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Ontario Takes the Lead in Drug Reform

Canadian Health Ministers reached an agreement in September to plan and develop a purchasing alliance that will be responsible for negotiating prices for prescription drugs and medical supplies across provinces and territories. Ontario's government will lead the way on the drug purchasing aspect of the agreement, as the province is one of the largest prescription drug buyers in the world. Furthermore, Ontario Health Minister Deb Matthews has experience in securing lower prices; in early 2010 she banned professional allowances—rebates given by generic drug companies to pharmacies to stock their product—that totaled about $750 million annually and that the Ontario government says were driving up drug prices.

Although it is too early to estimate how much money could be saved with a purchasing alliance, the provinces and the federal government are interested in cutting costs. The provincial and territorial governments spend more than $10 billion annually on prescription drugs, and last year the federal government spent approximately $600 million on drugs and supplies.


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