New Ideas for the Future of Pharmacare

In the wake of Justin Trudeau’s election, Canadians are looking forward to action on Pharmacare from the new federal government. CARP has long called for comprehensive universal Pharmacare, and we were pleased to see all four major parties make promises to reduce drug costs and expand access in their electoral platforms. The Liberal platform included a pledge to purchase drugs in bulk and reduce the amount that provincial governments pay for drugs, but didn’t outline precisely how and when those changes will occur. Nevertheless, Parliament as a whole is now well-positioned to move on the issue, and many Canadians are anxious for the federal government to play a role in expanding and improving Pharmacare – sooner, rather than later.

On October 21, the C.D. Howe Institute released a report which addressed these concerns. The report called for the new federal government to expand its role in Pharmacare and ensure that all Canadians, regardless of their financial means, are able to fill their prescriptions. To accomplish this goal, the report suggested that the federal government share costs with provincial governments and design a common national formulary – an official list of all medicines that qualify for coverage under public plans. These reforms would help to create a nationwide network of income-based coverage, reduce access barriers for low-income patients, and improve cooperation in drug pricing.

Creating a Cost-efficient Plan

Some Pharmacare advocates call for immediate, first-dollar coverage for all prescription drugs. Under a “first-dollar” plan, all drug costs would be covered by the government, with patients paying no upfront costs or deductibles. According to C.D. Howe, such proposals are unrealistic. Even if full, first-dollar drug coverage produces long-term savings, its immediate impact would be an increase in government spending and a burden for taxpayers. Voters may be more eager to reduce short-term spending than to wait for promised future savings.

To achieve many of the same objectives as a federally funded “first-dollar” plan, but in a less disruptive, more cost-efficient fashion, C.D. Howe suggested that the federal government:

  • Create nationwide standards for providing Pharmacare coverage based on family income, and subsidize provincial programs which meet these guidelines
  • Collaborate with provinces to create a standard list of drugs to be covered
  • Partner with provinces and territories to purchase drugs in bulk
  • Work with provinces to create new regulations for safer prescribing

Coverage Based on Income

Most people who fail to fill prescriptions live on low incomes, without access to private or employer-based health insurance. Recognizing this, several provincial plans cover all drug purchases which exceed a certain amount of a family’s income. C.D. Howe’s proposed initiative would extend these plans across Canada, and provide coverage for all drug costs which exceed 3% of a family’s annual income.

Addressing the Pricing Issue

Justin Trudeau’s electoral platform included a promise to purchase prescription medication in bulk to reduce the amount that provincial plans pay for drugs. Bulk purchasing would make Canada’s current Pharmacare system more equitable, ensuring that smaller provinces, private providers, and uninsured individuals do not pay higher prices than large provinces do.

C.D. Howe recommends a partnership between the federal and provincial governments, building on the current pan-Canadian Pharmaceutical Alliance, with an emphasis on transparency and public accountability.

Common Formularies

Many national and provincial agencies evaluate drugs to select the most effective, low-cost treatments. Based on the results of these evaluations, provinces develop “formularies,” or official lists of all the drugs their plan will cover. Unfortunately, this means that drug coverage is inconsistent across Canada; a patient may have their essential medication covered in Vancouver, but not in Calgary. In C.D. Howe’s view, the federal government should strengthen the role of the Canadian Agency for Drugs and Technologies in Health and give the organization a mandate to develop a single, uniform, nationwide formulary.

Quality of Prescribing

When the quality of prescribing suffers – for instance, when a patient is prescribed too many drugs simultaneously, or prescribed an improper dosage – there is great potential for drug overuse, misuse, and other safety and adherence issues. Elderly people with multiple prescriptions are especially vulnerable to issues arising from drug misuse. C.D. Howe argues for new, nationwide prescription standards, which would improve seniors’ quality of life, reduce hospital costs, and render the entire health system more cost-efficient.

Only time will tell what the new Liberal government has in store for Pharmacare, but the C.D. Howe Institute’s report offers a number of compelling and innovative suggestions to move forward an issue that all parties have recognized as crucial to the well-being of Canadians and the sustainability of the healthcare system.

Related