Since it began playing hardball with the pharmaceuticals industry, Dalton McGuinty's government has saved Ontario taxpayers hundreds of millions of dollars.
There's only one small problem. Those Ontarians who don't qualify for the Ontario Drug Benefit - which is to say, most people under the age of 65 - are now paying more as a result of their government paying less.
According to industry observers, the costs of company drug plans are rising by 10 to 15 per cent annually. The result is that those plans are covering less, with Ontarians who don't qualify for the ODB forced to pick up a growing percentage of prescription prices.
It wasn't intended that way. But since Bill 102 overhauled the province's prescription policies four years ago, the consequence has been a large discrepancy between what the public and private drug plans pay for both brand and generic pharmaceuticals.
The phenomenon is more pronounced on the generics side, even if most Ontarians probably aren't aware of it.
It's on those drugs that pharmacies make most of their money, because generic manufacturers compete by offering enormous rebates in return for stocking their identical products. Aware that those rebates were creating an artificially high cost, the government moved to restrict the rebates to 20 per cent of the retail price. But it only imposed that rule for drugs purchased by the ODB, which allowed pharmacies to make up for their loss on those sales by demanding higher-than-ever rebates on private ones.
As a result, while the government is paying much less for generics than it used to, private plans and cash-paying customers have seen prices go up by nearly an equivalent amount.
On brand drugs, the effect has been more subtle. But it's still significant.
As reported last week, the government has achieved savings by striking deals with manufacturers in which it lists drugs for a certain price, pays that amount, and then gets part of the money back through secret rebates.
In some cases, the government has made clear that it doesn't believe new products are enough of an improvement over existing ones to merit paying the going rate. But once drugs are covered by the ODB, doctors are much more likely to prescribe them. Private plans are then expected to cover them - but at the listed price, not the discounted one.
In other words, on top of the hundreds of millions in extra generics costs, private payers are now buying expensive new drugs that the government has effectively acknowledged aren't worth the price.
The system has evolved this way without most Ontarians noticing, because there's no organized lobby protesting the rising private costs. Nor is there much indication the provincial opposition has wrapped its head around the issue, let alone figured out how to communicate it in a couple of sentences.
That kind of attention is especially conspicuous in its absence, because Mr. McGuinty's officials are in Round II of their fight with pharmacies to lower generics costs.
The government's aim is to lower the price of generic drugs to 25 per cent of the brand equivalent (the ODB currently pays 50 per cent). It intends to do so by eliminating altogether the rebates paid by manufacturers to retailers. And its starting position is that it wants to get the same deal for private plans as for the public one.
But then, that was the government's starting position last time as well. And when push came to shove, it settled for worrying about its bottom line.
It's unlikely that the Liberals will completely hang the private side out to dry again; for complicated reasons, they believe even the public costs are driven up by the enormous rebates on the private side. But in the absence of political pressure, it's unlikely they'll go to the wall for those outside the ODB either.
The government would argue, not unreasonably, that past a certain point private costs are up to the private sector to worry about. But it might help if anyone were paying attention to how and why those costs are rising.