Drug costs leave NDP woozy

Yukoners pay too much for prescription drugs, says NDP Leader Liz Hanson. That's partly because the territory's pharmacists charge some of the highest markups in the country.

Yukoners pay too much for prescription drugs, says NDP Leader Liz Hanson.

That’s partly because the territory’s pharmacists charge some of the highest markups in the country.

Yukon’s prescription drug prices are based on an agreement with pharmacists, struck in 1995. The deal was supposed to expire in 1997.

Fourteen years later, Yukon’s politicians still haven’t given the bureaucracy a mandate to negotiate a new deal, according to a recently-released report by the territory’s auditors.

“Where’s the political direction that says you’re going to do this?” asked Hanson.

Health staff prepared an options paper for senior management in early 2010, “but there has been no formal instruction to proceed with negotiations,” states the audit report.

The territory’s auditors first recommended Health staff “make a concerted effort” to negotiate a new deal with pharmacists in the autumn of 2009. Managers recently vowed to make these recommendations by the spring.

That’s not soon enough, said Hanson.

A government review found pharmaceuticals are marked-up by 44 per cent in the Yukon. The territory’s pharmacists take 30 per cent. Wholesalers take 14 per cent.

Drug costs are one of the main drivers of Yukon’s spiralling health-care costs.

Health expenses expanded by nearly 50 per cent over the past five years. By 2018, the Yukon could face an annual revenue shortfall of as much as $250 million, warns the 2008 Yukon Health Care Review.

The territory pays more than any Canadian jurisdiction to provide its residents with prescription drugs, according to the review.

“Drugs may be one of the biggest challenges for costs containment for the health-care system,” it states. “It has been the fastest-growing component of health care during the past 25 years.

“Prescription drug costs are the most important component of drug spending, and they are the single most important reason for escalating expenditures.”

That’s partly because Yukon’s Pharmacare program, which pays for prescription drugs for seniors, is more generous than any similar program in Canada. We’re one of only two jurisdictions that don’t charge beneficiaries any out-of-pocket expenses.

But it’s also partly because the Yukon pays more for drugs than other jurisdictions.

The small number of pharmacists in the territory “makes it difficult to obtain competitive pricing for drugs,” the review states.

Pharmacies justify their high markups because of the high cost of operating in the North and the challenges they face in recruiting and retaining staff.

But auditors have urged the territory to “review the reasonableness of the markup costs.”

Health managers blame staff turnover in part for the delays in striking a new deal with pharmacists. In May 2010, the program director left the department. The position wasn’t filled until October.

In a strange turn, the man in a position to fix the current mess was recently one of the chief beneficiaries of Yukon’s steep drug markups.

Before Darrell Pasloski became premier, he owned two Shoppers Drug Marts in Whitehorse.

“It would be great if he showed the objectivity we expect as a premier and ensure this review commences,” said Hanson.

Contact John Thompson at johnt@yukon-news.com.

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