NATIONAL SUPER AGENCY TO HELP WITH DRUG COSTS.
EVALUATION AND NEGOTIATION COULD BE DONE BY A SINGLE ENTITY.
OTTAWA • After 50 years of calls for pharmacare for all, the Liberal government is taking the first modest steps toward a national prescription drug plan.
In the federal budget unveiled Tuesday, the Liberals are pledging $35 million toward the creation of a new national drug agency that would act as a single negotiator for new prescription drug prices. The super drug agency would also be tasked with developing a national formulary — a list of essential drugs that should be available to all Canadians. In one of the government’s biggest new spending measures, the Liberals are promising $1 billion to help cover the often crushingly high cost of drugs for rare diseases.
But the budget was silent on the biggest question: Will a national pharmacare program be a single-payer plan, a “fill-in-the gaps” system, or a combination public/private scheme that’s far more industry friendly? Instead, the budget takes the first tentative steps by supporting recommendations in a skinny, eight-page interim report released earlier this month by a Liberal pharmacare advisory committee, headed by former Ontario health minister Dr. Eric Hoskins.
The Hoskins council’s final report, due later this spring, will recommend one specific model, which would presumably inform a federal pharmacare strategy, the details of which the Liberals will likely leave for the campaign trail.
Canadians now pay some of the highest drug prices in the world. Between 2006 and 2017, the number of patented medicines costing $10,000 or more per year more than tripled, and now account for more than 40 per cent of patented medicine sales, compared to eight per cent in 2006.
Prescription drug spending in Canada ballooned from $2.6 billion in 1985 to $33.7 billion in 2018. The system, Hoskins has warned, is near the breaking point. More aggressive buying power could lower the cost of prescription medicines by up to $3 billion per year, according to government estimates. Drugs for rare diseases are even more exorbitant, often exceeding $100,000 or more per year. One in 12 Canadians — two thirds of them children — suffer from a rare disease. Only 60 per cent of treatments for rare disorders make it into Canada; most get approved up to six years later than in the U.S. and Europe.
The Liberals say they would spend up to $1 billion over two years, starting in 2022, with up to $500 million per year ongoing, to help Canadians with rare diseases pay for the drugs they need.
The new drug agency, working with the provinces and territories, would assess the effectiveness of new drugs, negotiate prices and harmonize which drugs are covered across Canada.
“For the first time in Canada, drug evaluation and price negotiation could be carried out by a single entity,” the budget document reads.
The Liberals are promising $35 million over four years, beginning this year, to establish a transition office “to get us from here to there,” Finance Minister Bill Morneau told reporters Tuesday.
“We’re going to be talking about the efficacy of drugs, the cost effectiveness and how we can negotiate to have a formulary that makes sense,” Morneau said.
Canada’s public and private insurance drug plans — the country has a patchwork of more than 100,000 — leave many people with little, or zero coverage. Nearly a million Canadians give up food or heat so they can afford prescription drugs.
There have been repeated calls for a single-payer public system. But pharmaceutical companies and private insurers stand to lose billions.
Whether the Liberals ultimately support a single payer system, “there are strong forces on either side,” said David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives.
“The private industry would not be all that happy with it, in the sense that it’s business for them to mark up these programs at a profit and sell them to Canadians,” Macdonald said.
However, it might not be a loss for the industry in the long run, he said. Private insurance for drugs will continue. No national formulary is going to cover “every single drug ever made”, he said. Rather, it would cover the most common, and most effective ones.