March 12, 2013 Mr Frank Klees, MPP (Newmarket-Aurora) Hunters Gate 14845 Yonge St, Suite 201 Aurora,

ON L4G6H8 Dear Mr Klees, I am writing to you on behalf of community pharmacy. In 2010 you heard directly from pharmacists throughout the province and rose in the Legislature to support them. Today pharmacies are being swindled by the Executive Ocer of Ontario Drug Benets without recourse except to our representatives in the Legislature. I hope we may still count you as a friend. The government has treated the profession of pharmacy in much the same way that they have treated education: they legislated when negotiations became inconvenient. The acquisition of goods at a discount has been criminalized and pharmacies must depend upon mark-up and meagre professional services fees alone. The law provides that Ontario pharmacies are owed an 8% mark-up on drug products and a reasonable dispensing fee. The Ministry of Health and Long-Term Care does not hold to that. You will nd in my letter dated March 6, 2013 that Ontarios public drug programs use a pricing policy that is opaque at best. The Ontario Drug Benets price (DB price) is a price set by the Executive Ocer and generally the lowest cost submitted by a drug manufacturer for the drug. This is xed rmly against pharmacies. The prices accepted by the Executive Ocer must by no means reect the true cost of acquiring that drug. Most brand-name drugs are available only through a wholesaler. Community pharmacies cannot acquire the drug at the drug benet price and I question if any pharmacies at all can. Pharmacies are fortunate if they are paid half of their due for brand name drugs: Drug Advair Diskus 50/500 Flovent 250mcg Celebrex 200mg Arthrotec 75/200 DB Price $136.27 $82.54 $1.3932 $0.8403 True Price $143.90 $87.16 $1.4712 $0.88736 Mark-up Paid 2.25% 2.27% 2.27% 2.7%

The manufacturers of these drugs, GlaxoSmithKline and Pzer, will not sell their product to a pharmacy at the drug benet price. The Executive Ocer sets the drug benet price and is free to match it to the true acquisition cost. It is impossible for a retail pharmacy to acquire these asthma and arthritis medications at the drug benet price. NovoRapid insulin cartridges are reimbursed at a paltry 2.27% mark-up. Mark-up on Levemir insulin cartridges is even lower at 2.1%. Humalog insulin cartridges are reimbursed at 2.3% mark-up. These are some of the most common insulin injections used by diabetics in this province. The manufacturers of these products do not have the requisite licensing to sell their products to pharmacies. The drug benet price is based on an utterly farcical ex-factory price that is substantially lower than their true cost. The Executive Ocer is cheating highly-qualied healthcare professionals and lying to the people of Ontario. A drugs drug benet price is the amount set by the Executive Ocer as the basis for calculating the amount owing to the pharmacy. It is negotiated between the drug manufacturer and the Executive Ocer as part of a listing agreement. In committee you once asked:

I wonder if we could have legislative research provide a report to the committee that details the rebates that are being paid to the government by the brand companies on a line-by-line basis for the drugs for which theyve contracted with the government. May I ask if this data was ever made available to you? The Executive Ocer has deliberately sealed such information to the public by Ontario Drug Benets Act Regulation 201/96. To wit: 4. In addition to the applicable conditions under paragraphs 1 and 2, if applicable, and if required by the executive ocer, the manufacturer of the product shall enter into an agreement with the executive ocer that species any volume discount or other amount that may be payable by the manufacturer to the Minister of Finance, and shall agree that the executive ocer may make public the following information, and that information only, with respect to the agreement: i. The name of the manufacturer. ii. The subject-matter of the agreement. iii. The fact of entering into or terminating the agreement. O. Reg. 459/06, s. 6; O. Reg. 559/06, s. 1 (1); O. Reg. 355/08, s. 1 (1); O. Reg. 356/08, s. 2; O. Reg. 220/10, s. 2 (1-4). This is a far cry from the principles of transparency in governance that the government professes to adhere to. The Ontario Drug Benets Act provides that: (3) In every year, (a) the executive ocer shall make a report in writing to the Minister concerning the Ontario drug programs; and (b) the Minister shall publish the report within 30 days of receiving it. 2006, c. 14, s. 7. You will nd that no such report has been published by the Minister online for ve years. The Ministry of Health and Long-Term Care last published a 2007/2008 Interim Report Card. This is an aront to public accountability and to governmental transparency. Sir, this disclosure is required by the governments Transparent Drug System for Patients Act, 2006. The annual budget overseen by the Executive Ocer is approximately $3.5 billion and no public report is made for this money. Doctor Chris Mazza seems forthcoming in his stewardship of ORNGE by comparison. I entreat you to give these matters your attention. Ontario Drug Benets is a public organization that fails basic tests of transparency and accountability led by a Minister with a dubious record thereof. It is unconscionable to discuss raising some seniors co-payments whilst these questions remain unanswered. Now is the time to hold the government accountable for $3.5 billion in annual spending and treat our pharmacists with the respect that they have surely earned.