System is flawed

The poorest one-fifth of households spend more than one per cent of their incomes on drugs, on average; those with chronic illnesses can pay more than five or even 10 per cent. Unsurprisingly, many are forced to skimp on their drug purchases, often with consequences for their health, and subsequent higher costs to the health care system: as much as $9 billion annually, according to one study.

With so many plans (there are more than 70 public plans, and thousands of private ones) and such wide differences in the range of drugs they cover, it is easy to see how some people, and some drugs, might fall into the cracks. And with less than 43 per cent of the market, the collective purchasing initiative among the provinces, lately joined by the federal government, known as the pan-Canadian Pharmaceutical Alliance, has achieved only limited success in negotiating price reductions with manufacturers.

The system, in short, resembles the deeply flawed U.S. health care system in many ways, particularly in its emphasis on employers as the delivery vehicle. We are indeed one of the few countries with a universal medical insurance plan that does not cover prescription drugs. Or rather, as with most things to do with Canadian health care, it does cover drugs — so long as they are purchased in-hospital. Given the importance now attached to getting patients out of high-cost hospitals, this is especially silly.

In a perfect world, consolidating the lot, private and public, under a single federal plan, with a common formulary, universal coverage, and massive bargaining power, would make a lot of sense. The committee cites a study by the Parliamentary Budget Officer estimating total savings in the neighbourhood of $4 billion, albeit at the cost of raising public spending by a net $7 billion. In the world as it is, however, an Obamacarestyle kludge, closing the gaps in the existing plan might be more feasible — as the finance minister, among others, has suggested.

As in the U.S., single-payer advocates will find it is not an easy matter to shutter a $10-billion private industry, particularly as the private plans tend to be superior in coverage to the public plans: current beneficiaries may not be keen to have that taken away from them.

Likewise, while it would be reasonable for the provinces to hand off responsibility to the feds, the provinces are not known for their reasonableness when it comes to defending their turf. Even the more limited model the committee envisages, with the feds bribing the provinces to expand their plans, would likely have to exclude Quebec.

It’s not clear that substantial savings could not be realized under the existing system: by including private insurers in the public bulkpurchase initiative; by making greater use of generic or over-the-counter drugs; by setting pharmaceutical prices based on their actual therapeutic benefit, rather than what manufacturers ask for.

Perhaps these would be more likely under a singlepayer plan, federal or provincial, but you will excuse me if I am concerned the people who brought you the e-Health and Phoenix fiascos might find managing 36 million prescription drug histories a little beyond them.