Canadian Blood Services as a model for national pharmacare

Posted on April 14, 2015 in Health Policy Context – Full Comment
April 13, 2015.   Graham Sher

Imagine having to choose between putting food on the table or buying necessary medication. Research suggests this is the case for one in 10 Canadians who can’t afford to fill their prescriptions. Canada is the only country with universal health care that does not also have universal drug coverage. Even for those who do have private or public drug coverage, there are discrepancies in what and who is covered from province to province. Canadians also pay more for drugs than citizens in almost any other Western nation.

These are just a few of the arguments that have reignited calls for a national pharmacare program. It is not a new concept, but one that is gaining traction as leaders are turning over every stone to “bend the cost curve” in health care downward. In a recently published study in the Canadian Medical Association Journal (CMAJ), health economists and researchers concluded a universal drug program could actually save Canadians billions of dollars. Great savings are achieved by pooling provincial and territorial needs and resources to increase buying power, eliminate duplication and establish a platform for collaboration and cost-sharing.

If health-care leaders are looking for proof that provinces and territories can do more together than they can on their own when it comes to the provision of life-saving and enhancing drug therapies, they need look no further than the blood system they created close to 20 years ago.

Many are aware that since its creation in 1998, Canadian Blood Services has been in the business of collecting, processing and distributing blood components in all provinces and territories outside Quebec. But few realize we have also been running a national formulary of biological drugs, providing universal and equitable access to plasma-derived medicine at no cost to patients for nearly two decades

Our organization has sole responsibility for managing a national portfolio of plasma-derived products and their synthetic alternatives worth about $500 million a year. These life-saving pharmaceuticals are used to treat people with hemophilia and other bleeding disorders, patients with inherited and acquired immune disorders, burn and trauma victims, and many others. A national, scalable, cost-shared infrastructure and logistics network ensures the right product get to the right patient, at the right time.

Our approach to managing this drug portfolio is based on best practices in public tendering. This means we provide a competitive, transparent mechanism to achieve best pricing. In fact, governments are benefiting from Canadian Blood Services’ success in negotiating an estimated $600 million in savings over five years through 2018 — a testament to the value of pan-Canadian buying power and proof of concept of one of the arguments in the CMAJ study.

Some detractors of tendering suggest it can put supply at risk by placing all the purchaser’s eggs in that one proverbial basket. However, in our process, we avoid single-sourcing whenever possible, not only to encourage competitive pricing, but to ensure security of supply. Carrying multiple brands of a product, purchasing them in smaller, diverse lots, and negotiating a dedicated and guaranteed “safety stock” are all measures we take to mitigate risks to supply disruption.

We have also focused on product choice by incorporating stakeholder (physician and patient) input where appropriate in our tendering processes. Through our medical directors, we provide expert advice when a physician has a patient-based issue that could benefit from an additional specialist perspective — added value for patients and health systems. We also independently qualify new suppliers and audit them periodically, adding another layer of vigilance and product safety for patients. We are often aware early on of supplier issues in bringing products to market or maintaining adequate Canadian supplies, which helps to mitigate the risk of shortages.

Because of our governance structure, once a plasma-derived drug is accepted in our portfolio, it becomes available in all jurisdictions. This practice effectively reduces geographic or financial barriers to care, and is consistent with the principles of universal access informing the Canada Health Act and medicare. Equitable access also encourages consistency of practice, and fosters pan-Canadian dialogue on best practices for optimal product utilization. Canadian Blood Services collaborates with health-system leaders, including governments, transfusion medicine physicians and others, to help ensure appropriate utilization and to further control costs.

By offering our experience, we are not proposing Canadian Blood Services should bulk-purchase other drugs or that our model is a “cookie cutter” solution to apply to national pharmacare, in part or in whole. Rather, we are suggesting there are important lessons from our 17 years’ experience that can be leveraged, and that a national drug program is not only possible — it is already being done, with significant benefits to patients and health system funders.

A system that ensures no Canadian patient is left unable to afford life-saving medication, while at the same time driving down system costs, is not only good politics, it’s good policy.

Dr. Graham Sher is CEO of Canadian Blood Services.

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