Don’t blow up pharmacare as we know it. Just fill the gaps

By Brett J. Skinner

The federal Council on the Implementation of National Pharmacare recently released its final report. The council chose a universal public single-payer plan after considering alternatives, including a public catastrophic safety net, like Ontario’s Trillium program, and a universal public-private system, similar to Quebec’s. Chair Eric Hoskins said they also rejected a fill-the-gaps model designed to cover people with insufficient drug insurance.

According to the report, “the council felt that any advantages presented by these models — either because they already exist in some form in Canada or because they might initially entail a lower level of public investment — were outweighed by the longer-term efficiency and sustainability of a single‑payer model.” But really, the result was predetermined. The report admits, “The council deliberated the merits of these models as stepping stones toward the creation of a universal, single-payer, public pharmacare plan.”

The council was too quick to dismiss less expensive and less disruptive policy options that would fill the gaps in the current system. There was no genuine consideration of contrary evidence. The report is based on false assumptions regarding drug costs and insurance coverage, and it failed to identify the real cause of prescription affordability challenges.

The report’s first justification for single-payer pharmacare is that drug costs are unsustainable — particularly for patented medicines. But research by the Canadian Health Policy Institute has shown that there is no spending crisis regarding patented medicines in Canada. Total sales of patented medicines before rebates were only $16.8 billion in 2017, a fraction of the $34 billion cited by the council (which includes non-patented drugs, supply-chain and drug plan administration costs). Other components of the health-care system account for much larger shares of spending than patented medicines. Adjusting for such factors as population, CPI and GDP, the total direct-cost burden from patented medicines is stable and moderate. Prices are also stable and moderate relative to CPI or comparable countries.

The report also claimed that millions of Canadians have no (or inadequate) drug insurance, forcing trade-offs between necessary medicines and food, heat or rent. Yet CHPI research has shown that all Canadians are insured under existing private, public and safety-net drug plans. There are cost-sharing eligibility requirements for safety-net coverage under existing public drug plans. But in every province, public plans are the payer of last resort and out-of-pocket costs are capped at affordable levels across all income levels.

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