Bill Morneau sends a mixed message on national pharmacare – Globe editorial
MARCH 2, 2018

The most interesting item in this year’s otherwise uninspiring federal budget was a clue about what might be in there next year.

The clue was a single page discreetly lodged about halfway through the document and headlined, “Advisory Council on the Implementation of National Pharmacare.” (This counts as pizzazz, by the standards of these things.)

It was essentially a promise to fill the most glaring gap in Canada’s social safety net by providing national drug insurance. Given its magnitude, the commitment got relatively little coverage when the budget was tabled on Tuesday, in part because, well, it’s an advisory council and not real spending, and in part because news leaked the day before that Ontario Health Minister Eric Hoskins was leaving provincial politics to lead the conclave.

But the name of the thing, and the man tapped to run it, suggested its seriousness.

Dr. Hoskins is a physician and a long-time proponent of an ambitious, national pharmacare program. The word “implementation” was also key: It said the council would take as a given that pharmacare was needed and instead look at the best way to bring it in.

So it was baffling when Finance Minister Bill Morneau played down the initiative the very next day.

In a talk at the Economic Club of Canada, Mr. Morneau told the audience that his government wanted a drug program “that deals with the gaps but doesn’t throw out the system that we currently have.”

Cautious and pragmatic as that sounds, it’s outside the near-consensus view among health experts that the best way of doing pharmacare is precisely to throw out the system we currently have – a position Dr. Hoskins has publicly backed.

The basic idea is that medically necessary drugs would be covered under the Canada Health Act and provided by provincial health plans for everybody, including those who now have private insurance. The federal government’s bulk-buying power would drive down prices for these new plans. People who felt the public coverage was inadequate could buy supplementary insurance on the private market, just like they can under medicare.

There are details to hammer out and best practices to finesse, but that’s what most people mean when they say pharmacare. Apart from the advantages of universal coverage, the Parliamentary Budget Officer estimated last year that such a system would save billions of dollars relative to our current patchwork of public and private plans.

So when Mr. Morneau says any Liberal pharmacare plan would preserve the current system, he seems to be tipping the scales and undermining the advisory council his own budget just established.

He reinforced that impression in his Economic Club talk when he predicted that the policy will require “some back and forth between the advisory council and…the ministry of finance.” Dr. Hoskins’ work hasn’t even begun, and already he’s being told to expect a fight.

Mr. Morneau also staked out the high moral ground by suggesting that his modest, gap-filling approach was the “fiscally responsible” route.

But that’s disingenuous. It’s easy to imagine how a proper pharmacare system could be made revenue-neutral. Since government would be taking the burden of drug insurance off corporate payrolls and funding similar coverage more efficiently, one widely considered option would be for the feds to charge firms a small pharma-tax that collected less money than the amount they saved.

What’s irresponsible is preserving the current system, or amending it in a way that keeps drug costs uncommonly high (Canada has one of the highest per-capita rates of pharmaceutical spending in the OECD).

Achieving universal coverage without government bulk-buying is likely to keep the cost curve straining upward. Quebec has mandatory private plans for workers and a backup public plan, but now has the highest average out-of-pocket drug expenses of any province, according to the PBO.

These are all things for Dr. Hoskins to weigh with his fellow councillors. Any reform this size is elaborate and painful work, with few clean answers. But on the face of it, a wholesale reworking of Canada’s drug regime seems like a credible possibility. The Finance Minister should let his new pharmacare czar go where the evidence leads.

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