Government & policy

Provinces intend to form buying group for drugs

WINNIPEG – In the face of rapidly rising medication costs, Canada’s premiers are banding together to obtain more purchasing power when it comes to buying drugs and medical supplies. At their meeting earlier ths month, the premiers announced a plan to establish a national agency that would purchase $10-billion in prescription drugs a year, along with medical supplies and equipment.

Having one organization that’s responsible for drug purchases for all 13 provinces and territories would lower costs considerably, the premiers said.

Rising healthcare costs were a major topic of discussion at the premiers’ two-day annual meeting in Winnipeg. For the first time as a group, the premiers tackled the question of whether the country can sustain a system many Canadians appear to take for granted.

“We’re really just beginning to understand how much we can do together,” Ontario Premier Dalton McGuinty said at the closing news conference. “You can only go so far on your own.”

The McGuinty government has led the way in cracking down on the rising cost of generic prescription drugs. The province waged a bitter fight with pharmacy chains this year by cutting the price of generic drugs to 25 percent of the equivalent brand-name medication from 50 percent.

British Columbia and Alberta have also taken steps to reduce their prescription drug costs. But they have not gone as far as Ontario, leaving Canada with a patchwork system of drug-purchasing plans.

Setting up a national purchasing agency would allow the provinces and territories to buy more drugs for less money and divert those savings into other healthcare services.

“The provinces have to be innovative and find ways to offer services in the most cost efficient way possible,” said Manitoba Premier Greg Selinger, host of this year’s gathering,

The national purchasing agency was part of a two-pronged strategy devised at the meeting. The premiers also pledged to kick-start talks with the federal government over a funding accord that expires in 2014.

The federal government contributes about 20 cents of every dollar the provinces spend on healthcare. The provinces are slated to receive annual increases of 6 percent under the Canada Health Transfer program, which expires on March 31, 2014.

Posted August 12, 2010