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New law will save government money on drugs, says minister

British Columbia Health Minister Michael de Jong has introduced legislation that he says will allow the province to reduce what it pays for generic drugs.

"What we want to have is the certainty to know we have the most competitive prices possible for generic drugs in Canada," said de Jong.

The ministry signed an agreement in 2010 that was to reduce the cost of generic drugs to 35 percent of the price of the brand name drugs they replace, but de Jong said earlier this year that the agreement failed to generate the savings the government anticipated.

It followed legislation in Ontario that reduced the price of generics to 25 percent of the brand name price. Ontario yesterday announced it will drop the price of the top ten generics further to 20 percent of the brand name drugs.

The Pharmaceutical Services Act de Jong introduced does not name percentages, but allows the province to set prices by regulation. The approach allows B.C. to take into account changing circumstances, de Jong said. Individuals and payers besides Pharmacare will also pay the same price the government does, he said.

The bill also allows the province to end the practice of manufacturers offering rebates to pharmacies to carry their drugs, savings which are not passed on to Pharmacare or other purchasers. Minister de Jong said rebates "have been a problem" and were one of the reasons the negotiated agreement didn't work.

NDP Health Critic Mike Farnworth said the opposition has been pushing for two years for B.C. to follow Ontario's lead and today's legislation shows the government's approach didn't work.

"It's the response to a failed policy," he said. "Their policy failed and I think there's some issue as to how much it cost the last two years to not follow Ontario's lead . . . We've wasted two years of potential savings that could have gone into the health care system."

The bill also sets out a statutory framework for Pharmacare, a $1 billion a year program that had formally been set only by government policy.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

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