Canada’s prescription drug coverage has flaws, but scrapping it to start fresh would be disruptive and inefficient. We should leverage what we have.
The federal government’s Advisory Council on the Implementation of National Pharmacare will be releasing its report this spring. The council was created last June to “conduct a fiscal, economic and social assessment of domestic and international models relating to pharmacare.”
Prescription drug coverage in Canada is complex, with a lot of variation in funding models, availability of coverage and access to particular drugs. This complexity produces challenges in ensuring comprehensive access to necessary medicines for all Canadians.
But it’s far too easy to conclude that the current system has failed so we should tear it down and start afresh. In fact, most Canadians are served well by our dual public and private coverage. Despite its flaws, the system successfully processes 672 million individual drug claims per year, and 99 percent of them are settled electronically. Rather than rejecting it all, a more effective and less disruptive approach would be to fix whatever parts are not working.
Any system of comprehensive universal access to drugs for all Canadians should leverage the strengths of our current mix of public and private coverage. The principal objective of pharmacare should be to close the existing gaps in coverage for vulnerable Canadians: the underinsured and the uninsured.
Which drugs will be covered, by whom and how, will be a key question to address. Each province and territory has its own formulary that lists the drugs it covers; private insurers do the same for their plans. There is significant variation among these formularies, not only in the selection of medicines but also in their rules for eligibility, enrolment and the level of user-pay that is required. There are also differences in delivery from plan to plan and restrictions on various drugs that range considerably across provincial formularies.
So, depending on where people live in Canada, these differences raise some challenges of equity of access. For example, in the four western provinces, all medications used to treat cancer are paid for by provincial cancer agencies. In Ontario, however, if a cancer drug is delivered intravenously, all Ontario residents have access to it through the hospital setting. But if a drug is taken orally, the extent of coverage depends on whether the patient is on the Ontario Drug Benefit Plan or has access to a private plan. Without one of these plans, patients might have to pay out-of-pocket costs — and the average cost of non-hospital-based cancer treatment has been estimated at $65,000. These differences do not make sense, and they are inequitable.
Another area that requires urgent attention is the development of new options for the coverage of drugs for rare diseases, which varies significantly across the country. Canada is an outlier country in not having a strategic approach to this aspect of access; we need a more consistent and transparent funding approach to provide more equitable and timely access to medicines for patients with rare diseases. This issue impacts both public and private plans as well as small businesses with fully insured plans where the current pooling mechanism is not working. There is an opportunity here for immediate federal-provincial-territorial cooperation and engagement with the pharmaceutical industry to develop and launch innovative medications that can reduce the need for costlier services or treatments.
While the options for pharmacare are being considered, there are ongoing regulatory issues that have the potential to reduce access to medicines. Canada currently ranks well in global launches of innovative medicines, but there is considerable risk that the federal government’s proposed changes to the Patented Medicine Prices Review Board (PMPRB) could slow down the timelines for making new drugs available to Canadians. Rather than modernizing regulations to enable a more sustainable pharmacare program, the proposed PMPRB changes will create market conditions that will discourage companies from launching new medicines in Canada, limiting patients’ access to the latest treatments.
Perhaps the most difficult issue to address in moving toward national pharmacare will be how to deliver it. Canada’s drug coverage system is a product of the shared jurisdiction between the federal and provincial-territorial governments. As a result, there might be no immediate single path for pharmacare delivery, but that need not prevent progress. It might be that the federal government can play a critical coordinating and financing role to help provinces and private insurers elevate standards for access to medicines and broaden coverage across the country. From a practical perspective, federal policy-makers should focus discussions with provinces on the broader fiscal framework required to fill gaps in coverage and reduce inequities in access.
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