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Editorials Report goes all in on pharmacare, and that may be a mistake

In a single paragraph in its final report, the federal advisory council on implementing national pharmacare in Canada paints a clear picture of what life would be like in an ideal world.

“When Canadians go to the pharmacy with their prescription and their health card, they will pay no more than $2 or $5, depending on the drug," says the council, which is calling for Ottawa to adopt a public single-payer pharmacare system similar to medicare. “That’s it. No more complicated forms. No more steep deductibles or limits. No more stress.”

If the council’s proposal was implemented, that scene would play out uniformly in every province and territory.

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It would end a shameful situation in which one in five Canadians has inadequate or no drug coverage, forcing some to borrow money to pay for their drugs, and others to skip doses, putting their health at risk.

It would eliminate absurdities like that of cancer patients paying out-of-pocket for the drug treating their disease, while patients undergoing chemotherapy in a hospital don’t pay a cent. And it would let Canadians switch jobs without fear of losing their company-provided insurance.

As the report accurately states, the current patchwork of private insurance, inconsistent provincial coverage and the absence of any coverage at all for millions of Canadians “in no way resembles a ‘system.’”

This lack of a system means drug prices in Canada are among the highest in the world. That’s because there is no single buyer that can demand a bulk price, and because private insurers tend to cover the broadest possible range of medications, giving doctors no incentive to prescribe the lowest-cost and most efficient versions.

Having a federal agency set the national formulary of covered drugs and do all the purchasing could lower drug prices in Canada by 10 per cent a year, the report says.

The report also points out that national pharmacare would mean Canadian companies no longer had to offer drug coverage as a benefit, saving them millions of dollars.

On paper, it is impossible not to like the idea of making sure all Canadians have drug insurance, with low co-payments, and coverage regardless of where they work or whether they have a job, under a system that can do a better job of controlling prices so that we no longer pay the world’s third most expensive drug costs.

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But between that ideal scenario and the current mess lie a lot of hurdles. One is money: The report estimates a national pharmacare program operated and funded by the federal government would cost Ottawa $15-billion a year. While there would be savings for the provinces, individual Canadians and private companies, the federal government would have to raise taxes to cover its obligations.

Another hurdle is Canadians’ legitimate fear that a public program wouldn’t be as generous as their private plans. There is no guarantee the proposed national drug agency would cover the new biologic drugs and other expensive advancements many people rely on. There is also the worry that a federal drug bureaucracy would move slowly on adjustments to its formulary, forcing people to pay for new medications while Ottawa dithered.

Politics, too, will be an issue. While the advisory council wisely proposes an eight-year stepped approach to bringing in national pharmacare, and says Ottawa should pay all the interim costs, there is no guarantee the provinces will play ball – especially ones whose governments are antagonistic toward the Trudeau Liberals (all of them, these days).

Finally, the advisory council may have made a mistake by not offering alternatives to its utopian proposal. There are other ways to improve drug coverage, the most obvious being Obamacare-style programs in which all citizens are required to buy private insurance for a price managed by the government, and with a single formulary of covered drugs.

The bottom line is that Canada’s inconsistent drug coverage can’t be fixed without government intervention of some kind. That includes lowering the nation’s drug bill by creating a government system of bulk purchases, limiting drug co-pays and regulating premiums.

But whether that should be done by going all out with full public pharmacare, or through universal private coverage regulated by the government, is still up for debate. It is wrong, and possibly self-defeating, to say that the only answer is the most grandiose one.

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