Patented Medicine Prices Review Board
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Public Drug Plan Dispensing Fees: A Cost-Driver Analysis

Appendix 5: Overview of Public Drug Plan Dispensing Fee Reimbursement Regimes

Table A5.1. Dispensing fee reimbursement regimes by public drug plan, 2001–2008
Public drug plan Dispensing fee reimbursement regime
British Columbia In British Columbia, dispensing fees were not to exceed the usual and customary fee charged for any prescription sold in the province. With special approval, BC PharmaCare would accept reimbursement fees that did not exceed the provincial average by more than 15%. A pharmacist charging a dispensing fee in excess of the provincial average plus 15% could petition PharmaCare directly for payment. Between 2001 and 2007, the maximum allowable fee increased from $7.60 to $8.60. That fee remained unchanged to January 2009.
Alberta

Alberta used a variable-rate schedule of reimbursement based on the actual acquisition cost of the medication. Alberta also had an additional allowance to cover inventory costs. The top row of the table shows the range of acquisition costs, while the rows below are the corresponding amounts that were reimbursed from 2001 to 2007. Alberta reimbursed both a dispensing fee and inventory allowance, so the values shown are the sum of both. Fee reimbursements until March 31, 2010, remained unchanged from 2007 levels.

Reimbursed prices from 2001 to 2006 are from the Alberta Blue Cross Pharmacy Agreement: Schedule of Prices— Historical Document (Alberta Blue Cross 2006). 2007 data is from the Provincial Drug Benefit Programs (Canadian Pharmacists Association 2001–2008).

 
Actual acquisition cost
  $0 – $74.99 $75 – $149.99 $150 and over
  Reimbursed dispensing fee + additional inventory allowance
Jan. 1, 2001 – Dec. 31, 2001 $10.10 $16.20 $24.00
Jan. 1, 2002 – July 31, 2003 $10.10 $16.20 $24.00
Aug. 1, 2003 – March 31, 2004 $10.40 $16.70 $24.70
April 1, 2004 – March 31, 2005 $10.61 $17.02 $25.21
April 1, 2005 – March 31, 2006 $10.93 $17.53 $25.97
April 1, 2006 – Sept. 30, 2006 $10.93 $17.53 $25.97
2007 $10.93 $17.53 $25.97

Exceptions in Alberta for 2007 included fees for insulin and oral contraceptives—the prescription charge could not exceed the acquisition cost of the drug product times 5/3. For injectable drugs other than insulin, the same formula applied to a maximum of $100 more than the acquisition cost. For compounded prescriptions that required more than seven minutes of preparation, the additional charge could not exceed 75 cents per minute for each minute over seven. As current fees, they are unchanged.

Saskatchewan Saskatchewan entered into an agreement with pharmacy proprietors regarding reimbursement for dispensing services. This included a maximum dispensing fee, which increased five times from 2001 to 2007: from $7.22 to $7.74 in March 2003, to $7.97 in September 2003, $8.21 in December 2005, $8.46 in October 2006, and $8.63 in October 2007. Fees did not change in 2008.
Manitoba Manitoba´s Pharmacare Program´s dispensing fees were unregulated: the fee reimbursed was equal to the amount charged by a pharmacist to a patient. This policy was in place from 2001 to 2008.
Ontario The Ontario Drug Benefit (ODB) Program reimbursed pharmacists at a dispensing fee that was capped at a maximum amount for each prescription filled. The cap increased twice between 2001 and 2007: from $6.47 in 2001 to $6.54 in 2003 and to $7.00 in 2006. The fee cap did not change between 2006 and 2009. ODB recipients were required to make a co-payment of up to a maximum of $2.00 or $6.11 per prescription depending on their program of eligibility. Ontario also reimbursed pharmacies for compounding drug ingredients. As of August 2008, the ODS reimbursed a maximum of two dispensing fees per medication per recipient per calendar month. Dispensers had to supply at one time the lesser of (i) the entire quantity of the listed drug product that was specified on the prescription to be dispensed at one time; or (ii) the maximum quantity permitted by ODBA Regulation. There was a list of exempted medications and special populations that were exempt.
New Brunswick New Brunswick established a variable-rate schedule of reimbursement for dispensing fees based on an average acquisition cost of the drug ingredient per claim. The schedule remained unchanged throughout the period 2001–2007.
Average acquisition cost of drug ingredient per claim Maximum fee
$0 – $99.99 $8.40
$100 – $199.99 $10.90
$200 – $499.99 $16.00
$500 – $999.99 $21.00
$1,000 – $1,999.99 $61.00
$2,000 – $2,999.99 $81.00
$3,000 – $6,000 or more $101.00 to $161.00

For medications that required compounding, the maximum fee increased to $12.60 when the average acquisition cost per claim was under $100; rose to $16.35 between $100 and $199.99, and $17.00 when the average acquisition cost per claim was between $200 and $499.99. Above $499.99, there were no additional fees for compounding.

Effective January 1, 2009, New Brunswick´s dispensing fee for claims with a drug ingredient cost between $0 and $99.99 increased to $8.90. There were proportional increases for other ingredient costs in the schedule.

Nova Scotia Between 2001 and 2007, Nova Scotia maintained two caps or reimbursement limits on dispensing fees based on whether the medication was categorized as high cost or not. A high-cost medication is defined as one with a value over $145 per prescription or as a medication that requires compounding. For medications not classified as high cost, the cap increased from $9.17 to $10.12 from 2001 to August 1, 2007. For high-cost medications, the cap increased from $13.75 to $15.64 during this period. Nova Scotia had a special reimbursement for medications that were billed to residents of nursing homes and homes for special care, but never provided to the patient. A restocking fee of 20% of the value of the medication was allowed. From August 2007 to March 2010, the fee cap was $10.42.
Prince Edward Island
  Children in Care, Financial Assistance, Quit Smoking and STD´s Diabetes Control Seniors, Family Health Benefit, high-cost drugs Nursing home (monthly per resident capitation fee)
Fiscal year(s) Prescription Over the counter Compound Oral med. Insulin Test strips All All
2001/02 – 2004/05 $7.00 $7.00 $7.00 $7.00 33 1/3% $7.00 NR $44.50
2005/06 $7.25 $3.75 $10.88 $7.25 33 1/3% $3.75 NR $45.83
2006/07 $7.50 $5.00 $11.25 $7.50 33 1/3% $5.00 NR $47.20
2007/08 $7.73 $11.25 $11.60 $7.73 33 1/3% $7.73 NR $48.63

NR = not regulated.

NIHB NIHB reimbursed dispensing fees from 2001 to 2008. The fee schedule was determined by NIHB guidelines defined by the region.
Table A5.2. Day supply policies by public drug plan, 2001–200815
Public drug plan Day supply policy
British Columbia

For short-term and first-time prescriptions, the day supply was not to exceed 30 days. On repeat prescriptions of maintenance drugs only, the maximum was 100 day supply. The exception was Plan B, which covered permanent residents of licensed long-term care facilities. The maximum day supply for this group was a month, commonly 35 days. BC PharmaCare did not reimburse medications required for extended absences. There were no significant changes to the policies from 2001 to 2007.

In February 2009, a new Frequency of Dispensing Policy took effect for BC PharmaCare.16 Under the policy, PharmaCare expected most long-term maintenance medications to be dispensed in a 100-day supply and short-term medications to be dispensed in quantities of up to 30 days, except in cases of medical necessity. If a patient required more frequent dispensing of medication, a physician or pharmacist had to document the patient´s need.

Alberta For the Alberta Health and Wellness programs, there was no regulation pertaining to the minimum number of day supply. The maximum was no more than 100 day supply. The Alberta Seniors and Community Supports (ASCS) program had guidelines that listed medications with a maximum day supply of either 31 or 100 days. Antibiotics were restricted to 14 days. Other exceptions to the maximum 100 day supply included drugs for the treatment of multiple sclerosis and autoimmune disorders. There were no significant changes to the policies from 2001 to 2008.
Saskatchewan Medications were supplied for 34 days except for drugs listed in either the Maintenance Drug Schedule, which were supplied for 100 days, or those on a special list of drugs that were supplied for two months. A pharmacist could provide less than a 100 day supply if requested by a patient or ordered by a physician. When the day supply was less than 34 days, pharmacists were encouraged to document the reasons on the prescription record. There were no significant changes to the policies from 2001 to 2008.
Ontario

The Ontario Drug Benefit program set a maximum day supply of 100 days. An additional 100 day supply could be obtained if the person left the province for an extended period. For the first filling of a prescription, there was a restriction of 30 day supply. Subsequent fills could be made for up to 100 days, subject to authorization. For Trillium recipients, Ontario reimbursed the lesser of a 100 day supply or a quantity that extended up to 30 days after the end of eligibility. There were no significant changes to the policies from 2001 to 2007.

In August 2008, new regulations were enacted that stipulated that a maximum 100 day supply must be dispensed, except in certain cases, for example, if the prescriber directed a smaller quantity or if the dispenser determined that a patient was incapable of managing medications. Exceptions were Ontario Works recipients, for whom pharmacies had to dispense at one time the maximum quantity of a 35-day supply, and for trial prescriptions, which were dispensed for 30-day supply.

New Brunswick New Brunswick set a maximum 100 day supply, with exceptions of a 35 day supply for narcotics, controlled drugs and benzodiazepines. The 35-day limit was a Regulation to the Pharmacy Act and applied to all residents of New Brunswick, not just to New Brunswick Prescription Drug Program beneficiaries. The Prescription Drug Program set quantity limits for some drugs. There were no significant changes to the policies from 2001 to 2008.
Prince Edward Island Day supply was typically limited to a maximum of 30 days for most drugs. Exceptions included maintenance drugs: 60 days; smoking cessation drugs: 7 to 14 days; oral medication for diabetes patients: 90 days; and multiple sclerosis treatments: 32 days.17 There were no significant changes to the policies from 2001 to 2008.
Nova Scotia Except under certain circumstances, pharmacists filled prescriptions to a maximum of 100 days and a minimum of 28 days. Nova Scotia did not pay multiple dispensing fees when the quantity dispensed was less than the quantity prescribed.18 There were no significant changes to the policies from 2001 to 2008.
NIHB A Short-Term Dispensing Policy for chronic use drugs took effect in September 2008. Prior to that, NIHB had no restrictions on day supply per prescription. Under the policy, a pharmacist can either bill the NIHB once every 28 days for a dispensing fee, or the pharmacist can bill the NIHB every day if they choose, but only 1/28th of the dispensing fee will be paid. The policy is for medications used for chronic conditions published on a special list by the NIHB.
Table A5.3. Public drug plan markup policies, 2001–200819
Public drug plan Markup policy
British Columbia From 2004 to 2008, no markup was allowed on top of the actual acquisition cost of the drug ingredient. During these years, BC PharmaCare pricing reflected a maximum wholesale markup of 7% of the direct cost of the ingredient. In 2003, PharmaCare allowed a markup of 7% above the acquisition cost, while in 2001 and 2002 a markup was not allowed.
Alberta With one exception, Alberta did not have a markup on the cost of drug ingredients from 2001 to 2008. The exception was out-of-province direct bill claims, which were allowed an up-charge.
Saskatchewan From 2001 to 2008, Saskatchewan had a variable markup capped at $20 per prescription (under the agreement with pharmacy proprietors). The markup varied with the drug cost per prescription as follows:
Drug cost per prescription Markup (% of drug cost)
$0–$6.30 30%
$6.31–$15.80 15%
$15.80–$200 10%
Over $200 $20 per prescription
Manitoba Manitoba had a markup on drug products from 2001 to 2006. From 2006 to 2008, the practice was discontinued, and a markup was no longer available above the actual acquisition cost from the manufacturer.
Ontario

A 10% markup was allowed between 2001 and 2006, and then lowered to 8% in 2007. This remained unchanged in 2008. The markup was calculated by taking a percent of the Drug Benefit Price as set in the Ontario Drug Benefit Formulary.

As of 2006, cost-to-operator claims were no longer permitted.

New Brunswick New Brunswick did not have a markup on the cost of drug ingredients from 2001 to 2008.
Nova Scotia With a few exceptions, Nova Scotia Pharmacare did not have a markup from 2001 to 2008. The exceptions were injectable products and ostomy supplies.
Prince Edward Island Prince Edward Island had a markup for its Seniors, Family Health Benefit and Multiple Sclerosis programs from 2003 to 2008. From 2003 to 2006, the markup was 7.5% of ingredient cost when the cost was $45 or more. In 2007, the markup increased to 8.5% of ingredient cost when the cost was $53 or more. This remained unchanged in 2008.
NIHB NIHB allowed markups from 2001 to 2008. The markup was determined by the NIHB Program Pharmacy Pricing Guidelines defined by the region.

15 The main source for this table was the Provincial Drug Benefit Programs (Canadian Pharmacists Association 2001–2008). It was supplemented with information found on the websites of the individual public drug plans.

16 See the December 8, 2008, BC PharmaCare newsletter (BC Pharmacare 2008) for a summary of this policy.

17 PEl´s current policy.

18 Nova Scotia´s current policy.


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