Myths & Facts – Professional allowances and the ODB funding gap.

The Claim:

The Ontario government has said professional allowances are used “inappropriately”.
This is a critical issue, because it suggests that the Ministry of Health and Long-Term Care does not understand the role of professional allowances under the current funding model. Since the Ministry is currently considering major cuts to overall pharmacy funding by eliminating professional allowances, this lack of understanding could be extremely damaging to access and quality of patient care.

The Facts:

Under the current pharmacy funding model, professional allowances paid to pharmacies by generic manufacturers are one key element of overall pharmacy funding, help to fill the Ontario Drug Benefit (ODB) program funding gap.

The fact is that Ontario pays pharmacists far less than the cost of simply dispensing medicines (see chart below).

In addition, the government’s direct compensation to pharmacies does not even come close to covering the cost of the wide range of additional services pharmacies provide, including:

• Compliance packaging and blister-packing
• Delivery of prescriptions to seniors lodges
• Blood glucose monitor training for patients with diabetes
• Prescriptions by mail for “snowbirds”
• Disease management education for conditions such as asthma, diabetes and heart disease
• And many other currently-provided services.

Ontario’s Community Pharmacies have provided the Ministry of Health and Long-Term Care with a comprehensive framework to end the funding gap, and ensure that pharmacists are directly and properly compensated for the care and services they provide.

However, until the government agrees to appropriately fund community pharmacy, professional allowances are the only safety net pharmacy has.

In short, under the current system, without professional allowances pharmacies lose money on every prescription dispensed under the ODB, and on every additional service they provide to patients.

If professional allowances were to be eliminated, without replacing the lost revenue through direct government funding, all pharmacy care and services to Ontario seniors and people on social assistance would generate significant economic losses. Pharmacies would have to cut services, or begin charging patients for them, lay off pharmacists and other staff, reduce hours of operation in the afternoon and evening, and some would be forced to shut down entirely.

Professional allowances are used appropriately, to maintain the standard of care Ontarians, particularly seniors, rely on. The only “inappropriate” thing would be to hurt patient care and services, by cutting professional allowances without replacing them with an equal sum in direct government funding.