On June 30th, the Ontario Drug Benefit formulary from the Ontario Ministry of Health and Long Term Care gave pharmacies a 20-day grace period before enforcing the new generic pricing beginning July 20th, 2010. The grace period gives pharmacies additional time to use stock purchased before the July 1st price reductions came into effect on new orders.

It is important that employers understand how their insurance carrier will be making adjustments for this new pricing model, including any pharmacy adjustments in dispensing fees and mark-ups, or brand drugs coming off patent.

For most carriers, the expected savings between July 20, 2010 and March 31, 2011 is about 1.9-2.2% of drug costs. However, this savings will vary significantly by plan depending on the plan design and specific demographics of your group.

For more information on how this change will impact your current plan, please contact me at kokeefe@bearingcapital.ca

You can also visit the Ontario Government’s Fair Drug Pricing website for more information:

http://www.health.gov.on.ca/en/public/programs/drugreforms/default.aspx

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