Social Policy in Ontario

Pharmacare reform has been championed for decades, but gained enormous momentum only last year, when Ottawa created the Advisory Council on the Implementation of National Pharmacare.

The Advisory Council delivered his final report last week. And the Trudeau government has adopted most the Hoskin report’s 60 recommendations

The report proposes replacing the more than 100,000 employer-sponsored drug plans run by private insurers with a single-payer national system administered by the provinces.

Advocates of pharmacare reform see a need to correct for Canada’s unusual status in having universal health care but not its pharmacare counterpart.

Yet, while most other industrialized countries do have universal pharmacare, many of those systems have some of the same irksome “patchwork” deficiencies that make our own pharmacare less than ideal.

That means Canada has a chance to devise one of the world’s best pharmacare regimes, no longer balkanized among employer-sponsored drug plans, government plans and plans purchased by individuals.

If the glowing promises for pharmacare reform are to be believed – and there’s good reason for doing so, given the countless studies over several decades attesting to its soundness as public policy – it would be a powerful tool for getting heathcare costs under control, while putting Canada in the front ranks in making needed medications available to all.

But a productive pharmacare debate this fall will first require separating facts from myths.

Critics of universal pharmacare often denounce it with the alarmist term “radical.”

But Canada already has an elaborate pharmacare system, which has been covering tens of millions of Canadians for decades. At issue today is “pharmacare reform,” not pharmacare itself.

Today’s Canadian pharmacare is a fragmented system that targets certain groups for government or employer-plan coverage, while leaving other Canadians to pay out of pocket.

The Hoskins report says “one in five Canadians struggle to pay for prescription medicines.” Costly hospital treatment is required for patients who do without prescriptions they cannot afford, leading to serious medical conditions.

• Pharmacare reform is not “radical”

It strains credulity to describe as radical a program of universal pharmacare already long in place in most industrialized countries – in Britain since 1947, and in Australia since 1950, for instance.

Radical is also a misnomer for pharmacare programs that are phased in over several years. Universal pharmacare in Australia began almost 70 years ago, with coverage of basic essential drugs, expanding a few years later to include the costliest, specialized medications.

That is the gradualist approach called for by the Hoskins report, which would cover basic drugs by 2022, and expand to comprehensive coverage of nearly all drugs by 2027.

• We can afford pharmacare reform

It might be more accurate to say we can’t afford to go without it.

Canada spends more money on prescription drugs — $34 billion a year – than on doctors. On a per capita basis, Canada spends more money on drugs than all but the U.S. and Switzerland among the 36 member countries of the Organization for Economic Cooperation and Development (OECD).

The Hoskins report estimates an annual savings of about $5 billion in total drug spending once universal pharmacare is fully implemented. That roughly jibes with last year’s estimate of reduced drug costs by the Parliamentary Budget Officer.

The Hoskins report estimates savings on prescription drugs for the average Canadian of $350 per year.

Lower prices would come even sooner if Ottawa simply acted on pending legislation to reform the Patented Medicine Prices Review Board (PMPRB).

Under that reform, the board would be more selective than current practice in covering only drugs that are truly effective. That would cut the price of many drugs by about 20 per cent, with bigger cuts for the most expensive drugs used to treat rare conditions.

Healthcare professionals are frustrated that Ottawa has dragged its heels on PMPRB reform, due to relentless lobbying against it by Big Pharma, the world’s dozen or so largest drug companies. Those same experts believe the price review board reform could be hastened and made more effective by integrating it into a universal pharmacare system.

As my colleague Heather Scoffield points out, the Trudeau government has already met with success in cutting drug costs by partnering with the provinces in bulk-buying practices.

Pharmacare reform would more thoroughly integrate those practices, by which the combined buying power of the several governments helps in negotiating lower prices for government-funded medications.

Pharmacare reform would additionally cover non-government-funded drugs.

And it would strengthen employers’ ability to hire and properly compensate employees. Employer contributions to drug plans generally reduce worker pay. “We were told by employers that private drug benefits for their workers are becoming less affordable to them,” the Hoskins report says.

• Universal pharmacare will not limit drug choice

The trade group for private-sector insurers, the Canadian Life and Health Insurance Association, has made the scary claim that approximately 7.7 million Canadians might be at risk of losing access to certain drugs under pharmacare reform.

And Innovation Medicines Canada, the Canadian branch of Big Pharma’s global lobby, argues that the continued existence of private insurers can ensure that “patients’ standard of care is not disrupted” for drugs not on a national government formulary of eligible medications.

Ottawa believes the opposite, that drugs would become more accessible if lower priced. And patients in jurisdictions abroad with universal pharmacare have not seen a reduction in drug accessibility.

And patients could continue to demand from their doctors medications not covered by a new national formulary. Employer plans and private insurers could continue to cover those drugs.

What worries Big Pharma is that with only about one in 10 new drugs launched each year representing genuine therapeutic improvements — the finding of dozens of studies over the years — it stands to lose a great deal of revenue. The industry could see its sales in Canada reduced by about $9 billion with PMPRB reform alone.

A national formulary would be devoid of medications with minimal efficacy, or merely tweaked to justify a higher price and extend patent protection. Tweaking commonly consists of making an existing drug time-released, with no change to the active ingredients of the drug.

• If you want pharmacare, vote for it

The many premiers antagonistic toward the Trudeau government can be expected to balk at implementing pharmacare reform. Quebec has already opted out of the Hoskins plan.

But history is likely to repeat itself. In the 1960s, Medicare was resisted by certain provinces, but eventually they all adopted it.

With a recent poll showing 88 per cent of Canadians favouring single-payer universal pharmacare, people power could determine the outcome once again, strengthening a healthcare system Canadians say is their most cherished national asset.

David Olive is a Toronto-based business columnist for the Star.

https://www.thestar.com/business/opinion/2019/06/21/why-universal-pharmacare-will-help-get-canadas-drug-costs-under-control-and-why-big-pharma-hates-it.html