Social Policy in Ontario

Canada needs a national pharmacare plan

Posted on November 29, 2014 in Health Policy Context

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TheStar.com – Opinion/Editorials – Canada needs a national pharmacare plan that would assume the bulk of prescription drug costs the way medicare covers doctors’ fees and hospital bills.
Nov 28 2014.   Editorial

Consider it medicare’s unfinished chapter — a never-delivered reform originally conceived as part of Canada’s publicly funded health-care system. Hospital procedures are included and so is the work of doctors, but the architects of medicare fell short in covering the cost of medicines.

People across the country pay for that failure every day through unnecessarily high prescription drug costs. They shell out an average 50 per cent more per capita than residents of other developed countries. It’s a burden that results in millions of prescriptions going unfilled, with an estimated one in 10 Canadians lacking money to buy medicine they need. They pay for medicare’s unmet promise through aggravated illness and needless suffering.

What’s missing is a national pharmacare plan that would assume the bulk of prescription drug costs for all Canadians, just as medicare covers doctors’ fees and hospital bills. Such a plan was envisioned as Justice Emmett Hall released the final volume of his Royal Commission on Health Services on Dec. 7, 1964. Concepts laid out by the Hall Commission shaped medicare as we know it today. But now, almost 50 years later, pharmacare remains little more than a pipe dream.

That’s not the case in other countries. Indeed, Canada is alone in having a universal health-care system while at the same time neglecting to cover the cost of prescription drugs.

The result of this inaction is an inefficient and expensive mishmash of private drug plans and disjointed federal, provincial and territorial systems, all providing different levels of coverage.

Universal access is a hallmark of medicare. But researchers Steven Morgan and Jamie Daw, writing in the journal Health Policy, note that provincial pharmacare programs are designed instead as a subsidy to people considered to be in need, such as welfare recipients and the elderly.

About 60 per cent of other Canadians are enrolled in private drug plans, largely through the workplace. But that coverage is expected to drop as the cost of these programs rises and an increasing portion of the labour force is engaged in “precarious employment,” without full benefits.
Properly used prescription medications can keep people healthy, help patients cope with difficult symptoms, avoid trips to the hospital and even save lives. They’re fundamental to modern health care.

Yet today in Canada, coverage for prescription drugs very much depends on where a person lives, their age, the place where they happen to work, their medical condition and whether or not they’re on welfare. Many have no protection at all, especially the young, the self-employed and people working for small businesses. They’re left exposed to high prices for the medicines they need.

That’s not how Canadian health care is meant to work. The logical way to provide equitable access is to cover prescription drugs through a publicly funded system. And there’s strong evidence it would be cost-effective, too.

Universal pharmacare would save up to $11.4 billion each year, according to an August report commissioned by the Canadian Federation of Nurses Unions.

The Canadian Centre for Policy Alternatives has pegged savings at $10.7 billion. And the C.D. Howe Institute has estimated that a single-payer system would save $1 billion a year simply by eliminating the duplication of legal, technical and administrative costs associated with Canada’s tangle of public and private drug plans.

National pharmacare’s largest financial impact would come through bulk buying. By concentrating the purchasing power of the entire country — public and private plans together — Canadian authorities would have a much stronger bargaining position when ordering drugs from pharmaceutical giants.

Steps have been taken in this direction. Provinces set up a bulk buying effort called the Pan-Canadian Pharmaceutical Alliance in 2010 and it has produced some savings. Expanding this approach to encompass all the country’s drug needs would generate even more. That’s how other nations obtain significantly lower costs.

Yes, a national pharmacare system would require some government investment. But experts note this would be more than offset by savings to Canadians at large. According to the C.D. Howe Institute’s 2013 study, titled Rethinking Pharmacare in Canada, if per capita spending on prescription medicine could be reduced to that of Germany (the country with the next-highest level among comparators) Canadians would spend $4 billion less per year.

And if per capita costs were brought in line with those of the United Kingdom or New Zealand, Canadians would save at least $14 billion annually.

There are other benefits, too. Marc-André Gagnon, assistant professor with the school of public policy at Carleton University, notes that employers would enjoy lower labour costs with the burden of a drug plan lifted from their benefits package. “It would have the same effect as a significant tax cut.”

What’s lacking is political will, especially at the national level, to make pharmacare happen. Complexities loom. Vested interests are heavily committed to Canada’s dysfunctional system. Drug companies, in particular, can be counted upon to resist reform.

But transformative change is never easy. The framers of this country’s medicare system faced greater challenges, and stiffer resistance, but managed to push forward to the benefit of all Canadians. Bold leadership is needed to complete their work.

A national pharmacare program would surely save money. But, more important than that, it would give Canadians comprehensive, universal access to the medicines they need. That’s medicare’s promise — and it still waits to be fulfilled.

< http://www.thestar.com/opinion/editorials/2014/11/28/canada_needs_a_national_pharmacare_plan_editorial.html >

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