SECOND OPINION | Translating the budget's 'pharmacare' promise

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For health care advocates, it was a roller-coaster week. On Tuesday it looked like Canada was poised to finally get a national pharmacare program.

Health groups cheered when the federal budget established the Advisory Council on the Implementation of National pharmacare. After all, in the dictionary “implementation” means “the process of putting a decision or plan into effect.”

But on Wednesday the sound of balloons bursting could be heard across the country. Groups that had just finished praising the government sent out angry press releases.

“This is a cruel sleight of hand,” said James Hutt of the Canadian Health Coalition in a news release Wednesday, adding that Canadians had been “ecstatic by the Liberals announcement yesterday.”

What happened to the celebration?  Even as the champagne corks were popping, Finance Minister Bill Morneau was dialing back on the pharmacare promise. He said he wanted to fix a problem, not build a whole new system.

The problem is that there are a significant number of Canadians who don’t get pharmacare through their workforce,” Morneau told the CBC’s Rosemary Barton after Tuesday’s budget speech. “We’re dealing with the people who don’t have it and we’re trying to ensure that it’s there.”

The next morning over breakfast at the Economic Club of Canada, Morneau further dampened expectations by making a distinction between a national pharmacare “plan” and his idea of a pharmacare “strategy.”

Conflicting definitions

Many advocates define a national pharmacare “plan” as a national single-payer system run by federal and provincial governments that would cover a list of drugs considered medically necessary.

That’s what former Saskatchewan Premier Roy Romanow called for in 2002 when he chaired a royal commission on health. And that’s what Justice Emmett Hall called for in 1964 when he chaired an earlier  royal commission on health. And it’s also what the House of Commons Standing Committee on Health is expected to recommend after a two-year investigation into national pharmacare.

It’s even what the Liberal Party of Canada is calling for in a resolution currently up for vote by the national membership. That motion calls for “a universal, single-payer, evidence-based and sustainable public drug plan.”

FedBudget 20180227

Morneau is congratulated by Prime Minister Justin Trudeau after delivering the federal budget on Tuesday. There was no mention of pharmacare in a draft version of the budget given to reporters. (Sean Kilpatrick/Canadian Press)

But that is apparently not what Morneau and Prime Minister Justin Trudeau were announcing when they hastily added the words “national pharmacare” to Tuesday’s budget speech at the last minute.

(There was no mention of national pharmacare in the advanced version of the budget given to reporters. The short paragraph setting up the Advisory Council was added after the budget speech. The budget document did not allocate a single dollar to cover either the Council or a pharmacare program.)

Morneau explained at the breakfast meeting that he’s talking about a “strategy” that would patch up the current system to provide drug coverage for people who don’t have it now. It would also leave the current private employer-operated health insurance system in place.

Calls to recuse himself

And it just happens that Morneau is an expert in the private health insurance business. His former company, Morneau Shepell, is the largest benefit consulting firm in the country, as Morneau reminded the folks at the breakfast. He has divested his shares in the company.

Still, if Morneau was a peer-reviewing scientist he would probably have to leave the room when pharmacare came up for discussion, under the conflict-of-interest policy that govern academics, according to Steve Morgan, pharmaceutical policy researcher at UBC.

And on Wednesday there were demands that he recuse himself from the entire pharmacare discussion.

“With these deep ties to the private firm Morneau Shepell, we are concerned that the Finance Minister may not be approaching the issue of fundamental change in national drug insurance policies with an exclusive focus on evidence in the public interest,” said the Canadian Federation of Nurses, Canadian Doctors for Medicare and the Canadian Labour Congress, in a joint letter to the prime minister.

If Canada preserves the existing system dominated by a handful of large insurance companies and adds a layer of government funding for Canadians who don’t have workplace drug coverage, will that achieve the goals of national pharmacare?

‘The kinds of pharmacare models that Bill Morneau is saying he would like to see … will be more expensive, less equitable in terms of the distribution of financial burden, and possibly even less effective,’– Steve Morgan, pharmaceutical policy researcher

Many pharmacare advocates say no. They believe it could weaken the already complex system.

“The kinds of pharmacare models that Bill Morneau is saying he would like to see are the kinds that will be more expensive, less equitable in terms of the distribution of financial burden, and possibly even less effective in terms of making sure patients can access the medicines they need,” said Morgan.

Marc-Andre Gagnon said he spilled his coffee when he heard what Morneau told the breakfast club. As a pharmaceutical policy researcher at Carleton University, Gagnon has long warned about the inefficiencies and waste in the current system.

“For me what’s important is to defragment the system,” Gagnon said. “One program that is organized around cost effectiveness and more appropriate use of medicine, and with the bargaining power to negotiate for lower prices of drugs.”

A patchwork system

It sounds like a paradox, but moving from a patchwork system of private-public drug coverage to a federal-provincial single-payer drug program could save everybody money — citizens, employers and governments.

We’re already collectively spending about $ 24 billion a year on drugs. Under a universal pharmacare program, more people would be covered and drugs would cost less for everybody — about $ 4 billion less — for an estimated total cost of $ 20 billion per year.

And much of that money is already there, in the system.

The big difference is that Ottawa and the provinces would be the ones doing the actual transactions, negotiating the prices and paying the drug companies. And that combined national purchasing power would knock the sticker price of drugs down significantly.

Prescription pill pile

Under a pharmacare program, the government could negotiate lower prices for prescription drugs. (David Donnelly/CBC)

Businesses would transfer the money they now use to pay for employees’ drugs to the government system. And those companies would save almost $ 2 for every $ 1 they handed over, according to UBC’s Steve Morgan, who analyzed the cost of a national pharmacare program.

“We are already spending far more than we need. We just need to move the money we’re already spending around from the private sector into a public plan,” said Morgan.

Shifting private dollars to other priorities

Private insurance companies could still offer other employee benefits — vision, mental health, hearing, expanded dental care — health benefits with limited coverage because most of the money is spent on drugs.

It would be a technical challenge to work out how to move the money from the current insurance-based, employer-managed system to a public federal-provincial, single-payer system. But that’s what many assumed former Ontario health minister Eric Hoskins would be doing as head of the Advisory Council.

But if Hoskins is simply studying the idea once again, that takes the fizz out of this week’s pharmacare champagne.

From his office in Saskatoon, Roy Romanow was shaking his head at the news of yet another study on national pharmacare. His commission made the case for a single-payer national pharmacare program 15 years ago.

“The fact is, it has been studied to death,” said Romanow, now Chancellor of the University of Saskatchewan. “Studying it over again is just, in my judgment, needless.”

“We need a pharmacare plan.”

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