Should markups on high-cost drugs be capped?


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10 comments

  1. Gerald Evans

    Excellent review of what I think is an ethically dubious practice. In the past, high drug prices like this were mostly confined to drug for rare diseases and oncology. Chronic HCV infection is not a rare condition at all and unlike cancer patients, the majority of adverse health outcomes for patients living with HCV are due to something other than their HCV infection. I know this well as an ID specialist who treats patients with chronic HCV. Lastly, to show how lucrative this practice is, it appears that pharmacists are now partnering with and subsidizing some costs for HCV-treating physicians to ensure these prescriptions are funnelled to their pharmacies; this speaks volumes as to the profit margins. I would argue that although in business it is important to make a profit, it should not be a filthy one.

    • Randy Luckham

      These partnerships seem unethical on both sides, unless there is a clear clinical benefit to the patients involved. Perhaps there is, but…

  2. Durhane Wong-Rieger

    I wonder how many more patients could be treated with the medicines they need if we were to curb these practices that are so blatantly unjustifiable. It is unethical to deny patients access to valuable medicines on the basis of cost and yet allow “middlemen” to continue to reap payments that have no added value to anyone except the vendor. Why doesn’t the government apply the same “cost-effectiveness” criteria to this part of the supply chain?

  3. Randy Luckham

    “The pharmacies then get paid for the drug by the patient, public drug plans or private insurance within a couple of weeks – well before their payment is due to the wholesaler.”

    My pharmacy dispenses very, very few of these high priced medications, but I’d have to disagree with this statement. ODB, and others, pay us an average of 30 days post claim. Wholesaler invoice payment is due on average well before that. There is definitely an inventory carrying cost, even with just-in-time ordering. Just-in-time ordering serves another purpose as well, in that these products are non-returnable to the wholesaler and any product ordered too hastily before an Rx is received and successfully adjudicated could result in a huge financial loss. There is financial risk involved in addition to the carrying cost.. A reasonable markup is required. But reasonable, yes.

    • Randy Luckham

      clarification: most injectables and products that require climate control are non-returnable. solid dosage forms (tablets etc.) may be returnable at some point (eg. when expired) perhaps for a restocking fee.

  4. Concerned citizen

    Thanks you so much for shedding light into yet a other problem with the Ontario health system. There is lack of adequate regulation, oversight, and restriction on alternate payment strategies.

    For example, phyicians are not paid for the time and administrative work (including support staff) taken to prescribe these expensive medications. As such, to improve prescription rates and refilling, either pharma companies or the pharmacist retailers themselves offer “incentives” in the form of salary support, clinic space (rent free), educational grants, or contributions to non-for-profit entities to flow through dollars. This influences the physician’s prescribing practice.

    New strategies need to be considered, such as a OHIP funded drug navigators, alternate payment models for specialist physicians that prescribe these high cost drugs, and laws to curtail these practices.

    Creating more barriers to appropriate prescribing does NOT help patients nor insurers. It forces pharma companies and care providers to become more “creative”, so the right patient can get the right treatment.

    I believe that most pharmacists and physicians would choose to do the “right” thing if it the the path was made smoother.

  5. Deb Maskens

    Dispensing high-priced and highly toxic anti-cancer drugs at community pharmacies (where the pharmacist likely has no cancer-specific training) is not only a financial loss, but a huge patient safety issue. These issues are well documented. Western provinces (BC, AB, SK) dispense cancer drugs only through trained oncology pharmacies. In ON, you can pick up your cancer drugs at the back of a grocery store, from someone who is not oncology-trained, who does not have your medical record. Does this make sense for anyone other than those benefiting from the markup? Certainly it makes no sense — and is fundamentally UNSAFE — for the patient.

  6. A Very Concerned and Educated Citizen

    Please note there is more than one Hep C medication that can cure the disease. The class is a DAA – Direct Acting Antiviral.
    These mark-ups are completely unacceptable and contrary to the comments below – yes, these can be returned if expired. Further to that expiration dates on DAA’s are often greater than 24 months (unlike biologics/vaccines). So the markup ~$3999.00 CAD in ON for DAAs is completely unacceptable for taxes payers in a publicly funded system such as OPDP…shame on you pharmacies, not too mention the bonuses and incentives you receive for pushing the generics on patients….wonder why Internet pharmacies were so attractive?

  7. John Brenton

    This is a very well balanced and informative article. Instead of government and private insurers working to delay and deny much needed and highly effective drugs to patients. Capping markups would have an immediate impact on costs in the system without compromising patient care

  8. J Bell

    There is a system-wide leakage of valuable dollars. In this day and age with computerized inventory management and shipping methods (e.g., Amazon, UPS, FedEx and others in e-business), why should we allow the “middlemen” to siphon out precious public and private dollars to pay for these ridiculous mark up fees? As a concerned citizen I would like to see my tax dollar to be used most efficiently. Incentivizing pharmacies and not patients cannot be good for the society – period.

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