The follies of a national drug plan

Posted on July 3, 2015 in Health Policy Context – Full Comment
July 3, 2015.   Alan Cassels

Amalgamation always seems like a good idea. Greater Victoria has 13 municipalities, 13 councils, oodles of separate fire and police departments and multiple separate teams of garbage-persons, road fixers, parks maintainers and others who are needed to keep our cities humming. Which makes everyone ask: wouldn’t it be easier (and cheaper) if we just had one of each?

I don’t know much about municipalities amalgamating, but joining forces, preventing duplication and saving money has been suggested with something I do know about — pharmacare programs. Canada has at least 16 separate public drug plans — each of the provinces, plus ones for the RCMP, veterans, aboriginals and others, as well as hundreds of private drug plans.

Wouldn’t it also be easier — and cheaper — if we just had one national drug plan?

Earlier this summer, at least eight provinces got together to discuss a national drug plan. Cost efficiencies, a better ability to negotiate drug prices and other economies of scale make it a compelling idea. I agree. Yet, I also agree that if done poorly, a national drug plan could be an utter disaster, characterized by waste, political coverage decisions and even more irrational and unsafe pharmaceutical use than we’ve got now.

Bigger does not always equal better; sometimes bigger means dumber.

Let’s take a major new drug to see how we might fare with a national drug plan. The diabetes drug Januvia (generic name: sitagliptin) globally earns about $6 billion per year for its manufacturer, Merck. It costs about $3.50 per pill in B.C. and lowers blood sugar on par with older, cheaper diabetes drugs.

Proponents of a national drug plan would assert that with the buying power of one big agency, we’d be able to negotiate much better prices for Januvia. Instead of paying $3.50 per pill, maybe we could get it for $2 a pill, which is about what Australia pays, seeing as they have national buying power. Sound good?

It would be good only if Januvia had advantages over older, cheaper diabetes drugs. Sadly, independent experts say that drugs like Januvia are less effective than older diabetes medications. So are they more dangerous? A trial published in early June tested the drug in 14,000 people over three years and found it wasn’t any more harmful than receiving “usual care” plus a placebo. This “non-inferiority” trial suggested that over three years, Januvia won’t increase your risk of heart failure, heart attacks, death or cancer compared to a placebo. Hmm. Hardly a slam dunk.

Taxpayers in Ontario and in Quebec pay tens of millions of dollars every year for this drug. And it’s a good chance if you get drug benefits through your employer, then you’re paying for Januvia as well.

For my tastes, the first priority of a national drug plan wouldn’t be price, but evidence.

If the best available evidence suggests that a new, more expensive drug like Januvia is in the “not better or worse than comparator drugs” category, you’d need to have strict rules to make sure the drug was only covered for the subset of people who can’t tolerate other diabetes drugs. You could then use the money you saved to expand coverage for drugs that are cost-effective, so that more Canadians can be covered for high drug costs. These are the types of hard decisions you have to make when you’re facing the political power of one of the world’s biggest drug companies.

Federal health-related organizations have not shown that they are able to make these hard choices

The B.C. government recently made a hard decision when it decided that B.C. Pharmacare won’t pay for Januvia. Why? Maybe given little evidence the drug could extend the quality or the length of a diabetic’s life and the fact that Merck refused to lower the price to bring it on par with the other DPP-4 inhibitors, the government made the decision not to kowtow to the lobbying pressure. That’s the kind of spine that would be essential in a national drug plan.

Yet federal health-related organizations — such as Health Canada, the Canadian Institutes of Health Research and the Canadian Agency for Drugs and Technologies in Health — have not shown that they are able to make these hard choices. We have a watchdog that doesn’t bite, a national health research funder that encourages Canadian researchers to “partner” with drug companies and a technology evaluator that takes money from drug companies in the form of “fees,” thus making them beholden to the very industry they are supposed to assess.

Any national pharmacare program would need an absolute firewall to protect it from the inevitable politics of drug coverage, otherwise you’d be left with even more irrational and expensive drug coverage decisions.

Amalgamation in Victoria and a national pharmacare program both sound great in theory. But in practice? Hmm, I am usually optimistic about doing things collaboratively and looking for efficiencies, but I’d hate to see Victoria lose its character, or Canada to accidentally create a national form of institutionalized drug coverage that can’t make hard, politics-free and evidence-based decisions.

Alan Cassels is a pharmaceutical policy researcher, author and expert adviser with He lives in Victoria, B.C.

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