The Committee for the Implementation of National Pharmacare, chaired by former Ontario health minister Dr. Eric Hoskins, has released its final report. The Hoskins report unequivocally calls for inclusion of universal, single-payer pharmacare into medicare, our public health-care system. But there are important factors that render the proposed pharmacare framework a different beast from medicare, and also some historical commonalities that suggest a rocky path to implementation.
First, under medicare, hospital and physician services are free to all Canadians. In the case of pharmacare, the committee proposes a very modest set of maximum copayments or user fees for all drugs on the new national formulary (the list of drugs to be covered). There would be carve-outs for those on lower incomes and a maximum yearly amount of $100 per person.
Second, under medicare, a number of provinces restrict the sale of private health insurance for services that are publicly funded. The worry there is that having a two-tier system will attract scarce medical labour away from the public to the private spheres. By contrast, the pharmacare committee explicitly recommends that people still be able to buy private health insurance if they wish to cover prescription drugs not included on the national formulary. The same concerns don’t exist in this context, because buying a prescription drug privately doesn’t undercut the ability for the system to supply a publicly funded drug.
The third major contrast with medicare, and the most critical one, in my opinion, is the centralized nature of the proposed universal program. The committee recommend an arm’s-length agency that will determine a national formulary for the entire country. The most important medicines will be on this formulary. This agency will also be empowered to bargain with drug companies to get the best price. In order for national pharmacare to work, the drug agency must be empowered to be a savvy buyer on behalf of Canadians. It will have to reward real breakthrough drug innovations with high prices, and have the fortitude to say no to drugs that are of relatively little value. The committee seems to envisage the drug agency determining the list of essential medications for coverage as a necessary first step, but putting drugs on the formulary before negotiating the price will undercut the ability of the drug agency to negotiate a reasonable price.
Fourth, the committee’s plan for national pharmacare could herald a new type of relationship between the federal government and the provinces. Hoskins is acutely aware of what the provinces would need to get on board with national pharmacare. The committee proposes that the federal government pick up the tab for the costs that exceed what provincial governments are currently spending. Through bilateral negotiations, the federal government would ensure that those provinces that have made more public investments to ensure access to prescription drugs are not disadvantaged.
More importantly, the committee proposes that the federal commitment be cast in stone. With health care, over the years Ottawa moved away from the original commitment of 50/50 cost-sharing, leaving the provinces to find the funds to meet Canadians’ expectations. Thus, ensuring the federal pipeline of funding will never shrink will be essential to seal any pharmacare deal.
Finally, it should be noted that the committee’s proposal could allow the provinces to preserve more of the status quo than meets the eye. As economist Aidan Hollis has proposed, a province could permit private insurers to stay intact if they pay a premium into a central pharmacare plan administered on a non-profit basis. As long as the copayments are kept at the minimal level required, this would not seem on its face to frustrate the general requirements of the proposed legislation.
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Most would agree that all Canadians should have insurance coverage for important prescription drugs. But while the health policy evidence points strongly to the benefits of public universal insurance for all, both in terms of fairness and overall cost-savings, there is enormous pressure to keep the current system – both from private insurers and drug companies and those ideologically opposed to a public plan. This echoes the birth of medicare in the 1950s. At the time, both the premier of Alberta, Ernest Manning, and Premier W.A.C. Bennett of British Columbia were ideologically in favour of a multi-payer system and looked to subsidize the purchase of private health insurance and regulate that market rather than embrace a single-payer system.
In today’s context, there has been pressure on the committee to propose some form of the Quebec take on universal pharmacare, which involves a mandate to buy private health insurance and a mop-up public plan for everyone else. But with high costs and continuing access problems, this model has not garnered many fans beyond the drug and insurance industries.
Hoskins and the committee are to be congratulated for delivering a clear vision for national pharmacare but distinguishing it from medicare in important and appropriate ways. But as history has shown us, the path to implementation of national pharmacare will likely be as rocky as it was for medicare. Private insurance and drug companies will steel themselves for the real battle to thwart implementation for as long as possible. They’ve succeeded over the last 55 years, and a timeline of eight years for implementation will, unfortunately, give ample opportunity for derailment.
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