A parliamentary committee has delivered its report on pharmacare, and it’s recommending an expansion of the Canada Health Act to include prescription drugs dispensed outside of hospital settings.
“Such an approach would … ensure that all Canadians have equitable and affordable access to life-saving prescription drugs. In short, it will save money and lives,” said the report.
The all-party committee of members of Parliament looked at two possible options for pharmacare. The first was a universal single-payer public prescription drug plan — which it settled on as its recommendation.
The second option was to look at reforming the system to plug the gaps between public and private plans to ensure wider coverage.
“The committee has concluded that merely addressing coverage gaps will not lead to better health outcomes or better cost control,” the report said.
“High-risk, high-cost patients, the elderly, the poor, and those bordering the cut-off to those distinctions are pushed out of private plans and onto public plans wherever they exist.”
Speaking to reporters after the report was released, Liberal MP Bill Casey, chair of the committee, said Canada currently has 80 different drug plans at various levels of government that cover seniors, youth, veterans and those on social assistance.
Casey also said the patchwork of rules determining how drugs are bought across the country has led to the same drugs being bought for different prices at different times.
Health committee MPs discuss their new report on a national universal drug plan.9:25
“We have an erratic system of buying pharmaceuticals,” Casey said. “We have large number of corporations, large numbers of companies as well, buying pharmaceuticals. Everybody pays a different price.
“As a result, we pay more for pharmaceuticals than 26 other countries in the OECD.”
The report said Canada’s per capita drug spending is ranked third among the 29 OECD countries, with only the U.S. and Switzerland spending more.
Casey said the system is inefficient and, by changing over to a national pharmacare plan, costs would be reduced and health care outcomes improved.
$ 7.3B cost to the federal government: PBO
Over the past two years, members of the House of Commons Committee on Health heard testimony from 99 witnesses.
The report the committee delivered said implementing such a plan would cut $ 4.2 billion from the current total cost of prescription drugs in Canada.
That number is based on a report by the Parliamentary Budget Office, commissioned by the committee, which said that roughly $ 28.5 billion was spent on prescription drugs in 2015; $ 13.1 billion of that sum is covered by private insurance plans, $ 10.7 billion by provincial insurance plans and $ 4.7 billion by individuals.
Of that amount, the PBO says roughly $ 24.6 billion would be eligible for a national pharmacare program, a number that would be reduced to $ 20.4 billion annually once pricing and consumption changes are worked into the equations.
With provinces picking up $ 13.1 billion of that cost, the bottom line for the federal government would be an additional $ 7.3 billion.
Sharing the cost
The committee said that Canadians who pay for their drug plans through workplace health insurance would pay for their medications through their taxes instead. The cost to employers would drop, which would allow them to look at covering dental and optical services, or hiring more staff.
Regardless, the increased cost, the committee said, would be shared.
“Given our federated state, the committee believes that the program should be cost-shared between federal, provincial and territorial governments.”
Casey himself said the report, while comprehensive, did not provide all the answers on how such a plan would work.
The Conservative MPs on the committee expressed concern about the remaining unanswered questions. They included as an appendix to the report a “dissenting opinion of the Conservative Party of Canada.”
That appendix notes that there are discrepancies between the figures used by the PBO and those used by others.
“The total amount spent for prescription drugs annually, according to the PBO’s report, was $ 24 billion,” the Conservatives’ own report said. “However, [the Canadian Institute for Health Information] has reported this number to be $ 39.8 billion. The discrepancies in these figures further highlight the need for further study.”
The Conservatives also wanted better answers on why some countries pay less per capita for drugs than Canada does. Denmark, for example pays $ 240 US per capita, the appendix said, while Canada pays three times that at $ 713 per capita annually.
The NDP fully backed the report, saying it’s time to implement pharmacare nationally.
“I think its very clear,” said MP Peter Julian. “Mr. Trudeau doesn’t have any more excuses not to act.”
A welcome first move
Health care workers supported the report’s conclusions, while the insurance industry raised concerns about cost.
“This announcement reinforces what we’ve heard at town hall meetings across the country: the current patchwork prescription drug system isn’t working,” said Canadian Labour Congress President Hassan Yussuff.
Linda Silas, president of the Canadian Federation of Nurses Unions, said the report backs up her organization’s position — “that a national, universal pharmacare plan will be good for patients, good for public health care and good for Canada’s economy.”
“It was especially heartening to see that the committee came to the same conclusion that many health policy experts have – that focusing solely on the gaps in coverage would not lead to better overall health outcomes or cost control,” said Dr. Monika Dutt, with Canadian Doctors for Medicare.
The insurance industry, however, warned that governments might find themselves overburdened by the financial commitment involved in a universal single-payer pharmacare program.
“It’s clear that there is alignment around the need for change. Any reform, however, needs to be done in a way that protects taxpayers and doesn’t put Canadians’ health plans at risk,” said Stephen Frank, CEO of the Canadian Life and Health Insurance Association.
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