Social Policy in Ontario

National Pharmacare – Time to Get on With It

Posted on November 3, 2023 in Health Debates

Source: CDHowe.org — Authors: Marcel Saulnier

CDHowe.org – Public Policy Research
November 2, 2023. Marcel Saulnier

A presentation to “Pharmacare Back on The Radar: Canada’s Need for Federal-Provincial Cooperation,” a C.D. Howe Institute webinar held on October 26, 2023.

Download PDF – https://www.cdhowe.org/sites/default/files/2023-11/Verbatim_1102_2023_F.pdf

It’s not too late to get national pharmacare back on track. To do this, the federal government needs to lay out a credible approach and timeline to move forward and mobilize support from provinces and key stakeholders. Without strong federal leadership, the inertia built into the current system will simply overpower any attempt to change the status quo.

There are some inconvenient truths that need to be acknowledged. First, the nation’s balance sheet is in much worse shape than before the pandemic, significantly reducing the fiscal room available to fund national pharmacare. Second, there are limits to how prescriptive the federal government can be in an area of provincial jurisdiction. Under medicare, Ottawa sets broad national standards but does not get to meddle in the precise details of how provincial health insurance plans are set up and operated; pharmacare would be no different. And third, provinces are not clamouring for national pharmacare and will guard their autonomy. They have a lot invested in their current approach to drug coverage and will be reluctant to make significant changes unless it fits with their worldview and comes with an iron-clad commitment of federal funding.

Given this context, successful implementation of national pharmacare will require attention to the following four key elements:

1. New federal investments to scale up the PEI approach –New federal funding for national pharmacare is critical to making any progress. Similar to the PEI deal, the federal government should offer all provinces a set amount – say $100 per capita — targeted and tied to specific improvements in public-plan coverage, including expanded eligibility, increased alignment across formularies and reduced co-payments and deductibles. Targeted improvements could vary from province to province depending on the most pressing needs. These bilateral arrangements would have to fit within an overall framework laid out in legislation that works toward cross-jurisdictional alignment. The total cost would be about $4 billion annually – not a small amount of money – but meaningful enough to create momentum for change. This would be in addition to the commitment made in the 2019 budget to provide provinces and territories with $500 million annually for rare disease drugs.
2. Federal legislation should be aspirational and enabling –In the current intergovernmental environment, there is a risk that prescriptive federal legislation on national pharmacare could derail the project before it even starts. Provinces already underwrite 44 percent of national drug spending and will bristle at the notion of a one-size-fits all approach from Ottawa, which currently funds a very small proportion of drug costs. Now is not the time to throw down the gauntlet and tell provinces they need to commit to a single-payer approach. Instead, federal legislation should be aspirational, outlining the vision of national pharmacare and what it means for Canadians, recognizing that implementation will occur by phases over time. It will include working with interested jurisdictions, acknowledging the important role provinces already play in delivering public drug coverage, creating a framework that enables governments to work collaboratively together and with stakeholders to set national standards on coverage and out-of-pocket payment, as well as providing legislative guarantees around long-term federal financial commitments.
3. National minimum standards should be established –Federal legislation should make provision for national minimum standards that all drug plans, both public and private, would strive to achieve. Standards should be established collaboratively once a critical mass of jurisdictions have accepted the federal funding offer, and should set out clear minimum expectations around eligibility for coverage, breadth of formulary, and out-of-pocket payments. Plans could exceed these expectations, for example, by providing a more comprehensive formulary of drugs and/or lower out-of-pocket payment. These expectations would be raised over time (in tandem with additional federal funding) to work toward universal coverage, a broader formulary, and lower out-of-pocket payments. Jurisdictions would need to commit not to reduce their current level of coverage, enabling new federal investments to support a more comprehensive program in some jurisdictions while supporting others to get there.
4. Governance should be strengthened –Canada’s fragmented approach to pharmaceutical decision-making needs to be further strengthened. The creation of CADTH, the Common Drug Review and the pCPA have been positive steps that have served Canada well, but significant gaps remain. Private drug plans do not have access to pCPA negotiated prices for innovative drugs4and generally operate with little or no non-financial regulation.5 A good step forward would be for the pCPA to pilot joint public-private plan price negotiations for a specific segment of innovative drugs (e.g., for the treatment of a defined chronic disease condition). In parallel to this, the pCPA – which recently transitioned to an independent not-for-profit model – needs to improve transparency and accountability to Canadians around the drug reimbursement process and the timeliness of listing decisions. There is also more work needed to build better partnerships in Canada’s pharmaceutical management ecosystem. Recent misfires such as the failed implementation of reforms to the PMPRB drug pricing regulations underscore a climate of mistrust among regulators, payers, industry and patients. Whether through the proposed Canadian Drug Agency or expanding the mandate of established organizations, there needs to be a more inclusive table, focused on building the trust and collaboration needed to address the fragmented approach to pharmaceutical policy in Canada.

Conclusion

National pharmacare is overdue. In 21st century healthcare, drugs are not a luxury nor a discretionary add-on. They are an essential part of healthcare delivery that should be covered universally. Canadians have already waited too long, and far too many of them don’t get the medication they need to stay healthy and manage chronic disease.

The federal government can act as a catalyst by making a credible and responsible financial commitment that opens the door to joint work with provinces and territories to improve public plan coverage. The PEI agreement is a good model and federal legislation can help to create a positive foundation for collaboration.

The political window to move things forward is open, but not for long. The federal government, working collaboratively with provinces and territories, has an opportunity to make this happen in a focused and realistic manner. Let’s get on with it.

Marcel Saulnier is an Ottawa based health policy consultant and an Associate with Santis Health. He was previously Associate Assistant Deputy Minister of the Strategic Policy Branch at Health Canada. He has held other senior positions at Health Canada, including as Director General of Health Care Strategies, and Director General of Policy Coordination and Planning.

https://www.cdhowe.org/public-policy-research/verbatim-national-pharmacare-time-get-it

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