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Canada Federal pharmacare report backs $15-billion universal, single-payer system

The council predicted that a single-payer plan would reduce Canada’s overall per-capita spending on prescription drugs, which is among the highest in the world.

Jacques Boissinot/THE CANADIAN PRESS

Canada should adopt a universal, single-payer public pharmacare program that does for prescription drugs what medicare did for services provided in hospitals and doctors’ offices, according to a new advisory council report.

The Liberals – who established the pharmacare council in their 2018 budget – wouldn’t immediately commit to putting the blueprint into their platform. But with a federal election only four months away, the proposed plan provides them with a signature policy if they choose to run on it.

The council’s recommendations would mean a radical overhaul of the country’s patchwork approach to paying for prescriptions – one the report predicts would cost governments an additional $15.3-billion annually by the time the plan is fully implemented in 2027.

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However, the council predicted that a single-payer plan would significantly reduce Canada’s per capita prescription-drug spending, which is among the highest in the world.

“I think this is a good time for us to show courage and boldness and do some nation building,” said Eric Hoskins, the former Ontario health minister who chaired the advisory panel. “The price is too high, frankly, not to do anything.”

As Dr. Hoskins and his colleagues envision it, national pharmacare would be implemented gradually, with a new national drug agency negotiating prices on a “carefully chosen list of essential medicines” to be included in the first phase of the plan, beginning Jan. 1, 2022.

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The initial list would cover most major conditions and represent about half of all prescriptions.

The drug agency would then aim to negotiate further pricing and supply arrangements for more drugs, with an eye to having a comprehensive master list, or formulary, in place by 2027.

The drugs on the list would be virtually free for all Canadians, with the exception of a $2 co-pay for drugs on the essential list, and a $5 co-pay for drugs on the expanded list.

There would be a co-pay limit of $100 per year a household. The poorest Canadians would be exempt from co-pays.

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The plan also calls for a national strategy on drugs for rare diseases, whose astronomic prices are putting pressure on private and public drug plans.

Right now, Canadians pay for prescription drugs in one of three ways: through extended workplace and privately purchased health plans; through government drug plans, which are often reserved for the poor, for seniors and for those with catastrophically high drug bills; or out of their own pockets.

The pharmacare plan laid out in Wednesday’s report is still a long way from being enacted.

If Prime Minister Justin Trudeau’s government were to embrace the recommendations and win re-election in October, it would still have to persuade provincial and territorial governments to take part.

The report recommends that Ottawa entice the premiers with a new, dedicated fiscal transfer payment for pharmacare, one that would cover all costs over and above what provincial and territorial governments are already spending on their public drug plans.

The report says a unanimous agreement would not be necessary off the bat; provinces could join in over time they way they did as medicare was founded and expanded more than 50 years ago.

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Federal Health Minister Ginette Petitpas Taylor, who said she was still reviewing the report, would not immediately commit to paying the full incremental cost of a national pharmacare plan.

But she acknowledged that Ottawa would not be able to bring the premiers to the table without first pledging some money for it.

“We certainly don’t expect provinces to foot the bill here," Ms. Petitpas Taylor said. "If we want to put in place a national pharmacare program, the federal government has to play a leadership role.”

If the national advisory council’s plan is enacted, it could deliver a significant blow to the country’s private-insurance and pharmaceutical industries, both of which have argued that Canadians would be better off if Ottawa bolstered the existing private-public system instead of blowing it up.

Stephen Frank, president of the Canadian Life and Health Insurance Association, warned that Canadians who are happy with their existing private benefit plans could wind up losing access to some of their medications under a purely public system.

The association, which represents private insurance companies, said that approximately 7.7 million Canadians are taking privately covered drugs for cancer, depression, diabetes, pain and other conditions that are not listed on their provinces’ existing public drug plans.

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“For the vast majority of Canadians – some 25 million of them – with private coverage, they already have excellent plans," Mr. Frank said. “Those are at risk if you move to a first-payer federal system.”

Like Mr. Frank, Marilyn Gladu, the Conservative health critic, argued it would be safer and far less expensive to plug the gaps in the existing system.

“With a $15-billion price tag on top of a $20-billion deficit, the only way the government can pay for that is raising taxes," she said. "I don’t think that’s a good idea.”

Dr. Hoskins said that a fill-the-gaps approach would not achieve anywhere near the savings of a national, public program that could harness the buying power of all Canadians to negotiate lower drug prices, encourage wider use of cheaper generics and limit coverage to medications with the best prices and evidence of efficacy.

By 2022, total spending on prescriptions drugs would be $300-million lower under the first phase of national pharmacare than if the status quo continued, the report predicted. That estimate would rise to $5-billion by 2027.

NDP Leader Jagmeet Singh and Prime Minister Justin Trudeau trade partisan shots over pharmacare – an issue both parties are likely to put forward in the fall election campaign – after an expert panel called for the creation of a universal, single-payer national plan. The Canadian Press

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