Call it What­ever You Want, but the Time has Come for Na­tional Phar­ma­care in Canada

Policy - - In This Issue - Alan­nah McBride and Ran­dall Bartlett

Canada is the only G7 coun­try that pro­vides univer­sal health care but not univer­sal drug cov­er­age. In its 2018 bud­get, the Trudeau gov­ern­ment un­veiled an Ad­vi­sory Coun­cil on the Im­ple­men­ta­tion of Na­tional Phar­ma­care to re­port in spring, 2019. As Alan­nah McBride and Ran­dall Bartlett write, there is al­ready no short­age of ma­te­rial from which to glean es­ti­mates on the costs and per­mu­ta­tions of a na­tional drug cov­er­age scheme.

Is Canada go­ing to adopt a na­tional phar­ma­care pro­gram? While you wouldn’t be blamed for hav­ing been left with that im­pres­sion af­ter pe­rus­ing Bud­get 2018, Fi­nance Min­is­ter Bill Morneau was quick to re-la­bel any po­ten­tial phar­ma­care plan as, in fact, a strat­egy. If noth­ing else, this cer­tainly points to the fact that se­man­tics re­main alive and well in Ot­tawa. To ad­vise on that strat­egy, the Ad­vi­sory Coun­cil on the Im­ple­men­ta­tion of Na­tional Phar­ma­care, led by On­tario’s for­mer health min­is­ter Eric Hoskins, has been struck to ex­plore what fill­ing these cov­er­age gaps might look like.

What does the cur­rent land­scape for pre­scrip­tion drug cov­er­age in Canada look like and what does this mean for the rel­e­vance of any na­tional phar­ma­care strat­egy? Ac­cord­ing to the Cana­dian Life and Health In­sur­ance As­so­ci­a­tion, as of 2015, an es­ti­mated 70.5 per cent of Cana­di­ans are pri­vately cov­ered through em­ployer-pro­vided plans, which spent the lion’s share of their cov­er­age on phar­ma­ceu­ti­cals. So, what about the rest of Cana­di­ans? Much as Morneau de­scribed it, there’s a patch­work of pro­grams across Canada that cover cer­tain groups and not oth­ers. This type of sys­tem evolved be­cause the Canada Health Act only in­cluded drug cov­er­age un­der hos­pi­tal ser­vices. How­ever, prov­inces and ter­ri­to­ries have taken it upon them­selves to cre­ate a range of cov­er­age plans to fill the gaps in the pri­vate drug in­sur­ance land­scape. And it is into this hodge podge of dif­fer­ent sys­tems that the fed­eral gov­ern­ment has in­serted the newly-minted Ad­vi­sory Coun­cil.

As an ex­am­ple, in On­tario there’s the On­tario Drug Ben­e­fit (ODB). The ODB au­to­mat­i­cally cov­ers any­one 65 and over, and ex­tends to a few other groups of peo­ple in­clud­ing: those liv­ing in long-term care fa­cil­i­ties and en­rolled in home care; peo­ple en­rolled in On­tario Works and On­tario Dis­abil­ity Sup­port Pro­gram; and peo­ple who pay more than 3 per cent of their af­ter-tax in­comes to­wards pre­scrip­tions. This ben­e­fit was re­cently ex­panded to en­com­pass On­tar­i­ans un­der the age of 25, known as OHIP+.

No­tably, the ODB doesn’t al­ways pay 100 per cent of drug costs, as there are some­times small de­ductibles (amount the in­di­vid­ual has to pay out-of-pocket over a year be­fore cov­er­age be­gins) and co-pay­ments (amount the in­di­vid­ual has to pay per pre­scrip­tion) de­pend­ing on the group and in­come level that the in­di­vid­ual falls un­der. For peo­ple aged 65 and older, the ODB has two dif­fer­ent po­ten­tial cost­shar­ing mech­a­nisms: co-pay­ments and de­ductibles.

There is no de­ductible for lower in­come se­niors and for higher in­come sin­gle se­niors the de­ductible is $100. For the higher in­come se­niors, the co-pay­ment is no more than $6.11 per pre­scrip­tion and no more than $2 for any other de­mo­graphic cov­ered un­der the ODB. This may seem rea­son­able enough. How­ever, some stud­ies have shown that any co­pay­ment or de­ductible at all af­fects whether or not some­one ac­tu­ally fills their pre­scrip­tion. In con­trast, there are no co-pay­ments or de­ductibles for OHIP+. This new pro­gram cov­ers more than 4,400 drugs (the On­tario for­mu­lary) and is billed be­fore pri­vate in­sur­ers are. These kinds of de­tails change how the sys­tem is used and may there­fore im­pact the health out­comes of Cana­di­ans.

Other prov­inces have var­i­ous types of phar­ma­ceu­ti­cal cov­er­age as well. Bri­tish Columbia, for in­stance, has what they call Phar­ma­Care, which pro­vides cov­er­age to fam­i­lies and in­di­vid­u­als based on their in­comes. It also cov­ers var­i­ous other groups, such as re­cip­i­ents of B.C In­come As­sis­tance,

res­i­dents of li­censed res­i­den­tial care fa­cil­i­ties and peo­ple liv­ing with cys­tic fi­bro­sis, among oth­ers.

These sys­tems ob­vi­ously let some Cana­di­ans fall through the cracks. Ac­cord­ing to a 2017 re­port by the Par­lia­men­tary Bud­get Of­fi­cer (PBO), who es­ti­mated the cost of a na­tional phar­ma­care pro­gram, 17 per cent of all drug ex­pen­di­tures are paid outof-pocket by in­di­vid­u­als. No­tably, res­i­dents of B.C. and Man­i­toba pay a larger pro­por­tion of out-of-pocket spend­ing com­pared to other prov­inces, at about 25 per cent. From the same re­port, an es­ti­mated 2 per cent of Cana­di­ans don’t have any drug in­sur­ance at all and an­other 10 per cent of Cana­di­ans have drug cov­er­age but still lack the fi­nan­cial abil­ity to pay for their pre­scrip­tions.

Hav­ing a health care sys­tem, as we do in Canada, that is meant to fa­cil­i­tate ac­cess to health ser­vices with­out fi­nan­cial bar­ri­ers but is lack­ing an in­clu­sive drug cov­er­age pro­gram seems prob­lem­atic. There are many aca­demic pa­pers which es­ti­mate the health ef­fects of hav­ing drug cov­er­age ver­sus no cov­er­age. Many find that so­cioe­co­nomic sta­tus played a large role in pre­dict­ing death and se­vere med­i­cal con­di­tions, par­tic­u­larly for in­di­vid­u­als un­der the age of 65 years. Be­yond age 65, the out­come gap closed some­what, pos­si­bly as a re­sult of more ready ac­cess to pub­lic drug cov­er­age and in­come sup­port across Canada.

Ac­cord­ing to the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD), Canada pays 17.5 per cent of the to­tal health spend­ing to­ward phar­ma­ceu­ti­cals, rank­ing us 14th among 31 OECD coun­tries in 2015. The PBO es­ti­mated the cost of a na­tional phar­ma­care pro­gram back in Septem­ber 2017. The re­port used the Que­bec for­mu­lary to es­ti­mate that a na­tional phar­ma­care pro­gram would have had a net cost of $19.3 bil­lion in the 2015-16 fis­cal year. This is $4.2 bil­lion less than the over­all cost of the cur­rent sys­tem to var­i­ous gov­ern­ments, pri­vate in­sur­ers, and in­di­vid­u­als. Gross phar­ma­care ex­pen­di­tures are shown in Fig­ure 1. By the 202021 fis­cal year, the PBO fore­casted to­tal gross ex­pen­di­tures on phar­ma­ceu­ti­cals un­der a na­tional phar­ma­care pro­gram to be $23.7 bil­lion, well below the $27.9 bil­lion fore­casted with­out na­tional phar­ma­care.

How can such a mas­sive pro­gram cre­ate sav­ings? These sav­ings are in part as­so­ci­ated with lower out-of­pocket drug ex­pen­di­tures, which are es­ti­mated to de­crease by an av­er­age of 90 per cent. It’s also im­por­tant to keep in mind that these sav­ings are gar­nered by pa­tients and other lev­els of gov­ern­ment, and there­fore out­weigh the ad­di­tional cost borne the fed­eral gov­ern­ment.

But cost­ing a na­tional phar­ma­care pro­gram has been a hot topic for a few years now. In 2015, Steven Mor­gan and three coau­thors pub­lished an ar­ti­cle in the Cana­dian Med­i­cal As­so­ci­a­tion Jour­nal that es­ti­mated a re­duc­tion in spend­ing na­tion­ally on pre­scrip­tion drugs by an av­er­age of $7.3 bil­lion an­nu­ally with a na­tional phar­ma­care plan. Mean­while, the cost to gov­ern­ment was es­ti­mated to have in­creased by an av­er­age of $1 bil­lion each year.

Other than the ob­vi­ous bud­get deficit en­vi­ron­ments in many prov­inces, Mor­gan and his col­leagues men­tion

How can such a mas­sive pro­gram cre­ate sav­ings? These sav­ings are in part as­so­ci­ated with lower out-of-pocket drug ex­pen­di­tures, which are es­ti­mated to de­crease by an av­er­age of 90 per cent.

that much of the aver­sion to­ward a phar­ma­care pro­gram is based on the no­tion that it would re­quire large tax in­creases for Cana­di­ans. How­ever, their re­search sug­gests oth­er­wise. In­deed, a more eq­ui­table sys­tem may be achieved through bet­ter pric­ing of drugs, cost-con­scious­ness, and the ef­fi­cien­cies of a sin­gle-payer sys­tem, with very mod­est fis­cal im­pact. In­deed, phar­ma­care can de­crease ex­pen­di­tures and im­prove health out­comes, which can also gen­er­ate sav­ings for all of the provin­cial and ter­ri­to­rial health care sys­tems. But de­spite this fi­nan­cially mo­ti­vated ar­gu­ment, po­lit­i­cal will may be the road­block that Cana­di­ans face on the path to a na­tional phar­ma­care pro­gram.

That said, this is not the case for ev­ery gov­ern­ment in Canada. Specif­i­cally, Que­bec pro­vides its cit­i­zens with the Pub­lic Pre­scrip­tion Drug In­sur­ance Plan if they aren’t el­i­gi­ble for a pri­vate plan, usu­ally through em­ploy­ers. This phar­ma­care pro­gram has suc­ceeded in re­duc­ing in­equities. How­ever, some ex­perts have ques­tioned the fis­cal sus­tain­abil­ity of such a pro­gram. Ac­cord­ing to MariePas­cale Pomey and her co-au­thors, drug ex­pen­di­tures rose 286 per cent be­tween 1997 and 2005, which can be ex­plained by the in­crease in drugs cov­ered in the for­mu­lary as well as the av­er­age length of pre­scrip­tions. As well, Que­bec res­i­dents still faced high out-of-pocket ex­penses due to var­i­ous de­ductibles, co-in­sur­ance and pre­mium schemes.

Pre­scrip­tions that are left un­filled for fi­nan­cial rea­sons (known as “cost-re­lated non-ad­her­ence”) are preva­lent in Canada, ac­cord­ing to sev­eral em­pir­i­cal stud­ies. For in­stance, Michael Law and his col­leagues found that cost-re­lated non-ad­her­ence to drug treat­ment was four times as com­mon among Cana­di­ans who lacked drug in­sur­ance. In­deed, as many as one-third of low-in­come re­spon­dents with­out drug cov­er­age re­ported non­ad­her­ence.

A 2013 C.D Howe In­sti­tute re­port by Steven Mor­gan, Jamie Daw and Michael Law also presents the is­sue of ad­her­ence and its re­la­tion­ship to cov­er­age and cost. In Fig­ure 2, us­ing the Com­mon­wealth Fund 2010 In­ter­na­tional Health Pol­icy Sur­vey, they show that the United States has the high­est rate of cost-re­lated non­ad­her­ence, with the United King­dom as a com­par­i­son at a con­sid­er­ably lower rate. Us­ing the 2007 Canada Com­mu­nity Health Sur­vey, the au­thors sin­gle out Que­bec as the prov­ince within Canada with the low­est rate and also as the only prov­ince with univer­sal drug cov­er­age. In this same com­par­i­son, the au­thors high­light the high rate of cost-re­lated non­ad­her­ence in Aus­tralia, which has a univer­sal drug cov­er­age sys­tem with a high co-pay­ment. Their rate is no­tably higher than other coun­tries that have lower co-pay­ments, such as the UK and Nether­lands. As a re­sult, the cost bur­den on pa­tients re­duces their ad­her­ence to drug ther­apy that would oth­er­wise im­prove their health out­comes as well as re­duce costs else­where in the health care sys­tem.

The cost bur­den to ac­cess­ing needed phar­ma­ceu­ti­cal treat­ments con­tin­ues to re­main pro­hib­i­tively high for a large num­ber of Cana­di­ans. It’s time that we se­ri­ously con­sider leav­ing be­hind our la­bel as the only coun­try with a univer­sal health care sys­tem that ex­cludes drug cov­er­age. The Ad­vi­sory Coun­cil should there­fore be bold in ex­plor­ing the cur­rent patch­work en­vi­ron­ment, ex­am­in­ing in­ter­na­tional pro­grams, and, most of all, aim­ing to re­move the fi­nan­cial bar­ri­ers that pre­vent Cana­di­ans from liv­ing their health­i­est life. And whether Morneau de­cides to call it a plan or a strat­egy, he should plan to do some­thing that is trans­for­ma­tive for Cana­di­ans in more than name only.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.