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New Brunswick Premier David Alward speaks in Toronto in April, 2013.

J.P. MOCZULSKI/The Globe and Mail

"The New Brunswick Drug Plan is the most important initiative since the introduction of Medicare," Health Minister Hugh Flemming said in unveiling his province's version of pharmacare.

That's a pretty bold statement. If it's true – which it likely is – it's nothing to brag about, though.

Rather, it's a testament to the sad reality that medicare hasn't really changed appreciably in the past century.

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Medical care is very different today than it was in the 1950s and 1960s, when the building blocks of medicare were put into place. But the public insurance plan that was created to meet the needs of the post-World War II generation – covering only hospital and physician services – remains frozen in time.

Today, prescription drugs can be as essential (or "medically necessary" to use the language of Canadian law) as any other treatment, but drugs are not covered universally.

Instead, we have a patchwork of public plans for seniors, for people on social assistance, for patients with rare and exorbitantly-costly-to-treat conditions, and most Canadians must rely on private drug plans for coverage.

Most troubling of all is that there is a large and growing number of Canadians with no drug coverage.

In some provinces, you can still suffer a devastating financial wallop paying for essential medications, such as cancer drugs. Some people have even lost their homes – effectively been bankrupted – to pay their drug bills, a reality that undermines the principles of medicare and offends Canadian values.

In New Brunswick alone, there are an estimated 70,000 families – roughly one-third of the population of 750,000 – with no prescription drug insurance.

But that's about to change. The legislation unveiled by Mr. Flemming last week will see every citizen have prescription drug insurance within the next two years.

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As such, New Brunswick will become the second province, after Quebec, with universal drug coverage.

However, what the province's Progressive Conservative government is introducing is an insurance plan that is very different from medicare.

When you go to a hospital or to a doctor there is first dollar coverage – meaning there are no user fees or co-payments.

Under the New Brunswick Drug Plan, citizens will pay premiums (adjusted to income) and significant co-pays, much like they would with a private insurance plan. The plan will even be administered by a private company, Medavie Blue Cross.

The law does not create a new bureaucracy. It makes it mandatory to have prescription drug insurance (by April 2015); if you don't get it from your employer, then you can sign onto the public plan. This is exactly the same approach that Quebec has taken.

The New Brunswick plan will be implemented in two phases. Beginning in May 2014, anyone with a valid medicare card can enroll in the provincial drug plan.

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Premiums will range from $67 a month ($800 a year) for families with an income of $26,360 annually or less, up to a maximum of $133 monthly ($1,600 a year) for individuals earning more than $50,000 or families with an income in excess of $75,000.

In phase 2, beginning April 2015, it will become mandatory for all citizens to have prescription drug insurance, through either a private or public plan; there will also be minimum standards for what is covered and costs will be capped.

All members of the public plan will be required to make a 30 per cent co-payment for their prescriptions but that cost cannot exceed $30 per prescription or $2,000 annually. The legislation also makes it illegal for private group plans to set annual or lifetime caps on coverage.

The initiative is well-intentioned but some of the details are concerning. For someone with a service job earning close to minimum wage and suffering from a chronic illness like diabetes, for example, essential prescription drugs will still cost up to $2,800 a year – about 10 per cent of pre-tax income.

That is not affordable; in fact it's the kind of burden medicare is supposed to eliminate.

The government also seems to have done little to avoid so-called cream-skimming, the practice where private insurers enroll profitable clients and dump the really expensive ones on the public plan. That is an unnecessary gift to industry.

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The main argument that has been used over the years to avoid implementing universal prescription drug coverage is that it would be too costly for both employers and the state (while alleviating the burden on individuals of course). So it's worth noting that costs of the New Brunswick Drug Plan are modest.

During phase 1, the total cost of the plan will be an estimated $50-million, with $23-million paid in premiums and the other $27-million from provincial coffers. On a provincial health budget of $2.5-billion, that's roughly 1 per cent.

Once the drug plan is fully implemented, the total cost is anticipated to be between $120- and $150-million, shared roughly 50-50.

Mr. Flemming said he thinks some of those costs will be recouped because, when people – and in particular those with chronic conditions – have access to prescription drugs they tend to make fewer emergency room visits and are hospitalized less often.

The one aspect of the drug plan that has been little discussed to date though is probably the most important. The government will determine what is on the provincial formulary – a list of drugs that are eligible for reimbursement. (Private plans will also be legally obliged to cover all those drugs.)

In Quebec, drug plan costs and premiums soared because a bloated formulary and the failure to implement policies like mandatory generic substitution.

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The real challenge New Brunswick will have is saying "No" to drugs that are marginally effective or not cost-efficient, something that can be difficult to do when there is constant political pressure.

For all its flowery language about the New Brunswick Drug Plan being the greatest innovation since medicare itself, the reality is that New Brunswick is taking baby steps toward reforming the public health insurance system to meet the needs of citizens in the 21st century.

But at least those steps are in the right direction – and they put to shame the efforts of most other provinces who, when it comes to creating a true pharmacare program, continue to sit on their hands while Canadians suffer.

André Picard is The Globe's health columnist. Follow him on Twitter: @picardonhealth

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