Pharmacare: Misconceptions and facts

Opinion

Hey there, time traveller!
This article was published 15/03/2024 (578 days ago), so information in it may no longer be current.

Currently, more than one million Canadians do not have drug coverage that meets their needs. I see the direct consequences of this problem during almost every shift I work in the emergency department, where patients have become ill because they could not afford the medications they need in the community. Although the drugs with which patients are treated in hospitals are already covered, this is not necessarily the case outside of hospitals.

During my time as a member of Parliament, I served on the standing committee on health, where for two years we studied the issue of a national pharmacare program, which was the most comprehensive study on the subject in Canadian history. Our study gave many detailed recommendations on how a practical and sustainable national pharmacare system could be implemented.

Key recommendations of the report include:

1) Expanding the Canada Health Act to include prescription drugs dispensed outside hospitals;

2) Developing a common national prescription drug formulary;

3) Implementing a single-payer universal prescription drug coverage program for all Canadians; and

4) That the Government of Canada, in collaboration with the provinces and territories, designate the pan-Canadian Pharmaceutical Alliance as the common agent for the bulk buying of prescription drug pharmaceuticals.

Unfortunately, there has been much hesitancy in the adoption of these recommendations. Much of the hesitancy regarding pharmacare (including from the Liberal government in which I served) was due to a tremendous amount of misinformation from different sectors with their own agendas. Aggressive lobbying and op-ed press pieces from various groups convinced many people that a national pharmacare program is prohibitively expensive, unnecessary and could delay the development of new medications. In order for a pharmacare program to be developed, it is essential that a number of key misconceptions be clarified.

Misconception No. 1 is that pharmacare is too expensive.

Canadians pay the third-highest drug prices in the world. Each province and territory negotiates its own bulk purchase agreements with drug companies. This cost would be decreased by having all drugs in Canada made in one large bulk purchase (instead of 13 smaller ones). Economies of scale would have a significant effect in mitigating high drug costs. An evidence-based formulary that covers essential medicines, but does not cover expensive equivalents that confer no added advantage, would further mitigate costs. (In fact, the federal government is currently developing a national agency to take these steps.)

Another issue to take into account when considering the cost of pharmacare is the cost of adverse medical outcomes due to non-compliance. When a patient with diabetes goes several days without insulin because they can’t afford it, and consequently develops diabetic ketoacidosis, this can result in an ICU admission that can cost $20,000. When a patient chronically misses insulin doses (again because they can’t afford it) they can suffer renal failure requiring dialysis, which costs $70,000 per year for every patient. Estimates vary on the cost of what is termed “cost-related non-compliance” and is somewhere between $7 billion and $9 billion per year. The savings to our health-care system by increasing compliance is rarely calculated when the “cost” of pharmacare is being considered.

Misconception No. 2 is that reining in the prices that drug companies can charge would decrease the availability of new medications.

The Canadian government has been working on a plan to renegotiate what drug companies can charge for bulk medication purchases.

Unfortunately, the government decided to pause this, based on claims that decreasing drug prices would “stifle innovation” and decrease the development of new medications. These claims have come from the pharmaceutical industry, and from patient advocacy groups who claim that certain patients waiting for new medications would suffer due to delayed drug development. What many people don’t realize is that some of these “grassroots” advocacy organizations are, in fact, funded by the pharmaceutical industry, and much of their information is from that very same industry that funds them.

The truth is that new drug development is a global issue. In no country where drug prices have been reined back has there been a decrease in the development of new drugs. The federal government needs to realize that the concern of lower drug prices “stifling innovation” (which would be a legitimate concern, if it was true) is simply not supported by facts. To that end, I have been corresponding with members of the federal government to inform them of this issue.

Misconception No. 3 is that most Canadians are covered through provincial and work plans.

Canada is under a patchwork of coverage systems. Provincial plans vary, and people who move between provinces notice significant changes in the medication coverage they receive. (Technically this is a violation of the key Canada Health Act principle of portability.)

As for work plans, depending on the employer, many plans have significant exclusions (like “pre-existing conditions” clauses), caps and deductibles that still put a significant financial burden on patients who are considered “covered.”

The reliance on job-dependent drug plans also has implications for businesses that provide them. The two largest expenses for businesses are wages and benefits. The most expensive benefit is drug plans. This places a significant burden on businesses, particularly small- to medium-sized businesses. When businesses do not have this pressure to provide drug coverage, they can hire more staff, improve wages or be better able to provide insurance for other services such as dental and vision.

Furthermore, some businesses have undertaken strategies to avoid paying into drug plans, such as only hiring part-time workers (who are given insufficient work hours to qualify for coverage), or by designating their employees as “independent contractors,” thus relieving those employers of any responsibility to provide benefits. Such individuals are thus not provided with any coverage from their employers, yet have incomes that are above the threshold for most existing public plans.

Many people advocate for a “means-tested” system of private and public coverage. However, given the number of people with part-time, occasional or intermittent work, there will always be people who fall through the cracks, particularly the working poor.

The issue of developing a national pharmacare program is complex, and despite my political affiliation (which is a matter of public record), I have been critical of the Liberal government’s hesitance to adopt the recommendations of our report. However, I understand that caucus and cabinet members have been receiving a tremendous amount of contradictory (and often incorrect) information, and I am hopeful that continued advocacy will make this necessary program a reality.

The report can be accessed at ourcommons.ca/content/committee/421/hesa/reports/rp9762464/hesarp14/hesarp14-e.pdf

» Dr. Douglas Eyolfson is an emergency physician in Winnipeg and a former member of Parliament. This column previously appeared in the Winnipeg Free Press.