A System Of Bribes

Loyalty cards that encourage patients to buy brand-name drugs have forced Canada’s private-insurance plans to spend nearly 50 per cent more than they would have if patients had filled their prescriptions with cheaper generics, new research has found.

A University of British Columbia study that examined more than 2.8 million prescriptions for 89 medications is the first to reveal the financial impact of the discount cards that pharmaceutical companies began promoting at the start of this decade, when patents expired for a slew of brand-name drugs.

The discount cards – which patients can get from doctors and pharmacists or by signing up online – barely affected government drug spending in Canada, and actually benefited some Canadians who paid out of pocket.

But the cards took a major toll on private-insurance plans, leading those plans to spend, on average, $23.09 more per prescription than they would have if their members had picked a generic instead.

“Ultimately, that’s going to raise the premiums in those plans and that’s going to come up the next time [workers] go into collective bargaining,” said Michael Law, lead author of the study and a UBC professor who holds a Canada Research Chair in Access to Medicines.

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