04/11/2013 02:27 EDT | Updated 06/11/2013 05:12 EDT

Alberta government says won't blink on drug price cuts despite Big Pharma squeeze

EDMONTON - Alberta Health Minister Fred Horne says he will stay the course to lower drug prices for consumers despite what he is calling a squeeze play by Big Pharma.

"These companies sell all over the world. They sell at prices over a thousand times less than Alberta for the same drug," Horne told reporters Thursday.

"They're on thin ice in terms of claiming 18 per cent is an unreasonable price point."

On May 1, the government is cutting in half the price its sets for generic drugs — from 35 per cent to 18 per cent of brand-name equivalents — to reduce drug costs for Albertans and save the province $90 million a year.

Horne says the market will bear this — but pharmacists say it cuts too deep into their bottom line and will lead to staff layoffs or even pharmacy closures.

Earlier Thursday, more than 300 pharmacists and patients rallied at the steps of the legislature, demanding the province rescind the 18 per cent plan.

"Patients come first! Patients come first!" they chanted, some holding up signs comparing the Tories to price-controlling communists.

Wildrose Leader Danielle Smith and Liberal Leader Raj Sherman both told the crowd they will continue to fight for them.

"We've been telling the minister that his 'Fredicare' plan — as we're calling it — won't lower drug costs. It will increase drug costs, especially for patients out of pocket!" Smith, speaking through a megaphone, told the shivering, cheering protesters.

Both the Liberals and the Wildrose say the expected $90 million in savings will be washed out because drug suppliers will just hike the cost of other drugs or stop supplying some medications altogether.

Pharmacist Shane St. Arnault from Redwater was at the legislature protesting. He said if there has to be a cut, it should be less drastic, perhaps from 35 per cent to, say, 25 per cent.

"Some medications can be cut down to 18 per cent. A lot of medications cannot be produced at 18 per cent," said St. Arnault.

"So what happens? Companies are gonna decide that they can't make things at a loss. They're going to be discontinued. And we've already seen that," he said.

"Companies are saying, 'We just can't afford to sell (some drugs) in Alberta.'"

Under the current system, if the government and suppliers can't agree on a drug price, the drug is delisted by the province — but not until a replacement medication is lined up.

However, Horne's ministry confirmed that this past month 13 suppliers promised to provide a replacement to delisted drugs only to later come back and say they couldn't supply the drugs after all.

Horne labelled it a power play by Big Pharma unconnected to any fine line between profit and loss.

"This sort of resistance from big pharmaceutical companies is not new in Canada. It should be expected," he said.

"Even at 18 per cent, for our top 20 generic drugs we're paying about $40 million more than a country like New Zealand or Australia."

As an example, departmental price comparisons show that for the drug Pantoprazole — used to treat ulcers and gastroesophogal reflux — Albertans currently pay 78 cents per 40 mg dose.

That will drop to 40 cents a dose next month under the 18 per cent rule — but even then it will be demonstrably higher than the United States, where consumers pay 10 cents a dose, and New Zealand, where patients pay five cents a dose.

Horne said the government won't change course.

"The prices for the month of May for generic drugs in Alberta are posted at 18 per cent," he said.

"That's the price that we've set and over time that's what companies are going to have to expect if they want to sell in Alberta."

Horne was backed by Premier Alison Redford.

Redford pointed out that while the generic drug payouts are dropping, the province is getting pharmacists more involved with patient care by allowing them to renew prescriptions and manage drug plans — and bill for those services.

"Change is difficult, but I think we're going to work through it," said Redford.

"The policy objective here is to ensure that drug costs are lower for Albertans, and that's what we're doing."

There were also protests in Calgary and Red Deer.

Max Beairsto, a pharmacist from Blackfalds, was among the 25 protesters in Red Deer. He said the plan puts patient care in jeopardy.

"It has presented us with an unsustainable model and the very businesses in which we provide the care are at risk of closing."

— With files from CKGY