5.11 Low Cost Alternative Program
[Policy revisions effective April 1, 2019]
General Policy Description
The Low Cost Alternative (LCA) Program established under the Drug Price Regulation is intended to ensure the best value is obtained for expenditures on multi-source drugs. The program works by limiting PharmaCare reimbursements for drugs subject to an LCA price.
Drugs included in the LCA Program may also be subject to the Reference Drug Program (RDP). Unlike the LCA Program, the RDP applies to drugs with different active ingredients that are in the same therapeutic category and are used to treat the same conditions.
The LCA Program group drugs into categories of products with the same active ingredient or combination of active ingredients, and the same strength.
Each category is assigned an LCA Price.
The maximum PharmaCare reimburses for drugs within the same LCA category is the lesser of the
- LCA Price, or
- RDP price (if the drug is also subject to the RDP)
>> Refer to the LCA Price.
Generic Drugs: Under the LCA Program, generic drugs are reimbursed as full benefits. PharmaCare does not cover generic drugs as partial benefits.
Brand drugs: Under the LCA Program, brand drugs are covered as partial benefits unless their list price is equal to, or less than, the LCA Price for the category, in which case they are eligible for reimbursement as full benefits. (Note: some exceptions apply)
For information regarding the drugs subject to the LCA Program (LCA categories, prices, benefit status, etc.) refer to the Low Cost Alternative (LCA) and Reference Drug Program (RDP) Data Files.
Pharmacists may also call the PharmaNet Help Desk for information on drugs subject to the LCA Program.
The LCA Price may be based on a pre-determined Maximum Accepted List Price (MALP), may be granted an exception to the MALP, or may be based on pricing resulting from the pan-Canadian Pharmaceutical Alliance (pCPA) Generic Initiative, effective April 1, 2018.
As described in the following sections, under the LCA Program, PharmaCare accepts two types of drug submissions from manufacturers:
- Regular submissions—in which a drug will be subject to the MALP for the category unless it qualifies for an exception to the MALP or for provisional listing.
- Submissions for a drug included in the pan-Canadian Pharmaceutical Alliance (pCPA) Generic Initiative—in which the generic drug is subject to a price limit under the initiative.
1. Regular submissions–drugs subject to the Maximum Accepted List Price (MALP)
For each LCA Program category, PharmaCare determines a maximum accepted list price (MALP) for generic drugs within the category.
Calculation of the MALP differs depending on when an LCA category was established.
PharmaCare may grant an exception to the MALP under certain circumstances.
MALP for LCA categories established on or after April 1, 2013
For LCA categories established on or after April 1, 2013, an LCA comparator is designated and used to determine the MALP for generic drugs in each LCA category.
The designated LCA drug comparator is the
- Brand drug in the LCA category when there is a single brand drug in the category
- Most cost-effective brand drug in the LCA category when there is more than one brand drug in the category
- LCA drug comparator of another LCA category consisting of drugs with the same active ingredient or combination of active ingredients but a different strength, when there is no brand drug in a category
- LCA drug comparator used by another jurisdiction (i.e., Ontario or other) if the addition or removal of a generic drug causes the LCA category to shift tiers in accordance to the Tiered Pricing Framework
Under Section 4 of the Drug Price Regulation, the MALP is calculated as a percentage of the manufacturer list price for the LCA comparator for that category.
Effective April 1, 2019, MALPs for LCA categories established on or after April 1, 2013, are calculated as follows:
- 25% of the LCA comparator list price for LCA categories consisting of drugs available as oral solids only
- 35% of the LCA comparator list price for any other LCA category
If an LCA category contains no brand drugs, the MALP for that LCA category is calculated as a proportion, by strength, of the MALP for the LCA category to which the designated LCA comparator belongs.
MALP for LCA categories established before April 1, 2013
For LCA categories established before April 1, 2013, a base price has been established in the Schedule to the Drug Price Regulation.
Under Section 5 of the Drug Price Regulation, the MALP is calculated as a percentage of the base price for each LCA category.
Effective April 1, 2019, MALPs for LCA categories established before April 1, 2013, are calculated as follows:
- 25% of the brand price for LCA categories consisting of drugs available as oral solids only
- 35% of the brand price for any other LCA category
If a drug in an LCA category had, as of July 1, 2010, a lower manufacturer list price than the calculated MALP for the LCA category to which it belongs, the MALP for that LCA category will be the manufacturer list price of that drug as of July 1, 2010.
In certain circumstances, PharmaCare may increase the effective MALP for a category from that initially calculated. (E.g., where proper documentation indicates that a manufacturer’s cost to produce and distribute a generic product is greater than the MALP).
PharmaCare will not consider a request for an exception if the drug is being supplied (or if the drug is intended to be supplied) in another jurisdiction in Canada at a list price that is equal to or lower than the MALP as initially calculated by PharmaCare, or at a list price higher than the list price submitted in another jurisdiction.
If no manufacturer commits to sell a generic drug at or below the calculated MALP for an LCA category, or if PharmaCare has significant concerns with the sufficiency of supply offered by the manufacturers committing to sell at or below the MALP, PharmaCare will review the exception requests and prices submitted by manufacturers for generic drugs in the category. Based on its review, PharmaCare may, at its sole discretion, take whatever action it deems appropriate, which may include, without limitation, one or more of the following:
- PharmaCare may grant an exception to the MALP requirement to the manufacturer(s) submitting the lowest list price, or a lower list price for any drug in the LCA category
- Where necessary to ensure sufficient supply for PharmaCare beneficiaries, PharmaCare may grant exceptions to more than one drug in an LCA category
- In such instances, drugs will be considered for coverage in order of submitted list price, with the lowest priced drug receiving first consideration
- Such exceptions are granted on a provisional basis, meaning that the exception may be rescinded at any time after PharmaCare has deemed a product to be accepted. If an exception is rescinded, manufacturers will have an opportunity to resubmit the product at any time
- PharmaCare may deem all generic drugs in the LCA category ineligible for PharmaCare coverage
- PharmaCare may deem all drugs in the LCA category ineligible for PharmaCare coverage
- PharmaCare may undertake a competitive process to ascertain the lowest price at which a manufacturer is prepared to supply the drug in question for PharmaCare beneficiaries
Impact of the MALP on eligibility for PharmaCare coverage
A generic drug that is, or would be, assigned to an LCA category and that has a manufacturer list price exceeding the applicable MALP is not eligible for PharmaCare coverage, unless an exception to MALP is granted on a provisional basis.
If a generic drug is deemed ineligible for PharmaCare coverage because the manufacturer list price exceeds the MALP, the manufacturer may resubmit the drug for reconsideration at any time. Temporary coverage may be provided to certain drugs under Section 16 of the Drug Price Regulation.
Drugs subject to the LCA Program that are determined to be ineligible for PharmaCare coverage are published in the “Non-Benefits” worksheet in the Low Cost Alternative (LCA) and Reference Drug Program (RDP) Data Files.
2. Submissions for Drugs Included in the Pan-Canadian Pharmaceutical Alliance Generic Initiative
On January 29, 2018, the pan-Canadian Pharmaceutical Alliance (pCPA) and the Canadian Generic Pharmaceutical Association (CGPA) announced a five-year initiative with participating provinces and territories, including British Columbia. Under this initiative, the prices of nearly 70 of the most commonly prescribed generic drugs were reduced effective April 1, 2018.
See specific pricing for drugs included in the initiative.
PharmaCare uses the LCA Program to implement pricing under this initiative.
PharmaCare does not cover a generic product subject to this initiative if its price exceeds that established under the initiative.
Products and pricing under this initiative are identified in the Low Cost Alternative (LCA) and Reference Drug Program (RDP) Data Files
The PharmaCare website provides regularly updated LCA Program and RDP drug information in downloadable spreadsheets and related documents.
For the LCA Program and RDP, PharmaCare typically provides at least 14 days prior notice of any changes to categories, included products, reimbursement limits and product benefit status via the LCA/RDP Updates Workbook on the website. (Note: 14 days prior notice for Tiered Pricing Framework price adjustments.)
All spreadsheets are in Microsoft Excel format. Users can sort and filter the file contents and import them into Excel or a database.
LCA and RDP spreadsheets, as well as the LCA/RDP Updates Workbook, are updated monthly and published on the website on the first Thursday of every month.
On occasion, a change to the LCA program or RDP may come into effect between the regular monthly updates, including but not limited to the
- Implementation of generic drug pricing adjustments; or
- Expedited implementation of coverage for significant first-entry generic drugs.
If a change to the LCA program or RDP comes into effect between the regular monthly updates, PharmaCare publishes updated versions of the LCA and RDP spreadsheets and the LCA/RDP Updates Workbook online.
Check the website on the first Thursday of the month and then again in the middle of the month to ensure you always have the most recent LCA/RDP information.
The PharmaCare LCA Program and RDP spreadsheets should not be considered an endorsement by PharmaCare of the interchangeability of any products identified.
The College of Pharmacists of B.C. has delegated the responsibility for determining the interchangeability of products to B.C. pharmacists.
Pharmacists are advised to consult with the prescriber to obtain the appropriate legal authority to dispense an LCA or RDP product.
If a patient’s prescription is for a partial benefit product, the pharmacy is encouraged to make the patient aware that there is a full benefit LCA or RDP product that provides the same or similar therapeutic treatment.
If the patient chooses the partial benefit product, they will be required to pay any cost in excess of the LCA or RDP price.
When being dispensed a drug subject to the LCA Program, patients have three choices:
- Obtain a full benefit product which will be fully reimbursed up to the PharmaCare maximum price (or RDP price, where applicable)
- Obtain a partial benefit product and pay any portion of the drug cost that exceeds the LCA price (or RDP price, where applicable)
Fair PharmaCare patients should be made aware that only the portion of the drug cost accepted for reimbursement by PharmaCare counts toward their deductible
- Have their physician request a Special Authority for full benefit coverage of a partial benefit product (refer to "Special Authorities for LCA Drugs," below), where individual circumstances warrant
The Special Authority process is designed to ensure access to drugs based on patient-specific needs.
If a particular patient has an allergy or intolerance to the non-therapeutic ingredients used in the majority of generic products in an LCA category, a physician may apply to PharmaCare for Special Authority for full benefit coverage of a brand name product in that category.
Special Authority is not provided on a retroactive basis.
When a Special Authority is granted, coverage is provided up to the PharmaCare maximum price for the drug, as reflected in the Maximum Pricing Policy.
A Special Authority does not override plan deductibles or co-payments.
>> See the PharmaCare web page for Special Authority process and criteria for specific products.
Shortages of a particular full benefit product in an LCA category may be addressed by stocking a different full benefit product within the same category for the duration of the shortage.
If a shortage impacts all of the full benefit products within an LCA category, PharmaCare will verify the shortage with the manufacturers and determine the expected duration. When such a shortage may impact the availability of a sufficient supply of full benefit products, PharmaCare will implement measures to ensure supply needs are met. These measures will be communicated to pharmacies and may include:
- Temporary removal of the Special Authority requirement for full coverage of partial benefit product(s) in an LCA category;
- Temporary PharmaCare coverage of a product or products not currently listed for coverage in an LCA category; or
- Other measures to ensure a sufficient supply for PharmaCare beneficiaries.
Since most shortages are of limited duration, it is recommended that pharmacies confirm the anticipated duration of a shortage before ordering an inventory of a drug provided a temporary change in benefit status. When a shortage is over, PharmaCare will rescind temporary changes in benefit status with minimal notice.
Pharmacies should contact the PharmaNet Help Desk to report shortages or inquire about measures being taken to address a shortage.