Government, Pharmacists Extend Funding Agreement

A first-of-its-kind pharmacy funding framework that has successfully reduced government’s health-care costs will be extended for another two years.

The framework, announced last year between the Alberta government and the Alberta Pharmacists’ Association, was set to expire March 31, 2020, but will now be extended to March 31, 2022.

Measures previously introduced under the framework have helped to ensure pharmacy compensation is within government’s projected budget.

It also saved Albertans money. More than 8,700 seniors are saving more than $100 a year thanks to the agreement, and that will continue for another two years. In some cases, an individual with significant prescription costs is saving more than $500 a year.

Pharmacists play a key role in primary health care, not only in meeting the needs of patients but also in helping manage health resources wisely.

Government will continue to work with the Alberta Pharmacists’ Association and Alberta Blue Cross to monitor expenses and ensure budget targets are met.

“The framework’s success demonstrates the power of collaboration and how, together, we can create a sustainable health system. I’d like to thank the Alberta Pharmacists’ Association and Alberta Blue Cross for working with us to manage budgets responsibly. I’d also like to thank pharmacists for supporting these measures and providing Albertans with continued, high-quality pharmacy services as key leaders in primary health-care delivery.”

~Sarah Hoffman, Minister of Health

Pharmacy compensation growth will be kept to 5.3 per cent over the two-year extension to accommodate population and volume growth.

Funding for pharmacy compensation was forecast to rise by 12.3 per cent annually between 2018 and 2020.

“We are pleased that this announcement recognizes the efforts made by pharmacists in Alberta to deliver primary care in ways that manage health resources responsibly. The role pharmacists continue to play in this capacity has resulted in achievement of government-budgeted targets, allowing for the elimination of the hold back policy in 2020 and enabling a formalized engagement process between Alberta Health and RxA members towards sustainable growth for the future.”

~Mark Elderkin, president, Alberta Pharmacists’ Association

“Alberta Blue Cross is proud to be part of the collaborative efforts with the Alberta government and the Alberta Pharmacists’ Association in the shared interest of continued sustainability and keeping prescription drugs affordable for all Albertans. As the largest payer of prescription drugs in Alberta on behalf of our customers – including individuals, employer group benefit plan sponsors and government programs, Alberta Blue Cross has a keen interest in, and commitment to, delivering the best value in health benefits to our customers.”

~Ray Pisani, president and CEO, Alberta Blue Cross

Quick facts

  • The same rates for pharmacy compensation will apply during the extended time period.
  • The original agreement, signed in 2018, was projected to save $150 million by slowing the growth of spending on government-sponsored drug programs, and savings are expected to continue with the extension of the funding framework.
  • Government will continue to work with the Alberta Pharmacists’ Association and Alberta Blue Cross to monitor expenses and, if necessary, implement tailored adjustments to ensure budgets are not exceeded.
  • A new risk-sharing component (with government holding back a portion of payments to pharmacies each month to ensure budget targets are met) will be introduced April 1, 2019 as planned, but because budget targets were met last year and are forecast to continue being met in the next fiscal year, government will hold back zero per cent for the first quarter of 2019-20. It will continue to be held at zero per cent throughout the fiscal year unless budget targets are not met.
  • On April 1, 2020, the risk-sharing component will be eliminated and replaced with a jointly agreed upon mechanism to ensure pharmacy compensation growth is within government’s projected budget.