IF YOU FIND THE ISSUE confusing, you’re surely not alone. And it’s also full of complexities.

The issue is the current battle between the Ontario government and the province’s pharmacies over the cost of some prescription drugs and the “professional allowances” manufacturers of generic drugs pay pharmacies for stocking their products.

The issue is at least potentially confusing because of all the publicity given the fact that prescription drugs tend to cost a lot less in Canada than in the United States. Yet now we’re being told that a drug doctors routinely prescribe to lower high blood pressure costs about five times as much in Ontario as in the U.S. and about 20 times the price charged for the same drug in New Zealand.

Well, the explanation seems to lie in the differences in both patent laws and Ontario’s traditional approach to pricing generic drugs.

Patent laws in the U.S. have allowed producers of patented pharmaceuticals to charge whatever they please for those products.

Our reputation for cheaper prescription drugs lies in the fact Canada’s patent laws aren’t yet as strong as those south of the border, but where they apply can be equally punitive to patients. As one outrageous example, the price charged for Thalidomide, the drug prescribed for pregnant women until half a century ago it was found to cause horrific birth defects, has soared following the discovery if its effectiveness in battling a rare form of bone cancer. The patent holder, New Jerseybased Celgene Corp., now charges about $30 for a 50-milligram tablet, which patients often must take four times daily, while a firm that has the Mexican patent charges less than $2 for its 100 mg pills, making the cost per day for 200 mg about $3.80 instead of $120.

But patents play no role in the dispute between Queen’s Park and the province’s pharmacists, since the drugs in question are all generic.

Without a doubt, the current situation is unpalatable and something needs to be done.

The McGuinty government has decided that the answer lies in reducing the price of generic drugs to 25 from 50 per cent of the brand-name equivalents while ending the “professional allowances,” which might be seen as a euphemism for kickbacks that cost the drug manufacturers roughly $750 million a year.

The “allowances” have long been an embarrassment to the profession, and undoubtedly push up the manufacturers’ costs, which are passed on through higher prices for those who pay upfront for their own medications, as well as by private drug plans and the Ontario government, which covers the prescription drug costs of seniors and those on social assistance.

In 2006, the government used its purchasing power to cap the prices it would pay generic manufacturers at 50 per cent of the brand name drug being copied, and compelled pharmacies to disclose how much they were getting in professional allowances.

But these price caps only applied to transactions under the Ontario Drug Benefit Plan, covering seniors and social assistance recipients. Private drug plans and individual purchasers were left wondering why generic drugs weren’t as cheap as they used to be.

Under the proposed provincial legislation, the professional allowances will gradually be banned across the board for drugs sold inside or outside the government plan. By 2014, prices will be capped at 25 per cent of the cost of the brand name drugs being copied for all prescriptions.

Although this may be seen as good news for consumers, it will more likely turn out to be a mix of good and bad.

Although the government says it will compensate pharmacies by raising dispensing fees, there seems little doubt that all drug stores will witness a shrinkage of their profit margins and that some smaller pharmacies that rely heavily on prescriptions will no longer be profitable and have to close.

Beyond that, it’s likely other drug chains will follow the lead of Shoppers Drug Mart, which says it will close some stores, reduce their hours of service and hire a lot fewer summer students.

Although negative impact on consumers clearly could be significant, there’s surely no doubt that ways must be found to curb spiralling health costs or that prescription drugs are a big part of the problem.

To partially offset the negative effect of the changes, the government plans to offer them some sort of premiums in addition to budgeting an extra $100 million for pharmacists who go beyond just dispensing drugs by counselling clients and treating minor ailments. But the initial reaction from the pharmacies is that those moves won’t begin to compensate for loss of the professional allowances.

Without a doubt, the problem is complex and the objective should be to find a means of curbing costs without placing anyone’s health at risk and without depriving residents of small towns from access to the drugs they need when they need them, particularly in an era when the local hospital has lost its emergency room.