How will community pharmacy fare under the new plans for remuneration to be published in final form soon by the Ontario Ministry of Health and Long-Term Care? That theme dominated both formal and informal discussions among delegates to the annual conference of the Canadian Association of Chain Drug Stores held here last month.


Ontario ministry of health, long-term care, Canadian, Association of Chain Drug Stores, Michael Decter, Health Council of Canada, Loblaw, Family Health Teams, Alasdair McKichan






































































































































































































































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CACDS eyes possibility of major changes in sector

June 7th, 2010
by Alasdair McKichan

TORONTO – How will community pharmacy fare under the new plans for remuneration to be published in final form soon by the Ontario Ministry of Health and Long-Term Care? That theme dominated both formal and informal discussions among delegates to the annual conference of the Canadian Association of Chain Drug Stores held here last month.

Concern extended beyond delegates representing Ontario pharmacies, since Ontario’s actions could set a pattern for the other provinces.

Michael Decter, now chief executive officer of an investment firm but formerly a deputy minister of health in Ontario and founding chair of the Health Council of Canada, offered his views on the opportunities and challenges the sector faces. He said significant change for retail pharmacy is predictable, since governments are under severe financial pressure.
He pointed out that over the next six years patents will expire on 31 major drugs, with sales of more than $44 billion (Canadian) annually, making generics pricing critical. Technology is changing fast, as are consumer expectations.

Meanwhile, drug spending in Canada increased from $3.8 billion in 1985 to $30 billion in 2009 — an average rate of 9.2% per annum — while hospital expenses increased by 4.8%.
The well-educated baby boom generation has begun to retire, and its members are proving to be challenging patients. They have strong consumer values and make new demands for the speed, quality and appropriateness of health services.

Decter predicted that the Ontario government will achieve most of the savings targets for drug costs that it established for itself, although there could be some compromise that would reduce the number of closures of pharmacies. For its part, the government is keen to facilitate price competition between brand name and generics manufacturers.

There may be a parallel, Decter postulated, between developments in banking and pharmacy. The ATM freed personal banking from the physical bank branch, so it is likely that technology will begin to allow dispensing to take place away from physical pharmacies.

While electronic prescribing is changing the relationships among retail pharmacy, prescribing physicians and patients, remote dispensing by machines linked to pharmacists will parallel telemedicine. In this scenario, dispensing from many more locations is probable.

The entire health care sector, not just pharmacy, is facing a new relationship with governments in their role as the sponsors and paymasters of health services. Although governments are facing increasing demands for health care services, they are also dealing with large deficits brought on by the recession and the credit crunch.

Health care is no longer a sacred cow immune from cost cutting. All providers, not just pharmacy, will have to negotiate new arrangements that bend the cost curve. Government’s messages to providers will be “quality” and “value for money.”

Drug stores can expect more competition from grocery chains. Decter referred to statements from the management of Loblaw Cos. that the company is viewing the new regime in Ontario as an opportunity to maintain or enhance customer service and thereby gain market share, and he expected other grocers to follow suit.

Decter also predicted an acceleration in competition between brand name and generics manufacturers.

Along with a new environment for community pharmacy, there will be opportunities. Governments are encouraging — and are prepared to pay for — pharmacists having a larger role within the health care system. Pharmacists will need to create a greater role for themselves within the developing Family Health Teams and other new organizational forms in Canadian primary care.

Pharmacists will be playing a larger part in disease management and patient education. They will be key players along with physicians and nurse practitioners in the way prescribing develops. They will have an expanded role in electronic prescribing as well.

Decter offered some advice on the strategies that community pharmacy should adopt as it deals with the challenges ahead:

• Anticipate change, prepare for it and continue to advocate for an appropriate new framework.

• Embrace value for money and quality.

• Utilize emerging technologies to strengthen pharmacy’s position and reduce costs.

• Recognize that baby boomers need high-quality information.

• Negotiate with governments to minimize both surprises and confrontations.

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