Canada can learn from U.S. attack on high drug prices

TheStar.com – Opinion/Commentary –  Canadian policy-makers should be just as motivated to tackle soaring drug prices.  After the U.S., we pay the second highest brand-name drug prices in the world.
April 27, 2017.   By ANDREW S. BOOZARY

While President Trump’s vaunting attempts to dismantle Obamacare have been difficult to watch, Canadians could learn from one health policy discussion happening south of the border: the compelling need to lower prescription drug prices.

This was one of the only issues that both presidential candidates agreed upon in the 2016 campaign. And unlike other positions taken by President Trump, he actually described a plausible solution to bring drug prices “way, way down” — leveraging the purchasing power of Medicare, the public health insurance program that covers all U.S. seniors, to negotiate with pharmaceutical companies.

Pharmaceutical stocks took notice and plummeted earlier this year when Trump promised that the U.S. is “going to start bidding. We’re going to save billions of dollars.”

Canadian policy-makers should be just as motivated to tackle soaring drug prices. After the U.S., we pay the second highest brand-name drug prices in the world. For generic drugs, we are the world’s highest payer.

Why do the U.S. and Canada pay so much? Unlike all other industrialized countries, both countries have failed to establish a national public drug plan that would allow governments to negotiate drug prices on behalf of their entire population.

Instead, the U.S. and Canada have a fragmented patch work of public and private drug plans. Where you work, where you live, or your age, ultimately dictate whether you are eligible for drug coverage and determine the generosity of your benefits.

While this raises concerns around fairness, our multiple payer systems also leave each individual payer — be it a province, employer, or private insurer — with far less negotiating power with pharmaceutical companies than would exist under a single payer system. A fractured payer means higher prices.

And in Canada, the lack of a national drug plan leaves at least $4 billion in savings on the table every year, according to the latest research in the Canadian Medical Association Journal.

This isn’t a trivial amount, either. These savings could pay for nearly half the costs of a national $10-a-day child-care program or allow for meaningful public investments in schools, infrastructure, housing, and unemployment supports.

It might sound paradoxical, but the dollars we save on drugs could be spent on keeping our population healthier.

While the recent Health Accord negotiations revealed Ottawa is not yet interested in working with the provinces to expand public drug coverage and lower drug prices, this doesn’t mean provincial leaders should sit on their hands.

This is where the U.S. experience offers another important lesson. In federalist countries, states can, and should, push forward on policy priorities when national leadership is wanting. This was the state experience with Obamacare, where gains in coverage and innovation continue to take place on the state-level. And when recent threats to health care access and immigration policies came from Washington, many state governments refused to buck to President Trump’s will.

Provinces should draw inspiration from this sort of state leadership. But then again, this has always been the Canadian way. It was Saskatchewan that started the march toward Medicare in the 1960s. And as drug costs continued to climb in the 2000s, it was the provinces that came together to form the pan-Canadian Pharmaceutical Alliance (pCPA) and bulk buy for select drugs. With annual savings at close to $500 million, even Ottawa decided to join in on the savings just last year.

If we fail to act, in Trump’s words, the pharmaceutical industry will continue to “get away with murder.” Canadians will continue to pay 50 per cent more on prescription drugs per capita than other industrialized nations, a strain on government budgets, employers, and families. And while we pride ourselves on our universal health care system, many Canadians still have to choose between paying their rent and renewing their prescription.

New studies also suggest there is a very real human price when patients have to make this trade-off. Even a small co-pay can dissuade patients from taking their medication and increase their risks for a subsequent major vascular episode such as a heart attack or stroke. And in a recent review from the Annals of Medicine, this issue of patients not taking their medicines is believed to cause over 125, 000 deaths in the United States each year.

As our southern neighbour takes on the challenge of high drug costs, we ought to ask ourselves: How long are we willing to pay the price of being the only country with universal health coverage that leaves prescription drugs out of the equation?

Jamie Daw is a Frank Knox Memorial Fellow and doctoral candidate in Health Policy at Harvard University (@jamie_daw). Andrew S. Boozary is a resident physician in Toronto and visiting scientist at the Harvard School of Public Health (@drandrewb).

https://www.thestar.com/opinion/commentary/2017/04/27/canada-can-learn-from-us-attack-on-high-drug-prices.html

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