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Politics Federal budget 2019: Ottawa outlines plans for pharmacare, earmarks funds for new national drug agency, rare-disease meds

Prime Minister Justin Trudeau and Minister of Finance Bill Morneau arrive in the Foyer of the House of Commons to table the Budget, on Parliament Hill in Ottawa on March 19, 2019.

Justin Tang/The Canadian Press

In an effort to lay the groundwork for a national pharmacare program, Ottawa is promising to create a new drug agency and eventually to spend as much as $500-million a year paying for expensive medicine for rare diseases.

But the commitments in the Liberals’ pre-election budget fall far short of the comprehensive plan that pharmacare boosters hope to see debated on the campaign trail in October.

“These are foundational elements that are obviously needed if we’re going to have pharmacare in Canada, but none of this is pharmacare,” said Danielle Martin, vice-president of medical affairs at Women’s College Hospital in Toronto and a prominent pharmacare advocate. “In and of itself, a drug agency does not lead to my patients or anybody else’s patients actually being able to fill a prescription when they need it.”

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The budget allocates $35-million over four years, beginning in 2019-2020, toward setting up a transition office for the Canadian Drug Agency, a new organization that would manage the country’s first-ever national formulary – a centralized list of drugs covered for everyone, regardless of their ability to pay.

The new agency would also lead pricing negotiations with drug makers and conduct health technology assessments evaluating the efficacy and cost-effectiveness of new pharmaceuticals, two functions already performed by other players in the health-care system.

Michael Law, a University of British Columbia professor who holds the Canada Research Chair in Access to Medicines, said it makes sense to bring those tasks under one roof, especially if the government wants to reduce Canada’s drug prices and per-capita drug spending, which are among the highest in the world.

Despite that, an estimated one in five Canadians is either uninsured or underinsured.

“I think there’s a lot to be said for having the agency that reviews the evidence, and has that expertise in-house, to also be doing the negotiations with drug companies in terms of price reductions," Prof. Law said. "This will particularly be beneficial in the case of expensive drugs for rare diseases.”

Paying for rare-disease drugs, also known as orphan drugs, has become a major flashpoint in the pharmacare debate.

Canada does not have a national strategy for dealing with high-cost drugs taken by a small number of Canadians, despite the financial pressure those treatments are putting on government and employer-sponsored drug plans.

Of the 51 new medicines approved in the United States, Europe or Canada in 2017, nearly half were designated orphan drugs in the U.S. or Europe. (Canada doesn’t have a formal orphan drug designation.)

All but two of the new non-cancer medications cost more than $10,000 a year, and several cost more than $100,000 a year, according to a report released last month by the federal drug-pricing regulator.

The lack of a coherent national policy also hurts patients with rare and often devastating diseases, some of whom have to move to a different province to garner public funding for the drugs they need.

In their budget, the Liberals vowed to implement a national strategy for rare-disease drugs, and to allocate up to $1-billion over two years, beginning in 2022-2023, to help foot the bill for the super-expensive medications. The budget also floats a possible $500-million in funding for that purpose every year thereafter.

British Columbia Health Minister Adrian Dix said he welcomed Ottawa’s financial support for rare-disease drugs. But he said his public drug plan and B.C. patients need the money today, not three years from now. “The status quo is under significant pressure,” he said. “What’s important this time is [pharmacare] has to succeed, or there’ll be consequences for that.”

Establishing a new drug agency was one of the key recommendations in an interim report released earlier this month by the Advisory Council on the Implementation of National Pharmacare, an expert panel that Finance Minister Bill Morneau announced in last year’s budget. The report also flagged the challenges posed by expensive drugs for rare diseases.

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The federal budget includes new spending in a range of areas including support for first-time homebuyers, ensuring seniors are enrolled in CPP and the further advancement of reconciliation.

The seven-member panel, led by former Ontario health minister Eric Hoskins, is expected to release final recommendations by the end of spring for overhauling Canada’s fractured approach to paying for prescription drugs.

The council could endorse a universal, single-payer system that does for drugs what Medicare did for hospital and physician care, or it could advocate for something more modest that would fill the gaps in the existing private-public insurance system.

Reports favouring some form of national pharmacare for Canada have been piling up since the middle of the past century.

One of the most recent came from the Liberal-dominated parliamentary committee on health, which last April endorsed a universal single-payer system and suggested the Canada Health Act be expanded to cover prescription drugs dispensed outside of hospitals.

Women’s College’s Dr. Martin, a family physician who delivered an address about pharmacare at a Liberal convention last year, said she hopes the government will embrace a universal, comprehensive single-payer system and run on it in the fall, after the advisory council’s report is published.

“My biggest fear," she said, "is that any political party of any political stripe puts in place something small, calls it pharmacare and turns the page. Then we’ll have another generation of work to do to try to get actual access to actual medicines for actual humans who need them.”

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