Dear Sir:
Recently Barry Millet of Summerstown wrote somewhat scathingly that Dalton McGuinty, Premier of Ontario, has it all wrong with regard to the pharmacist situation. Mr. Millett, in my opinion, has it all wrong. The pharmacies are to be denied $750 million in professional allowances they receive from generic drug makers. This is good news not bad news because the public should NOT be subsidizing poor businesses. Such pharmacies, needing to be propped up by another company that can then expect loyalty from the pharmacist for their product, should not be trusted. In the real world this is known as having a vested interest in the outcome of business.
If a pharmacist cannot manage a business without being subsidized then he/she deserves to be closed down. Should the poorly managed pharmacists be forced to close down then we, the public, can spend some of the savings from reduced generic drug costs travelling to a more business-like pharmacy. The generic drug manufacturer has already taken a product, that has been produced at huge cost by a legitimate research drug company, and then exploited the product.
No-one gives newspapers hand-outs or local farmers, restaurants, hairdressers and the like so why should the pharmacies expect them? Businesses are expected to run on sound principals and a pharmacy that is run along sound business lines is apt to be more able to advise and counsel than the pharmacy run on shoestring practices. If Mr. Millett is so imbued with his feeling the poorly managed pharmacist needs help he can always volunteer his time, free of cost, but, for gosh sakes, get off ‘the strike at McGuinty’ bandwagon. Premier McGuinty is not always right but then who can claim to be? End of discussion.
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A Basic Lesson in Economics;
Dear Mr Milnes from South Stormont:
If your employer paid you $6.47 an hour in 1986 told you that he was going to be paying you $7.00 an hour in 2010, would you still be working for him today?
I am a pharmacist in Ontario and I “work” for the Ministry of Health (the ministry). The industry has been chronically underfunded by the Ministry . In 1996, The ministry recognized the need for additional funding and deregulated the industry. The chronic underfunding by the Ministry necessitated we go to the marketplace for additional funds. The ministry encouraged this practice and in 2006 began to regulate “professional allowances”.
Ministry propaganda would have you believe that these “allowances” are new. The harsh reality is these allowances have been propping up the drug provision system to the direct benefit of the tax payer whether he is covered by the ministry, has his own drug plan or pays for his drugs himself.
Here’s a simple lesson in economics you might understand. In a September 2009 report prepared by the Ministry, it said that the pharmacy portion of the profit pool for drug provision in 2009 in Ontario was $830 Million. If I take that $830 Million and grow it by 5% annually to 2011 numbers, that number becomes $915 Million.
Now for the impact of the cuts. When you take the $750 Million cut you are a talking about, work in a 5% annual growth, and add in the loss from the upcharge reduction, the number becomes $1.1 Billion. $1.1 Billion!
Now let’s do the math… That’s $915 Million, less $1.1 Billion equal to MINUS $185 Million. MINUS $185 Million!
Let’s make things simpler here. Let’s say in 1986 I sold a cane to your elderly father for a dollar. Out of that dollar I made 6 cents before paying interest (because I have a large mortgage) and taxes (because I am an honest guy) and the Ministry of Health said that was OK. Those aren’t unreasonable numbers for the retail sector.
24 years later you come looking for that same cane (because you inherited some of your father’s mobility problems). It’s 2010, but the Ministry is still paying me in 1986 dollars. I’ve had to go to my cane supplier and ask him to help me because the Ministry refuses to pay me more. I am operating in 2010. My expenses are all in 2010 dollars and if I sell you that cane in 1986 dollars with 2010 expenses I lose 4 cents on every dollar. My supplier recognizes that and understands that if he is going to sell his cane in my store he has to give me 10 cents.
On that 2010 dollar I sell you the cane for I make 6 cents. The Ministry however is now taking that 10 cents away and expects that for every dollar I sell, I have to take a 4 cents loss. HOW LONG DO YOU THINK I CAN SURVIVE? This scenario is the harsh reality of every pharmacy in Ontario! You will drive a very long distance finding your more business like pharmacy.
The real problem is chronic underfunding by the Ministry of Health. That’s what the Ministry is not telling its public.
I am not opposed to reduced drug prices for everybody. I am want to enhance the services I provide my community. I am in the business of caring for you. My ultimate goal is to impact positively the lives of every customer that walks into my store. I want to give you value for your drug purchases. I want to be a professional!
The Ministry has me on my knees begging for redemption. The Ministry wants me to provide services to the community at a loss of 4 cents for every dollar I sell. How long do you think I can survive?
Please, before you make scathing comments about me and I my profession, make sure you get the entire picture. Don’t believe all the Ministry propaganda. They have an agenda, they are being squeezed by fiscal restraint and are they are using “Cheaper Drug Prices” to launch their election campaign. Who doesn’t want cheaper drugs? The agenda is politically motivated. The Ministry needs to address underfunding for pharmacy services if they are going to remove professional allowances.
I want cheaper drug prices too!
Sincerely and respectfully,
Dan Bachand.
A pharmacist concerned about your frontline healthcare.
Mr. Bachand there are a lot of numbers floating around, and none of us will see balance sheets for the various operations. With that said, does Loblaws not take a loss on one item, say milk, to get people into the store to buy other products, of which a profit is seen?
The underfunding is because the whole system is broken and taxpayers are at a point of tax saturation. A home owner would hold off buying a new car or shoes, but the governement just keeps spending. This has to stop, they have enough money, it just is not spent properly from everything including medication to pensions.
Mr. Milne, good information for thought! Farmers do get a bit of a handout and rightly so, though. License plates are cheaper or not needed in some cases, and fuel is cheaper than other industries.
The provincial liberals have been getting a pretty easy ride from the taxpayers, anyone up to change that?
Eric, the answer to your question will be after the next election here in Ontario. Nobody can be so stupid as to vote for anyone who brought us the HST (Heist Tax)