When pharmacist Rita Lyster moved into her new Main Street premises she was realizing a business dream.
It represented a huge investment. As the building was bigger than her previous location nearby it meant higher rent.
But it also meant a better work environment and space for expansion, including rooms to rent for a foot care specialist, masseur and psychologist. The possibilities were many and exciting for her and her staff.
Then came a shock – in the form of the March 7 provincial budget – which has left her facing a different, more cash-strapped future than the one she envisaged.
Now she is contemplating a reduction in staff working hours in a bid to rein in costs.
She also says budget cutbacks will alter the way pharmacists do business; it could force them to become more like lawyers, charging for advice and services once offered for free.
It has raised concerns that some pharmacies might lose customers.
“It’s worrisome to all of us as a profession because as the income level of what pharmacies generate goes down we face layoffs and hiring pharmacist technicians or assistants that get paid less,” said Lyster.
“It is also going to have a spin-off effect in safety. For while we always do our best not to make mistakes, if less qualified staff are doing jobs then the chance of a mistake increases.”
Lyster said the budget decisions – announced ironically in Pharmacy Awareness Month – came out of the blue.
“Our negotiating team was completely blindsided by the announcement,” she said.
Collin Grant, owner of Fyfe’s Friendly Pharmacy, could see some businesses in the province collapsing under the weight of extra financial burdens imposed by the budget.
“The way the budget was presented to us wasn’t right,” he said.
Rita’s Apothecary and Home Healthcare Ltd. and Fyfe’s are the town’s only independent pharmacies. The others are part of chains: Rexall, Co-op and the IGA.
Barrhead’s IGA pharmacy manager Gerald White believed the budget had big implications for pharmacists everywhere. He could foresee charges for certain services being passed on to customers.
The Co-op’s pharmacy manager Deb Mustard echoed concerns about the budget’s impact on our businesses.
Last Thursday, pharmacists from around the province took part in a protest march on the Alberta Legislature in Edmonton. Lyster closed up her shop and rented a bus to take local protesters.
Her hopes of a big local turnout, however, were not realized. The bus, with room for 54 people, arrived in Edmonton with just three on board.
Pharmacists of Alberta Unite!, the group behind the march, had a list of five requests for government. This included reinvesting in pharmacy by adequately reimbursing pharmacists for clinical services and releasing the limit of billing one service per day.
Marchers wore white lab coats in a display of solidarity against a budget that reduces generic drug prices from 35 per cent to 18 per cent of brand name drug prices.
New prices for six drugs will take effect April 1. The drugs include Atorvastatin for high cholesterol; Ramipril for high blood pressure; Venlafaxine, an anti-depressant; Amlodipine for high blood pressure and angina; and Omeprazole and Rabeprazole, which both gastrointestinal medications.
Other drug prices will go down on May 1.
Health Minister Fred Horne has argued that lowering prices will save the province $90 million and bring down costs for consumers.
So why does this latest decrease upset pharmacists? And why did they take to the streets?
Lyster, a pharmacist for 33 years, explained the evolution of the complex funding model for her profession.
She said traditionally pharmacies have been paid through a system of professional fees negotiated by government and Blue Cross insurers.
“You come into the pharmacy, get a prescription filled and the pharmacy charges you the cost of the ingredient, plus a professional fee,” she said. “That’s how the pharmacist gets to pay the rent, keep the lights on and pay their staff and all of those things.”
Under this system, said Lyster, customers had come to expect certain free services.
For example, if someone had a bad cold, the pharmacist would give advice.
“The pharmacist doesn’t charge you for that service because in the background they are getting professional fees for the prescriptions,” she said.
The professional fee has only been increased by 52 cents since 1991, said Lyster.
She added that pharmacists also used to benefit from a system of markups on inventory, but in the mid-1990s government eliminated this, leaving pharmacists reliant on professional fees.
It was then that the “knights in shining armour” appeared in the form of generic drug companies, who were competing for business, said Lyster.
“They told us that if you use our drugs we will give you a rebate,” she added.
The rebates have formed a major pillar of pharmacy funding, said Lyster. If pharmacists buy enough drugs in special volume deals, the suppliers will send them back money worth 40 to 50 per cent of the purchase.
Over the past two years the Alberta Pharmacists’ Association has supported the government as it decreased generic drug prices from 75 per cent to 35 per cent, with the changes occurring in a controlled fashion, allowing pharmacists to make adjustments. But this didn’t happen with the latest decrease, said Lyster.
Instead, a unilateral decision was made to decrease prices. Since the move cuts into drug company profit margins, rebates to pharmacies are reduced.
Lyster said government did reinvest some savings in the pharmacy industry by introducing clinical fees. For example, pharmacists would get money for preparing a complex care plan or refilling prescriptions.
However, the money does not compensate for the time it takes to do the work or the decrease in rebates, said Lyster.
“Pharmacists’ wages are around $50 an hour on average, for some it is less, some more, depending on experience,” she added. “It’s a bit of an economic dilemma for us.”
So how will she tackle this dilemma?
She said she will have took at her financial statements and decide whether to start charging the customer for services.
“I don’t want to do it too quickly because I don’t want to drive people away,” she said.
“At this stage we are trying to raise awareness and remind the government what they have done.”
Lyster said customers were being asked to fill in forms outlining services just provided for them by local pharmacists.
The forms – which state that the services will no longer be free because of budget cutbacks – are being sent to Barrhead-Morinville-Westlock MLA Maureen Kubinec. Concerns will also be raised with Health Minister Fred Horne.
Lyster said she did not know what the extra charges will be.
“I’m going to have to think what my time is worth,” she said. “What is five minutes of my time? Maybe it’s $20, maybe it’s $30, maybe people will need to make appointments. I really don’t know.”
“We are going to have to get really efficient,” she added. “It’s all a volume game. We will have to fill in lots of prescriptions with the least staff possible.”
For Lyster the timing of the budget decisions is unfortunate following her recent business relocation.
“I am a bit frustrated,” she said.
It is just three years since Lyster branched out as an independent pharmacist after a career that has seen her work at Fyfe’s, the former Medicine Bottle, the Co-op and in Westlock, Mayerthorpe and Swan Hills. She now employs six people – four full-time equivalences.
“I am concerned about what has happened,” she said. “I am frustrated and anxious. Pharmacy has been hit hard and there has been a misconception that we are rolling in dough, and we are not. We have been chiselled away at and changes are imminent about how pharmacy is going to move forward.”
Lyster has faith that the present difficulties can be overcome. One thing, however, is clear.
It is unlikely to be business as usual.
