A platform the grits might want to lift

The NDP have been derided as “Liberals in a hurry,” but who can blame them? If they don’t rush to market with their most ingenious ideas, the Liberals purloin them.

New Democratic Leader Jagmeet Singh unveiled his party’s budget proposals at a press conference Tuesday, with a call to close tax loopholes for the “super-rich” and dedicate the savings to implement a universal pharmacare program.

The NDP had the proposal in their last election platform but it’s fair to say it was submerged by the universal day-care plan.

This time it looks as if Singh will go full throttle on cheaper drugs.

The risk, of course, is that the Liberals will call his bluff and actually implement the NDP recommendation.

“I’m concerned about making people’s lives better. And if we push and achieve that result, that would be an amazing thing for people,” he said — though obviously it would not be an amazing thing for Singh or his party.

But he may have tapped into something — the public mood seems primed for changes to the way Canadians pay for prescription drugs that rise in price by about five per cent annually.

It’s estimated that up to one in five families struggle to pay for drugs, and Singh talked about seniors cutting their pills in two.

Canada is alone in having a public health care system that does not have a parallel public pharma plan.

The House of Commons health committee is set to release a major report on pharmacare next month, which sources suggest will recommend folding prescription drugs into a negotiated national formulary. Through an amendment to the Canada Health Act this would allow the provinces to administer the newly expanded coverage.

But as with all such grandiose designs, it all comes back to who pays?

Since companies that provide health insurance would no longer be on the hook, one idea is to implement a corporate tax, with businesses paying premiums to the government that they used to pay to insurance companies.

If that sounds unlikely, that’s because it is.

But the soaring cost of employee drug plans may make the corporate sector more sympathetic than might be imagined. Don Davies, the NDP’s health critic, said he’s never seen such broad stakeholder support, even from employers, because drugs are increasingly expensive.

He said a national pharma plan offers the prospect of savings that might lower the bill for everyone.

The Parliamentary Budget Office was asked to run the numbers by the health committee and concluded a national plan could save 25 per cent off list prices — or $4.2 billion a year — thanks to the leverage offered by bulk-buying drugs.

The PBO based its assumptions on Quebec’s formulary (the list of drugs covered by insurance) and added the revenue from a $5 co-pay dispensing fee for brand-name drugs.

The budget office concluded that drug costs eligible for a national pharma plan totalled $24.6 billion in 2015/16. Of that, $11.9 billion was covered by government insurance, $9 billion by private insurance plans and $3.6 billion from the pockets of individuals.

The PBO estimated the additional cost to the public sector of absorbing private plans and individuals’ out-of-pocket expenses would be $7.3 billion — double what the NDP said would be raised by closing tax loopholes and increasing the inclusion rate on capital gains.

So the plan is expensive.

Marilyn Gladu, the Conservative critic, said she is concerned about people with lack of insurance coverage but is worried about a wild disparity in cost estimates and is not in favour of raising taxes to pay for it.

The NDP, and perhaps the Liberals, are less troubled by the cost burden. It would be popular — out-of-pocket costs for Canadians would fall by up to 90 per cent, the PBO estimated.

And there is the prospect of clawing back premiums from businesses that would no longer have to cover their employees’ insurance premiums, deductibles and co-payments.

Peter Julian, the NDP finance critic, was asked about the prospect of the Liberals jumping on the pharmacare bandwagon.

He pointed out they had the chance some months back when Davies put forward a pharmacare motion, but they voted against it. “It would be wonderful if they did but I’d suggest it’s unlikely,” he said. I’m not so sure. The Liberals are currently embroiled in a spat with drug companies over their plans to lower the price ceilings on a range of drugs. Health Canada says this will reduce drug costs by $8.6 billion over a decade, while the industry says it will cost it $26 billion, with a subsequent loss of jobs, research and development and access to new products.

Justin Trudeau could run on this overhaul of the Patented Medicine Price Review Board in 2019. But it lacks the “wow” factor of a national plan. And Liberals love national plans.

The Grit health committee members are already enthused — MP John Oliver told a panel that he looks forward to knocking on doors in 2019, armed with a platform promise to launch national pharmacare within a year.

In the meantime, Singh’s NDP is in a hurry to associate its name with a plan to reduce the drug cost burden. But it seems a prime target for Liberal burglary. And if, once re-elected, they find they can’t afford it, then it can simply be discarded in the boneyard of broken promises.