September 28, 2010
Pharma’s Market Access: SWOT’s Up?
On Tuesday, September 28th, Jadzia Ronald, PMCQ’s president welcomed a full house to the first dinner meeting of the 2010-2011 season. In association with Canadian Association for Healthcare Reimbursement, and under the auspices of the evening’s education sponsor, Lundbeck, the audience got the low down on the turbulent world of market access and healthcare reimbursement across Canada.
PMCQ Vice-President Dan Leger, Director of Marketing at Lundbeck, introduced the expert panel of Rosemary Bacovsky, President of Calgary-based Integra Consulting and former director of Health and Wellness Alberta; Deb Saltmarche, Vice President Pharmacy Affairs, Canadian Association of Chain Drug Stores; and Bernard Lachapelle, President, The JBL Group.
As Jadzia and Dan pointed out in their opening remarks, the topic of market access was a natural lead-in for the season because of the role market access and reimbursement play in the vitality of our business. As Dan reminded the group, we really are experiencing a seismic shift in pricing and marketing rules.
All three speakers brought their perspectives on the strengths, weaknesses, opportunities and threats facing Rx & D pharma as well as the generics.
Rosemary Bacovsky zeroed in on the discussions around a potential pan-Canadian pricing strategy where Ontario is taking the lead. Canada’s provincial and territorial ministers of health are anxious to develop a comprehensive policy for product listing agreements in an effort to control costs. Exactly what such a policy will entail is still up in the air, but will entail downward pressure on generics. That will mean that the comparators for Rx & D will be so much greater. In order to take advantage of this new environment, active participation in improved drug use initiatives is important. That means greater focus on primary care teams and the relationships between prescribers and pharmacists.
Deb Saltmarche underlined the fact that the current business model for chain store pharmacies is simply unsustainable. The pharmacist’s scope of practice is shifting from a transaction-based model to a service-based model where the margins really no longer exist. Stores are forced to find efficiencies in the system and reduce operating costs. Currently the cost of dispensing isn’t adequately covered anywhere in the country. Projections for Ontario stores runs as high as $300k losses per store in 2011 and $400k in 2012. The Blueprint for Pharmacy provides a strategy to bring clarity to what pharmacists and pharmacies actually provide Canadians. What are the regional differences? What are the enhanced services? The CACDS is focusing on a Canadian Pharmacy Services Initiative and on integrated technical solutions. The focus is on patient care delivery that can be adapted to each province’s requirements and involve an improved medication management assessment. CACDS hopes to make a white paper available soon on providing optimal patient care while adjusting the business model for pharmacy.
Given the pressure to reduce generic prices across Canada, what’s the perspective for innovative drug manufacturers? According to Bernard Lachapelle, the short term will provide a definite benefit. In theory it will allow governments to save on overall drug costs. So, the thinking goes, money can be redirected to new drugs. Not so fast, says Lachapelle. In the medium term it will make the gap with generics appear even greater. At the end of the day, the fundamental problem isn’t prices. The real culprit is volume. If you take Quebec, the cost of medications went from about $2.5 billion in 2005 to just under $3.9 billion last year. Yet the average cost of a prescription is going down. The volume of scripts, however, is up 7%. That issue doesn’t really get addressed when payers seek to beat down prices. To overcome the major hurdle of access and reimbursement, the process requires a lot more transparency than is currently available. That in turn requires that legislators regain some of the authority that they have allowed to slip to bureaucrats. On a positive note, there is increased stakeholder participation, but don’t expect clarity any time soon.
Mike Leo, of Lundbeck, then opened the floor to a lively exchange with the audience.