Atlantic companies lobby for cheaper drugs

Some of the biggest companies in Atlantic Canada, such as Bell Aliant, J.D. Irving and Michelin Tire, are banding together so they can access generic drugs at a lower cost.

They are among the companies that have formed a new group in an effort to cut the cost of prescription drugs for their roughly 40,000 employees.

In the Maritimes, corporate drug plans buy generic drugs for about 65 per cent of the cost of their brand-name equivalents compared to the roughly 50 per cent paid by much larger government plans in Alberta and Ontario.

'If we can exercise even a five per cent 10 per cent reduction in the price of generic drugs by exercising purchasing power as a group then we will have achieved something.' — Hugh Paton

Generic drugs account for more than half the prescriptions purchased by self-insured plans where employees usually split the cost with their companies.

Many of the region's companies have been closely watching recent negotiations between Medavie Blue Cross and pharmacies to reduce the price of generic drugs.

Hugh Paton, the executive director for the Health Plan Payers Association, said the organization is engaging in a discussion with drug companies and both large and small pharmacies to find out how these companies can access cheaper drugs.

Paton said businesses in the region noticed reports showing there were savings in purchasing generic drugs.

"That report from the Competition Bureau of Canada showed there were savings in the prescription drug supply chain that the payers of drugs weren't able to access. So it got us wondering, how can we get our share of those savings?" Paton said.

Paton said the issue is about long-term sustainability because if the costs of generic drugs do not go down that could put added financial pressure on the companies that offer employee drug plans.

The organization, which informally began in 2007, may find tough negotiations with Shoppers Drug Mart. That company told its shareholders last year that pressure from governments and plans looking to pay less for generic drugs could significantly impact its profit.

Paton said companies are at a disadvantage to government-run plans in finding cheaper access to generic drugs.

"It kind of leaves the private payer sector out in the cold because we don't have the power of legislation. But if we can exercise even a five per cent or 10 per cent reduction in the price of generic drugs by exercising purchasing power as a group then we will have achieved something," Paton said.