Stop the kickbacks

You’d think that13 years after Ontario banned pharmaceutical companies from bribing drugstore owners to stock their generic drugs, the practice would have been wiped out.

Not so, according to CBC’s The Fifth Estate, whose journalists went undercover as pharmaceutical company representatives to reveal that it is still prevalent in this province. It shouldn’t be. The fact is, the ban on kickbacks — or “rebates” as the industry calls them — should be strictly enforced in Ontario and introduced in other provinces as well.

That’s because rebates, which artificially inflate the price of generic drugs by up to 70 per cent, cost consumers, businesses and taxpayers across this country hundreds of millions of dollars every year.

Those unnecessary costs persist partly because only Ontario and Quebec have banned the practice. And also because drug companies keep circumventing the law in the largest provinces where it does exist. How bad is it? When CBC journalists went undercover and pretended to want to sell generic drugs to pharmacy owners in Ontario, eight out of nine of them outright asked for the illegal rebates.

It’s not just drugstore owners who profit. Pharmaceutical companies pay the kickbacks but make it all back — and more — by getting their products on drugstore shelves to the exclusion of their less deep-pocketed competitors.

Indeed, CBC taped conversations with three pharmacists that suggest this country’s largest pharmaceutical distributor, McKesson Canada, is engaging in the practice. The company acknowledged making payments to pharmacies but denied they are illegal “rebates.”

As one pharmacy insider put it: “No matter what you call it, money that is going from the manufacturer to the pharmacy at the end of the day is a rebate.”

The bottom line? Canadians in need of drugs should not be used to pad profits for drugstore owners or pharmaceutical companies, anywhere. It must stop.