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Ontario cuts drug costs in bid to pass budget

TORONTO (Reuters) – Ontario’s minority Liberals offered more money for childcare and people with disabilities on Friday in a tweak to its budget designed to win the support of the left-wing New Democratic Party, which the government needs to stay in power.

Ontario Premier Dalton McGuinty said the government will further cut the price it pays for the most popular generic drugs – for people covered under public drug benefit programs – in order to fund some of the changes.

In 2010, Ontario slashed the cost of generic prescription drugs from 50% of the price of the brand names to 25%, pummeling shares of Canadian pharmacist Shoppers Drug Mart Corp, the dominant drug retailer in the province.

Ontario now says it will move immediately to lower the cost it pays on the top 10 generic drugs to 20% of the brand name prices.

The Liberals require the backing of either opposition party – the NDP or the right-leaning Conservatives – to pass the budget and dodge a second election in only six months.

All three parties, including the Conservatives – who have already said they won’t support the budget – will vote on the government’s spending plan on Tuesday.

“Today I spoke with (NDP leader Andrea Horwath) about these discussions and indicated a willingness to work together to reach an agreement,” McGuinty said a statement issued late Friday.

“Over the weekend, we’ll continue to analyze how else we may be able to work together to make the budget stronger.”

The NDP is largely expected to cooperate with the Liberals. The party has outlined a series of proposals to the make the budget fairer, including a tax hike for the richest earners in the province, capping pay for public sector executives and creating a tax credit for companies that create jobs.

NDP House Leader Gilles Bisson responded to McGuinty’s statement with his own: “Since the election we’ve made it clear we want minority government to work. We’ll look closely at the proposals put forward by the Premier today.”