Are we ready to open the Pandora’s box of pharmacare?

TheGlobeandMail.com – Globe Debate
Apr. 07 2015.   André Picard

Canada’s universal health system is far from universal.

The public health-insurance program known commonly as medicare offers first-dollar coverage of “medically necessary” physician services and hospital care.

For the rest – prescription drugs, psychological care, rehabilitation, home care, dental care etc. – it’s a crapshoot, meaning that your public health-insurance coverage will depend on factors such as your income, age, employment status, province of residence, medical condition and so on.

The most glaring omission is drugs. That many prescription drugs are medically necessary is inarguable. Yet, technically, drugs are covered by medicare only when a patient is in hospital. (Though a number of programs have been created over the years to ensure access for seniors, low-income citizens and patients with particular conditions.)

There are dozens of public drug plans but nothing remotely approaching universal pharmacare. There are still a few hundred thousand Canadians with no drug coverage and millions more with inadequate drug coverage. (The numbers are a bit vague because terms of coverage are constantly shifting.)

In recent months, in the lead-up to the federal election campaign, there has been a flurry of attention about the economic benefits of pharmacare.

Studies published in the Canadian Medical Association Journal, by the C.D. Howe Institute, the Institute for Research On Public Policy and the Canadian Federation of Nurses Unions have all come to essentially the same conclusion: Canada could save a whole whack of money if it replaced its current patchwork of private and public plans with a single national pharmacare plan. Those estimated savings range from $4.2-billion to $11.4-billion on the annual prescription-drug bill, which currently sits at $29.3-billion.

Given those eye-popping figures, it seems inconceivable that Ottawa and the provinces have not acted. But you can’t trim billions off the national drug bill with the snap of a finger. Many measures are required, and each has consequences.

In the mathematical models, the savings would come principally from two policy changes: Bulk buying of drugs and aggressive use of generic drugs over brand names. There is no question that current practices are inefficient (the federal government alone has five insurance plans that purchase drugs separately) but provinces are moving, painfully slowly, to make joint purchases to bring costs down.

The main reason we tolerate higher drug costs is to maintain the presence of drug companies, both brand name and generic, in Canada. If prices are slashed, jobs will be lost and availability of drugs will be limited in some instances. The impact is debatable, but it cannot be discounted entirely.

But the far more important question is about who will pay for drugs if a national pharmacare plan is created. Currently, about 42 per cent of drug costs are paid by public drug plans (including Workers’ Compensation), 36 per cent are paid by private drug plans, and 22 per cent are paid out-of-pocket. Most Canadians rely on private drug insurance but the most costly patients are on public plans.

Under the publicly funded pharmacare model being touted most loudly, there would be a massive shift of costs – from employers and employees who are paying private insurance, to the public treasury. Insurers would not take this lying down. Nor would employers and employees necessarily be enthusiastic, because they will likely see less generous coverage.

The other approach is to make drug insurance mandatory, as Quebec has done, so that it is provided by employers, purchased privately or from a low-cost public plan. The problem with Quebec’s approach, however, is that while it ensures universal drug coverage, it does not ensure equitable drug coverage.

In fact, since Quebec adopted pharmacare in 1996, costs have soared because demand has soared, to the point where the provincial health ombudsman has warned that it is unsustainable. The Quebec experience is a sobering reminder that programs hailed as money-savers rarely turn out to be so.

That is what Ottawa and the provinces fear more than anything, and no mathematical model can quell that fear.

The starting point of the discussion has to be: How do we create a health system that is more fair, equitable and affordable? Do we dare reconsider not only how we fund drugs, but physician and hospital services?

Are Canadians ready to open that Pandora’s box? Or will we continue, as we have done for half a century, to content ourselves with the status quo – a medicare system that is expensive and comfortably mediocre?

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