Three of Stettler’s pharmacies joined counterparts across Alberta last week in protest of the provincial government’s cuts in pricing of generic drugs.
“It’s a huge blow to the pharmacy business model,” said Scott Savage, pharmacist and owner of Savage Value Drug Mart.
Like their counterparts, the Stettler businesses were closed for an hour, from 11 a.m. until noon, last Thursday.
Effective May 1, the province plans to cut in half what it pays for generic drugs. It will pay 18 per cent of brand-name drug prices for generic drugs — down from 35 per cent.
The severity of the cuts caught many pharmacies off guard.
“We knew the government was up to something — we just didn’t know it would be this drastic and radical,” Savage said.
He had expected the price would be “trimmed to 30 per cent, or perhaps 25 per cent — worst-case scenario.
“Nobody was expecting 18 per cent. It was quite a shock to the profession. We won’t be able to staff pharmacies the way they need to be staffed.”
Savage said pharmacy owners are concerned about their profit margins.
“There won’t be an independent pharmacy out there, that it won’t be tight for.”
Mike Chase, pharmacist and owner of Apple Drugs in Stettler, echoed Savage’s concerns.
“It’s estimated that this provincial cutback will impact each pharmacist $100,000 and each pharmacy $400,000 in lost wages and income, as it is implemented,” Chase said.
Savage said Alberta will have the lowest generic-drug prices in Canada, and perhaps the world.
“I can’t understand why Alberta has to be the lowest. It shows no concern for small, independent business.”
The provincial government promotes the cutback as saving Albertans $90 million on generic drugs. The pharmacies disagree.
“Pharmacies will be forced to either charge for services they have provided free, such as delivery, tax receipts, advice and counselling, or reduce staff, services, or close altogether,” Chase said.
“The savings the government touts will just be passed on to the consumer — no pharmacy, or any business, operates to lose money or break even.”
Chase said the three independent pharmacies in Stettler employ more than 50 people.
Savage said programs and grants the government is directing toward pharmacies to ease the loss of revenue are “short-term and band-aid solutions at best” and don’t come close to offsetting the cuts.
Chase was concerned the price cut of generic drugs might have a negative effect on drug availability.
“There have been several drugs already discontinued by generic manufacturers because these drugs are not profitable to produce,” he said. “This will affect patients’ therapy and also increase the cost as the patient will have to switch to the more expensive brand — if it is even available. Many brand products have been discontinued once the patent expires.”
Savage said “the timing was brutal,” as the announcement of the generic-drug cutback and the recent expansion of his store.
“I don’t think the government realizes the impact this will have — especially on rural, independent pharmacies,” he said.
“It makes you stop and look at it and wonder, why you would want to do this if you aren’t going to make any money.”