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A National Pharmacare Policy

Posted on August 24, 2013

For purposes of this paper Pharmacare is defined as a national publicly funded plan that would provide pharmaceutical care to Canadians. It would provide drug coverage for all Canadians and would finally include those who are not insured or are under insured for their prescription drug needs. At present, benefits under Provincial drug plans vary considerably. A universal Pharmacare plan would eliminate this patchwork of coverage.

While it is true that costs associated with present drug benefit plans and prescription costs paid by individuals are high and increasing each year, there is evidence that improvements can be made. For example, a study released in 2010 by the Canadian Centre for Policy Alternatives found that a universal Pharmacare plan could generate savings of between 10 and 42 percent or up to 10.7 billion dollars a year of total drug expenditures in Canada depending on the choice of drug cost policies (1)

 

Some History

Pharmacare is a concept that has been visualized and reported on for decades, beginning as early as the Hall Royal Commission on Health Services in 1964. In 1994 the Canadian National Health Forum recommended “that in order to promote universal access and to control escalating costs, Canada should take steps to include drugs as part of the publicly funded health care system.”Pharmacare was included in the 1997 Liberal election platform and more recently referred to in the Romanow Commission Report (2002). In 2004 Provincial Premiers (except Quebec) agreed with the concept. The plan died with the election of a minority Conservative Government in 2006. Now in the majority, the Conservatives continue to promote a policy of keeping out of what they consider to be a purely provincial prerogative.

 

Growing Support

Pressure is growing from consumer groups, health care advocates, academics and the general public for a national drug plan. An EKOS poll (2) taken in June 2013 shows that 78% of Canadians support the implementation of a universal Pharmacare program. Public discussions and conferences (3) continue to take place and Pharmacare is the subject of increasing attention by both traditional (4) and social media.

 

Provincial Drug Plans

Currently each Province has its own formulary and negotiates individually with manufacturers to establish prices for reimbursement to providers of its various drug programs.

Provincial drug plans depend to a large extent on the use of generic (off patent) drugs. If one compares the price of generics in Canada with that of other countries such as France, Germany, Sweden and Britain where prices range from approximately 50% to 70% lower (5), it becomes obvious that we are missing an opportunity for significant savings for Canadian drug plans.

Another compelling argument for instituting a plan to save on formulary drug costs is that the Canadian senior population, currently the major group receiving government drug benefits, will continue to grow just as the workforce generating tax revenue is shrinking.

 

A National Formulary

A National Formulary is an essential component for a Canada wide Pharmacare program. Formularies list interchangeable products and prices. A National Formulary developed by the Federal Government for all Provinces and Territories will ensure uniform drug interchangeability and be the basis for negotiating the best possible price as negotiators would act for the whole country instead of each Province negotiating separately.

 

Challenges

While a plan that would provide prescription medication to all Canadians has been a dream for decades, it has not been realized largely due to two factors, jurisdictional concerns and cost. These two factors seem to have sapped political will to proceed with what has generally been considered an essential part of our universal health care system.

 

Jurisdictional Issues

While health is considered to be a provincial matter, a case can be made for a Federal initiative in this field based on the fact that Ottawa has legislative authority over drug patents (Patent Act), safety and other drug related matters as well as deciding which drugs are assigned prescription status (Food and Drugs Act and the Controlled Drugs and Substances Act).

 

Paying for Pharmacare

Various funding proposals have been suggested ranging from co-payment(user fees) to a social contract based on policies and procedures similar to the Canada Pension Plan that will permit Canadians to buy insurance against future drug costs. Prudent prescribing and a National Formulary that includes a rigorous drug assessment process and which results in significant savings through negotiations and economies of scale will be essential components.

 

Implementation

Phasing in a universal National Pharmacare Plan by starting with those already covered under Provincial and Territorial plans would probably be the most acceptable route to follow, particularly if it is shown that significant savings over what is now being spent in these jurisdictions can be achieved. Cooperation among the Provincial, Territorial and Federal Governments is absolutely essential for success.

This initiative is true to Liberal social values and is a natural and essential follow-up to the Liberal Party’s involvement in the creation of Medicare and to its on-going support for universal health care.

 

References:

(1)  News Release- Canadian Centre for Policy Alternatives September 13 2010.

(2)  National Post June 10 2013

(3)  Conference- “Rethinking Drug Coverage: Time for Universal Pharmacare” Ottawa May 24-25 2013

(4)  Montreal Gazette May 23 2011

(5)  Patent Medicines Prices Review Board Study “Generic Drugs in Canada: International Price Comparisons and Potential Cost Savings” 2008.

 

By: Bill Wensley, Northumberland-Quinte West Federal Liberal Association