Dispensing fees exceed drug cost in seniors homes

Ontario pharmacies were paid more than $1 billion to dispense $800 million in drugs, records show

YorkRegion.com
Sept. 10, 2016
By Moira Welsh

It costs more to dispense drugs to people living in Ontario nursing homes than the cost of the actual medication, a Star investigation reveals.

More than $1 billion in fees were paid to pharmacies in the past five years to dispense $800 million in drugs to residents in Ontario's long-term-care homes, according to records obtained by the Star.

The dispensing costs, which are paid to pharmacies that have a monopoly on the nursing home business, are shared by taxpayers and residents.

"It's appalling. I'd like to know why somebody in the ministry isn't doing something about these excessive costs," said Margaret Calver, who is keeping a close watch on the pharmacy bills for her 80-year-old husband, Wayne, a retired school board superintendent who is now a resident of Markhaven Home for Seniors in Markham.

In just one example, his pharmacy bills show weekly charges of $5.57 to provide him with seven antidepressant pills that, in total, cost 75 cents.

There are two reasons why the dispensing costs to Ontario's 77,000 nursing home residents are so high - much higher than they would be if the seniors were living at home.

First, the pharmacies with a lock on nursing home business generally provide drugs weekly to residents of the homes, rather than filling prescriptions monthly.

That means they charge the Ontario Drug Benefit Plan four times the usual dispensing fees per drug each month. The pharmacies and Health and Long-Term Care Minister Eric Hoskins say this is because of frequent changes to medications in nursing homes, but Calver and critics of the charges say many residents have identical prescriptions week to week.

Second, unlike retail drugstores servicing seniors living at home, the pharmacies servicing nursing homes generally charge a "co-payment," a $2 charge tacked onto each prescription. Several years ago, most retail pharmacies in Ontario stopped charging this co-payment to seniors living in the community.

To probe this issue, the Star asked the Ministry of Health and Long-Term Care for a breakdown of drug costs and fees related to long-term-care homes.

The data shows that over the past five years, pharmacies charged nursing home residents about $250 million in $2 co-payment fees - roughly $50 million per year.

If seniors went to a Shoppers Drug Mart, for example, at their local plaza, those co-pay fees would be waived. Shoppers' advertisements highlight a "$0" co-pay fee, saying, "We'll reduce your prescription fees."

Nursing homes are serviced by a special group of pharmacy "fill sites," often housed in lowrise buildings in commercial areas. These pharmacies have exclusive contracts with nursing homes. The health ministry said it does not know how many companies provide this service. Two of the larger players in this business are MediSystem and Medical Pharmacies Group.

MediSystem is the long-term-care pharmacy for Markhaven Home for Seniors, where Margaret Calver's husband, Wayne, who has Alzheimer's disease, has lived for seven years. The company was owned by Shoppers Drug Mart until 2014 when Loblaw purchased Shoppers and took ownership of MediSystem.

A retired teacher, Margaret Calver has made a study of her husband's drug invoices, looking out for the affairs of a man who, before dementia set in, was a "creative, innovative and global thinker." She didn't like what she found.

Calver discovered $2 co-pay fees were charged on each prescription during the first week of every month. After complaints to MediSystem, Calver said the company agreed to drop the fees. They still appear on other residents' bills. That dropped her husband's weekly dispensing fee from $7.57 to $5.57 for a week's worth of antidepressants - still too much, Calver says.

"I no longer pay the co-pay - and I don't want anyone else to pay it either," Calver said. "It's just a cash grab and nothing else."

The health ministry gives pharmacies the right to charge co-pay fees or waive them.

"It is an individual business decision to waive the co-pay," said Tammy Smitham, a spokeswoman for Loblaw and Shoppers Drug Mart. In a followup email, Smitham said MediSystem has a committee that evaluates co-payment fees and "may make accommodations, like waiving a co-pay, for compassionate reasons."

A member of Markhaven's family council, Calver has collected drug invoices from the spouses and children of residents in numerous nursing homes. All show the same charges.

Those fees have grabbed the attention of seniors' advocates.

"Co-payment fees are discrimination," said Jane Meadus, a lawyer with the Advocacy Centre for the Elderly.

"Pharmacies waive the $2 fee if you live in the community, but if you have a disability and live in a long-term-care home, there are negative consequences. That's not right," Meadus said.

In addition to the $250 million in co-payment fees paid over the past five years, taxpayers were charged $750 million in dispensing fees over the same period, according to ministry data.

Ministry guidelines describe "dispensing fees" as amounts paid to pharmacies to provide the drugs, discuss treatments with the patient, and to pay for the general operating costs of running a pharmacy. While pharmacists in community stores regularly counsel patients, pharmacists from the "fill sites" do not, the Star found.

Smitham said nursing home residents require weekly dispensing because long-term-care residents have "complex medical regimes" that are "frequently subject to monitoring and adjustment."

According to the president of the association that represents nursing home doctors, some drugs, like insulin or antibiotics, require weekly prescriptions. "On the long-term scheduled medications, the physician wouldn't be prescribing or renewing them weekly, they would review them every three months," said Dr. Evelyn Williams, president of Ontario Long Term Care Physicans.

The health ministry's Mark Nesbitt said the government does not regulate the frequency of dispensing fees, but said the charges "may be covered" in contracts between the nursing home and pharmacy.

Markhaven, where Wayne Calver lives, says its contract with its pharmacy makes no mention of billing or the frequency of dispensing fees. "That is the jurisdiction of the Ministry of Health," said interim executive director Mike Bakewell.

Margaret Calver has power of attorney over her husband's medical care and said he has been taking the same drugs for years, with few weekly adjustments. "I know because the only changes that have been made are when I initiate them," she said.

Meadus acknowledged that short-term packages of pills save money, leaving behind less waste if a resident dies, but said the province must still find ways to limit the charges to taxpayers and residents.

Kathy Pearsall, a spokeswoman for Concerned Friends of Ontario Citizens in Care Facilities, said the Star's investigation shows that "not only are the residents being gouged, but so are the taxpayers of Ontario."

MediSystem told the Star it provides regular "often weekly in-person visits to the home," which usually involves consultations with staff, not families. "We are available to families 24/7," a MediSystem spokesperson said.

But Calver said she has never heard of that option. "I have never had a consultation with a MediSystem pharmacist at Markhaven in the almost seven years I have been dealing with them."

Carla Beaton, of Medical Pharmacies Group, said pharmacists often make weekly visits to consult with staff at long-term-care homes, although families may not know this. "We don't do a good enough job tooting our horn and saying we are available," Beaton said.

All long-term-care pharmacies charge weekly dispensing fees, said Beaton, a geriatric pharmacist and company vice-president. MediSystem, the pharmacy owned by Loblaw, has eight "fill" sites in Ontario, where it packages drugs for residents of nursing and retirement homes. The Toronto site is located in a lowrise factory building. MediSystem invited the Star to tour the site, where staff, including pharmacists and pharmacy technicians, fill electronic orders using automated packaging and a "visual inspection software" quality control system.

The tour was offered after the Star began asking Loblaw about the weekly dispensing fees. MediSystem vice-president of operations Jennifer Casu defended weekly dispensing, saying it is necessary for the safety of acutely ill residents. But the company data she used to support the practice showed that 83 per cent of MediSystem's 8,000 Toronto-area clients only need a prescription change once (or more) every three months.

MediSystem suggested the Star contact Dr. Ramesh Zacharias, the medical director of the Village of Erin Meadows long-term-care home in Mississauga. Zacharias said he has no business connection with MediSystem, but is in regular contact with its pharmacists for the "frequent" changes he makes to resident medications. Comparing long-term-care pharmacies to retail drug stores is "like comparing apples to trees," Zacharias said.

The Star also contacted SmartMeds Pharmacy Inc. of Burlington, which bills itself as a "leading provider" of pharmacy services to long-term-care homes in southern Ontario. Owner Jason Handa did not respond to interview requests.

Meadus and her advocacy office are calling for the health minister, Hoskins, to place limits on weekly dispensing and ban co-payment charges.

"The Ministry of Health and Long-Term Care needs to address this issue immediately by eliminating the (co-pay) cost to residents, and reviewing the present prescription practices and the government's costs, which money could be better spent on individual care," she said.

Calver is hoping the government will take action.

"It's ridiculous that the ministry allows the pharmacies to get away with this," she said. "Whenever I hear on the radio that the health-care system is stressed for money, I think yes, well, I know where it's going."

In addition to the dispensing and co-payment fees, the Star discovered that the Ontario Ministry of Health paid pharmacies another $90 million during the same five-year period to cover professional service fees (consulting with homes) and $60 million to cover the cost of acquiring drugs from the wholesaler.

An emailed statement from Hoskins on Friday reveals the health minister stands by the pharmacy practice to charge weekly dispensing fees.

"The ability to allow weekly dispensing of drugs over a monthly model not only reduces drug waste from changing prescriptions, but it also allows the long-term-care home and its residents to establish a stronger, more consistent relationship with their pharmacist."

Toronto Star