local independent pharmacist is the health care provider they see most often, and spend the most time with.

An Industry under Pressure

Community pharmacy is chronically underfunded. In fact, dispensing fees have increased only 89 cents over the past 15 years, leaving a huge gap (of about $7-8 per prescription) between the actual cost of dispensing, and pharmacists’ reimbursement covered by the public drug program.
Over the past two years, the Ontario government has introduced a series of reforms that have left independent pharmacies reeling, changing the way they can buy and dispense prescription drugs as well as how they are reimbursed for their services. Serious impacts include:

Reduced profit margins and expensive new reporting and service demands that mean pharmacists are spending more time filling out forms, and less time helping patients;
Restrictions on pharmacists’ ability to dispense blister packs – a vital independent living aid for many Ontario seniors;
Reduced profitability and sustainability for all independent pharmacies, leaving many with the difficult choice between continuing to lose money, close their doors for good, or sell the business – mostly to big box chain stores, which may lead to a pharmacy services monopoly.

It is difficult for any business to operate in this kind of an environment, where policy changes mean the business model – and annual financial plans – need regular readjusting. Not surprisingly, many independent pharmacists feel that their business – and way of life – is under attack.

The Transparent Drug System for Patients Act (TDSPA)

The Ontario Ministry of Health and Long-Term Care introduced the TDSPA in April 2006 to reform and cut costs from Ontario’s public drug system.
Many of the sweeping changes introduced through the TDSPA – such as capping manufacturer rebates, dictating how professional allowances can be allocated, introducing the MedsCheck program and more – came at a high cost to Ontario’s independent pharmacies, with some having to shorten hours of operation, employ fewer workers, delay filling prescriptions due to smaller inventories and fewer technicians and cut home delivery services for the infirm.
On average, Ontario pharmacies suffered a 34% loss in revenue in 2007, following the introduction of the TDSPA.
According to the Ontario College of Pharmacists registry, 14% more pharmacies were sold and 20% more went out of business in 2007 over 2006, numbers that are expected to increase in 2008.

New “Competitive Agreements” will Exacerbate the Problem

In July, the government announced that as early as October, it will enter into buying agreements with pharmaceutical manufacturers to supply some of the most prescribed generic drug medications to the province’s approximately 3-million Ontario Drug Benefit (ODB) beneficiaries, i.e. seniors and low-income Ontarians.

This new framework – developed without industry input – will negatively impact patient care and Ontario’s independent pharmacies:

Manufacturer allowances help pharmacies deliver patient services. Eliminating that funding means services will be reduced;
By dictating who supplies certain drugs, some ODB patients will be forced to switch to a different looking or tasting pill, which could cause confusion, particularly for seniors;
With only two suppliers, the likelihood of drug supply shortages increases significantly;
While the government may enjoy cost savings over the short term, reduced competition may lead to higher drug prices in the long term.

What These Changes Mean for Ontarians

Less choice – with fewer generic drug options for ODB patients and the prospect of fewer community pharmacies in cities and towns across the province.
A two-tier drug system for ODB vs. non-ODB patients, with ODB patients and their care-givers losing the right to choose which medications best suit their needs.
The prospect of less access to community health services, drug shortages, and spiraling drug costs for all Ontarians – exactly the opposite of what the government promised to achieve.