A universal program for prescription medication could save Canadians more than $4 billion each year, according to a new report released by the Parliamentary Budget Officer. However, experts say many challenges lie ahead with implementing such a program.
Among all OECD countries with universal health coverage, Canada is the only one that doesn’t include prescription drugs in that coverage. The new report used a list of prescriptions publicly covered in Quebec to estimate the cost of implementing a national pharmacare program in the country.
In Quebec, all residents are required to have prescription drug coverage. For those who are not eligible for private insurance, prescriptions are publicly covered under the Public Prescription Drug Insurance Plan. This plan is administered by Régie de l’assurance maladie du Québec (RAMQ) which is the government health insurance board for that province.
“Right now, Canada has one of the highest prices for prescription drugs,” said Jean-Denis Fréchette, the current Parliamentary Budget Officer. “Almost 10 per cent of Canadians report non-adherence to prescription drugs because they can’t afford to pay.”
According to the report, from July 2015 to June 2016, $28.5 billion was spent on pharmaceuticals, excluding medications given to patients in hospitals. These costs are currently paid for by public insurance plans ($13.1 billion), private insurance plans ($10.7 billon) and individuals ($4.7 billion). With a universal program, $24.6 billion of this could be covered.
Financing the system
Steve Morgan, a professor in the School of Population and Public Health at the University of British Columbia, says creating a universal pharmacare system in Canada will not have a major impact on taxes because new money is not needed to fund the system.
“Canadians are already spending more on prescription drugs than would be necessary to run a universal pharmacare system,” he said. “So, we need no new money to run the program, we just need to move some of the money that is currently paid through unions and employers that buy private insurance, back to the public system.”
Along with saving money, a universal pharmacare program also has other benefits, such as helping address the problem of non-adherence to prescriptions. A universal system might also decrease the cost of drugs.
“A system of universal pharmacare would give Canada the ability to exercise more market power,” said Morgan. “If we had a single-payer system, Canada would be a very powerful negotiator with drug companies for better prices.”
Countries such as Australia who already have single-payer universal drug plans spend dramatically less than Canada on both prescriptions and over-the-counter drugs, according to Morgan.
Challenges with provincial and federal relations
One of the major challenges with implementing a national pharmacare program would be getting the provincial and federal governments to work together.
“The Constitution says health-care services are provincial jurisdiction,” said Raisa Deber, a health policy researcher at the University of Toronto. “Given that fact, all we can do is encourage the provinces and territories to move towards universal pharmacare.”
Fréchette said the collaboration won’t be easy.
“Political negotiations between the provincial and federal governments are always very challenging,” he said. “However, in order to save the money proposed in the report all provinces must agree that they will buy their drugs together.”
Challenges with stakeholders
Another major challenge involves overcoming opposition from stakeholders, such as pharmaceutical companies and private insurance companies, who profit from the current system.
“Private insurance companies are really dead set against losing all the money they derive from private drug insurance,” said Douglas Angus, an expert in health policy at the University of Ottawa. “I think the government will have a big challenge to work with the private sectors on this.”
Universal pharmacare would save money for Canadians and corporations who pay for medicine in the current system. However, it would result in lost revenue for a number of powerful participants.
“Stakeholders such as drug companies are powerful because they are important employers and can promise to invest in jobs,” said Morgan.
However, drug companies may not be as powerful as they once were, according to Marc-André Gagnon, an expert in pharmaceutical policy at Carleton University.
“For a very long time, drug companies were important employers in Canada, however in the last few years there have been massive layoffs in the pharmaceutical sector,” he said.
“The political influence these companies have is lower than what it was before and I think now we are really seeing a window of opportunity in terms of reforming the system,” Gagnon added.
According to Morgan, the evidence supporting the implementation of a universal pharmacare is adequate and it’s now just a question of politics.
“Will Canadians speak up and tell the government that this is an issue they will vote for?” he said. “If that happens in sufficiently large numbers then the government will have the political courage to move forward with universal pharmacare.”
Higher immigration a key part of Canada’s economic growth, report says
By Ryley White | A federal advisory panel of experts has recommended that Canada take...