Three steps to make pharmacare a reality for all

Posted on February 18, 2010 in Health Debates

Source: — Authors: – Opinion
Published On Thu Feb 18 2010.  Irfan Dhalla

When H1N1 influenza seemed poised to kill tens of thousands of Canadians, governments across Canada did a wonderful thing: they made the antiviral medication Tamiflu available free to anyone who needed it.

But why take an equitable approach to one prescription medication and continue the inequitable approach for all the rest?

The eligibility criteria in our current patchwork system make little sense.

In Ontario, for example, bank executives who are 65 or older have their medications paid for by government, while 64-year-old taxi drivers pay for everything on their own dime. With a considerable number of life-prolonging medications costing thousands or even tens of thousands of dollars per year, most people cannot afford to pay for these medications out of their own income or savings.

Most everyone agrees that leaving prescription medications out of medicare was a mistake. The thornier issue is how this mistake can be overcome.

Here are three things governments could do to take universal Pharmacare from dream to reality.

First, governments should focus relentlessly on effectiveness and cost when deciding what drugs to pay for and how much to pay for them.

Although there are reasonably robust national and provincial processes for assessing the effectiveness of new medications, governments rarely scrutinize older medications in the same manner. Some of these medications are only minimally effective and some are even harmful. For example, geriatricians have produced a list of drugs that are so harmful they should virtually never be prescribed to older adults. Yet not a single provincial drug plan has placed restrictions on most of these drugs.

Another area where there is obvious waste is in the pricing of generic medications. Why do we continue to pay flat rates of 50 per cent or more of the brand name price for generic medications when other governments, like Britain’s, pay as little as 10 per cent? Pharmacies and generic drug makers are, of course, happy to share the excess profit – at taxpayers’ expense.

Second, governments should do away with public subsidies for private health insurance.

Right now, most Canadians with steady jobs are provided with private health insurance by their employers. What many people don’t know is that government subsidizes these plans because the employer’s contribution is exempt from income tax. And because these subsidies are proportional to the highest income tax rate paid by an individual, those with the highest incomes benefit the most.

Many of these private plans (including my own) pay for non-essential services such as massage and naturopathy. At the same time, self-employed individuals with lower incomes have to pay the full cost of life-saving medications out of pocket.

These inefficient and unfair subsidies received considerable attention in the U.S. when Senator John McCain pledged to get rid of them in his presidential campaign. Outside Quebec, however, they have received little attention in Canada.

Are there Canadian politicians courageous enough to follow Quebec’s lead and vigorously campaign for the removal of the private health insurance subsidy?

A pharmacare program that covers everyone could be paid for in part by eliminating the private health insurance tax subsidy. But that won’t be enough.

The rest of the money should come from a courageous third step – an income-dependent insurance premium. Everyone who paid the premium would be treated the same way, just as with Tamiflu and H1N1. The new tax – let’s call it what it is – might be a hard sell, but polls have repeatedly indicated that a sizable share of the public, often a majority, is willing to pay more for better health care.

Deliberative bodies like Ontario’s newly formed Citizens’ Council could be asked to consider this issue. And physician organizations could be asked to champion the new insurance premium if it were felt to be in the public interest.

The egalitarian impulse we had when faced with H1N1 was reassuringly Canadian. We were furious to discover that hockey teams and private clinics were getting the flu vaccine first, but pleased to know that Tamiflu would be available to everyone who needed it.

With federal and provincial budgets soon to be released, now is the time for governments to act on that Canadian impulse and build universal pharmacare.

Dr. Irfan Dhalla is acting chair of Canadian Doctors for Medicare, a lecturer in at the University of Toronto and a staff physician at St. Michael’s Hospital in Toronto. He receives funding from the Canadian Institutes of Health Research to study pharmaceutical policy.

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