The Claim:

The Ontario government has said that pharmacies enjoy more stable and predictable revenues than other industries.

In a presentation on the province’s drug system on July 10, 2009, the government said “Unlike other industries, pharmacy… [provides] stable and predictable revenue as compared to most other industries.”

The Facts: 
The value of dispensing fees – pharmacies’ main source of revenue under the Ontario Drug Benefit program – has been falling steadily, in real terms, for two decades. In addition, under Ontario’s Transparent Drug System for Patients Act, the government has the power, at any time, to make sweeping changes to dispensing fees and other components of pharmacy funding. Further, the government can apply these compensation changes retrospectively, meaning that if the government chose to lower pharmacy compensation it may do so not only in respect of future payments, but it may also apply these changes to any previous payments made to pharmacy.

Inflation has increased by more than 50% since 1989. Costs to operate pharmacies have risen substantially, including wages, occupancy costs, computer technology and a whole host of other operating costs. But dispensing fees under the ODB program have increased only 66 cents, or less than 10% in that time.

Adjusting for inflation, the value of dispensing fees has declined by more than 40% in 20 years.

The Bottom Line:
Under the current public drug system, community pharmacies’ revenues are neither stable, nor predictable.

That’s why Ontario’s Community Pharmacies have presented a comprehensive, constructive proposal to the government, to establish fair, stable and predictable long-term funding for pharmacy services. It’s the right way to ensure sustained quality and access to patient care, and economic viability for community pharmacies.