February 26, 2014

Alberta "flip flops" on new pricing policy for brand name drugs:

by Beverley Herczegh, Director

This month Alberta released an updated pricing policy with a requirement that pricing for both brand and generic drugs "must be less than or equal to the lowest published price of that drug product in any other government sponsored drug program in Canada."  

On the call with industry on February 12th, it was made clear that the objective was unified pricing across Canada and for a moment it looked like the provinces (not the feds) might actually get there.

But then on February 18th, based on "information and discussion" with industry (lobbying perhaps?) the decision was flipped for brand name drugs, reverting back to the original pricing policy as per the Alberta Drug Benefit List non-fixed pricing rules.

This means that annual CPI increases are back. The price confirmation process remains the same but the schedule has been pushed out so that the release will be February 21st and the due date March 6th.  

There are other noteworthy changes including:

  • The tiering of generic prices:
    • First entry (when only one)- 70%
    • When 2- 50%
    • When 3- 25%
    • When 4 or more – 18%
  • Single dispensing fee of $12.30  (no longer a tiered fee based on drug cost)
  • Actual acquisition pricing (AAC) model changes to a published price model as in Ontario and BC
  • A dual markup system with variation between public and private pricing There is more to this policy, including exceptions.

For more information contact Bev Herczegh at 647-407-3592 or bherczegh@pangaea-consultants.com