Provinces’ new weapon against pharmaceutical costs: each other

As British Columbias health minister Mike de Jong has seen it time and again: A pharmaceutical manufacturer launches an expensive new drug, brings forward a patient who desperately needs the medicine but cannot afford it, and pressures the province to cover the cost.

Suddenly, though, the balance of power in Canadas multi-billion-dollar prescription-drug system is shifting, as provinces and territories begin an historic push to combine their buying power and jointly bargain down the high cost of pharmaceuticals.

Not unlike department-store chains bulk-purchasing washing machines or televisions, all the jurisdictions but Quebec have combined forces to negotiate the price of a series of new medicines to be covered by their drug plans, and hope to make the process routine in future.

Analysts call it a unique case of cross-border collaboration between governments that typically run their health-care systems as distinct fiefdoms.

The territorialism that we see has developed over the years, if not the decades, said Mr. de Jong. It is a remarkable feature of the Canadian federation that something that would seem so eminently logical has taken this length of time to become a reality. But it has, and thats good news.

The minister said he wants to push for another concession from the pharmaceutical firms, too. Industry now insists that the price produced by the haggling be kept secret, but taxpayers have a right to know, Mr. de Jong said.

Canada spends about $26-billion annually on prescription drugs, making them the third-largest health care cost after hospitals and doctor services. Provincial drug plans for senior citizens and others pay 46% of that total, private insurance and workplace health plans 36%, and uninsured patients 18%, according to the Canadian Institute for Health Information.

As drugs are added to the formulary, we want to negotiate a common [national] price

The bulk-pricing talks began last year after premiers instructed their health ministers to negotiate jointly for Soliris, the only drug available to treat PNH, a rare and often-fatal blood disease that affects just 90 people across Canada.

The price tag of about $500,000 per year makes it the worlds most expensive medicine, according to Forbes magazine. Working together, though, the provinces managed to secure a deal significantly less than what the company had started with, said Judy McPhee, pharmaceutical-services director with Nova Scotias Health Department.

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Provinces’ new weapon against pharmaceutical costs: each other