Drug stores, mail carriers, and Muskrat Falls #nlpoli

As your humble e-scribbler pointed out in August 2011, the province’s drug store owners lost their fight against lower drug prices for consumers in the province.

Some of them – the so-called independents – are holding a news conference at some unspecified time later this week to explain just how badly they lost.  Surprisingly, that’s exactly how they plan to explain it:

This conference will outline the catastrophic losses to independent pharmacy from both the agreement imposed by government and the changes to generic prices forced by legislation.

That line is from early on in the notice they sent to news editors for tomorrow assignments.  Only later did they mention that the agreement the provincial government announced over the weekend might affect consumers badly.

It won’t.

Government officials know it won’t.

The same crowd of drug store owners uses exactly the same prediction of imminent catastrophe for drug store owners – and maybe their customers - any time the provincial government does anything to its provincial-funded drug plans. In the later 1990s,  it was in a racket over the dispensing fee drug stores charge. 

Despite the warnings of doom from many of the same drug store owners who are taking to the ramparts this time, the drug stores are still out there.  Sure the mix of “independent” to "chains" has shifted to near parity from a 66/33 split favouring independents. But when you realise that a decade and more ago that ratio in this province was already the flip of the situation across Canada, you can see that the locals aren’t doing so badly.

Don’t forget the really important point, though:  no one in the public is complaining they can’t find a drug store.

Consumers can still get their drugs.  They or their insurance company will pay less for them now.  And for seniors on the provincial plan, they are actually going to pay less than the mandatory price a decade ago. 

For consumers, this is nothing but a gigantic win.

For the record, note the dig in the notice at the president of the association representing all pharmacists (PANL). Consumers don’t give a rat’s backside about those internal feuds among the stores, either.

For the provincial government, this is one big win against the two opposition parties both of whom went to war for the drug store owners. Neither of the opposition parties sized up the issue politically.  That much is obvious.

The fundamental shag-up here is the same one that will affect the postal workers, incidentally.  A local union leader called one of the open line shows on Monday to gripe about how automation will get him on his rounds faster and help lower operating costs for the post office, which means hopefully that the cost of postage won’t be jumping up.

The guy went on and on about the inconvenience for him personally.  He talked about the possibility that some of his colleagues will lose their jobs because the improved speed and cost-effectiveness of the machinery.

Both the drug store owners and the postal worker are talking to themselves.  The people they need to win over in order to have a political impact are consumers.  Neither the drug store owners nor the postal workers have explained why consumers should give a toss.

The way your humble e-scribbler has framed the outcomes in both cases is how consumers will hear them or have heard them.

For those who have jumped ahead a bit, you can also see why the provincial government has been steadily losing support for its plan to jack up electricity rates and double the public debt or some such combination.   Consumers just don’t see any benefit for them in it.  A great many of them are flat-out opposed to the scheme.  They simply don’t believe Jerome, or Kathy, or Ed martin when they promise the moon and the stars but can’t deliver a simple report.

For those that don’t oppose it flatly, the rest are uncertain.  They have doubts.  The opposed and the unsure constitute a majority. If NTV and Telelink can scrape together the cash for a poll, they should do one very soon.  Telelink is the only truly independent pollster in the province on this issue with a track record for accuracy.

But where you’ve got it:  three groups, and all three suffering from the beginners fault of communicating with themselves instead of the people they need to persuade.

No surprise the three of them have lost or are losing badly.

-srbp-

And the drug store owners’ situation gets worse…

They are already in an untenable political situation.

And now the drug store owners are in an even worse situation as they fall to fighting with pharmacists.

Here’s the way VOCM put it:

They say that independent pharmacies are well represented in their organization with majority control of their working group on government relations. However, the independents say that the Pharmacists' Association represents pharmacists, not businesses or drug stores.

Not all drug store owners are pharmacists, but they certainly need pharmacists to run the drug stores.

Whoever among the drug store owners started this racket with the provincial government out in the open is clearly an idiot.

- srbp -

Why drug store owners - and some politicians - will lose

Shills might like you to believe that their party is on the side of the angels by backing some drug store owners in the province, but  all they are doing is showing how little they know about the drug store business and consumers in Newfoundland and Labrador.

Drug store owners will lose in the battle over generic drug pricing.

Late last week, the provincial health department issued a news release that gave the simple reason.  Follow the money and you will find the trail leads you to consumers, including the major private sector drug plan providers. As the release put it:

The policy will result in lower priced generic prescription medication for out-of-pocket payers, those receiving private insurance and beneficiaries of the provincial drug programs, creating savings that will be reinvested into the health care system.

The reason is a simple one:  under provincial law, the price for generic drugs in this province is not just the price paid by the provincial government’s drug plan for senior citizens and those on income assistance.

Everyone will pay the cheap rate.

It’s been like that since the provincial government allowed the sale of generic prescription drugs in the province almost 40 years ago.

The government release is long-winded and hard to understand but the point is in there. Here’s a bit of extra backstory

Historically, the Ontario government set the best price simply because its drug program is the largest in the country.  A Quebec policy of accepting only the lowest cost anywhere ensured that every provincial government wound up paying the Ontario rate.

The provincial government release talks about generics costing 75% less than brand name drugs.  In some instances, the cost to consumers has been less than 60% of what the brand name drug costs.  Consider as well that many of the brand name manufacturers sell their original, brand name drug through generic drug companies.  What you are paying for at a discount price is actually the original pill.

But to get back to pricing, remember that what they are talking about, though, is the retail price to consumers, often called the formulary price. 

While that may have been fixed at 75% or 60% of the brand name price, competition in the market allowed drug companies to lower the actual cost to drug stores through a variety of discounts and other payments.  The end result for drug stores was a mark-up on generic drugs that rivals anything they sell in their front store.

Starting in 2010, and faced with skyrocketing health care costs, some provincial governments started eyeing the real wholesale cost drug stores were paying and not the notional prices set under the old policy. The savings for the people paying the bills could reach into the tens of millions annually.

Ontario started the wave.  But backlash there has been muted, largely because the pricing scheme only covered the provincial government’s clients.

In Newfoundland and Labrador, though, a change to formulary pricing will benefit anyone who pays for generic drugs.

And for that reason alone, the provincial government will likely stick to its guns in an election year.

They will win.

You don’t even have to consider that the drug store owners’ argument about lay-offs and loss of rural pharmacies is bullshite. 

And Lorraine and Yvonne and anyone else shilling for them will look like dorks in the process as they wade into the battle and attack the government. 

After all, how can you claim to be standing up for consumers when you are siding with what most people are likely to see as just another aspect of the profit-rich, international pharmaceutical industry?

- srbp -

Where isn’t the democracy in that?

Robert Doyle spoke to reporters recently on behalf of some independent drug store owners in the province.
Doyle complained about a change to regulations for the provincial government’s prescription drug program that required a drug store owner to give 120 days notice before withdrawing from the program. CBC quoted Doyle:

Robert Doyle, spokesperson of the Independent Pharmacy Owners association, said the move seems a little heavy-handed.
"Pharmacies could have to go to court and if found guilty, up to a $2,000 fine and six months in jail. So he's looking at putting a criminal offence against pharmacy owners," Doyle said.
…
Where’s the democracy?

Where indeed.

There is nothing in any provincial law that forces drug stores to accept payment from the provincial prescription drug plan. Under section 16, a drug store can ask for a provider number and get one.

The drug stores had to decide to accept payment from the plan in the first place.

But that’s not all.

Under the regulations approved on July 25, drug stores can legally withdraw from the program without any penalty. All they have to do is give 120 days written notice, post a sign in the drug store and send out letters to any patients they’ve served within the past 12 months.  That might sound like a bit of work but given that the drug stores should have contact information on file, it isn't half as hard as it looks.

If they do all that then – on Day 121 -  they aren’t accepting direct payment any more.

Period.

But not exactly.

Under subsection 4 of the regulations, the minister can “waive or shorten” the notice period. Any drug store owner who is seriously pissed off enough that he or she doesn’t want to accept direct payment from the provincial drug program can easily write and ask the minister for the period to be shortened or suspended entirely.

In other words, anyone who wants out can get out today, right now, no waiting.

None of them will ask for a waiver.

None of them will issue the 120 day notice now required.

That’s because this dispute isn’t about democracy any more than it is about rural versus urban this or that.

It’s about money.

Everything else is nonsense.

- srbp -

Follow the money

Anyone who wants to understand the current racket between the provincial government and some drug store owners need only follow the money.

It is the local version of something that started in Ontario in 2010. CBC has a decent background note that explains the issue.

And if you want to understand why the pharmacy owners caved in so quickly and abandoned their threat to stop accepting direct payment from the provincial government drug program?

Well, see if you can find out how much of their drug sales come from the provincial government’s drug programs for seniors and low income Newfoundlanders and Labradorians.

- srbp -

Pharmacy security

A rash of break-ins at local drug stores has store owners wondering what needs to be done to increase security and keep prescription drugs out of the illicit market.

Here’s a thought.

Anyone who has shopped at a major supermarket will notice the steel gates that ring the dispensary area when the pharmacist is away. The stores have those security features since the entire layout is based on designs in Ontario where drug stores have been required for years – by regulation – to provide that level of security.

78. The parts of a pharmacy in which prescriptions are compounded and dispensed for the public or drugs are stored or sold by retail shall be so constructed that they may be locked and made not accessible to the public in the absence of a pharmacist. R.R.O. 1990, Reg. 551, s. 78.

Maybe the local pharmacy regulatory board should bring in those types of security features for all drug stores in the province.

The local regulations only apply to drug stores that have specifically applied for that type of set-up.  The lock and leave regulations in Newfoundland and Labrador applies when the dispensary is closed but the rest of the store is open.

If a pharmacist is always available when the pharmacy is open, there is no need to complete the Application for Approval of Lock and Leave form. An application form is available from the Board’s offices, or from the website www.nlpb.ca should you later decide to apply for Lock and Leave approval. [Italics added]

The Ontario regulation applies to all pharmacies at all times.  When the store is closed, the extra level of security in the dispensary make it that much harder for thieves to break in, turn off security cameras and then take their time breaking into the narcotic safe.

Maybe drug store owners could try that before they talk about getting rid of all “narcotics and restrict them to hospitals or one central location where they're dispensed only when needed,” as the CBC story linked above said one pharmacist  suggested.

Just a thought.

-srbp-