Pharmacare plan would save Canadians money
The debate about drug prices has been roiling for years in Canada and has reached a fever pitch of late.
On Dec. 1, Ottawa proposed changes to drug price regulations in Canada that it estimates will deliver
$12.6 billion in savings over 10 years through lower drug costs.
Canadians spend too much on drugs, but not just for the reasons you think. Pharmaceutical firms should not shoulder sole blame for the increase. We need to broaden the discussion to one of drug “spend,” not just drug prices.
Drug prices typically increase on an annual basis, and the prices of some drugs are much higher in Canada than in other countries. Generics for example, are costlier in Canada than in the U.S., while brand name drug prices are often lower in Canada.
Price disparity from country to country can be attributed to several factors, including supply and demand, direct-to-consumer advertising, litigation, the number of suppliers and economic policies to incentivize pharma R&D.
However, the amount we spend on drugs has a strong behavioural component for consumers, physicians, pharmacists, employers, unions, politicians and legislators.
A higher price tag does not always indicate a superior drug. For example, the current standard of care for a rare congenital condition called neonatal-onset multisystem inflammatory disease (NOMID) is a $96,000 specialty drug. Recently, a $17,000 specialty drug received approval to treat NOMID; our expert panel recommended that it is a good alternative, since it can be used to treat infants earlier, patients respond rapidly and it is much less expensive.
Many companies, and most publicsector employers and unions, have drug plans with 100 per cent coverage. This means that they will cover any drug at any price. This can create an environment of complacency, with no incentive for people to consider less expensive but equally effective alternatives.
Plans should cover a more expensive drug only if it is the most effective option backed by research. Otherwise, people should be empowered to consider the less expensive alternative. Generic drugs have the same active ingredients as brand name drugs, and work the same way in the body, and save Canadians a huge amount of money.
Consumers can change their behaviour by becoming informed and empowered. The incentive is having a system that can continue to afford to fund drugs for the population.
Prescribers can and should recognize that there may be less expensive alternatives. Employers and unions should take a more collaborative position. They are often deaf to the position that having a drug plan that recommends less expensive drugs can improve health and financial outcomes.
The dilemma around pharmacare is that some people (such as government employees and publicsector unions) have 100 per cent coverage of every drug, while others have nothing and no insurance. A national pharmacare plan would mean every Canadian would be on one single, national list of drugs. Every Canadian would be covered by one drug plan, and that the plan would cover those drugs that work most effectively, backed by evidence.
In other words, any such formulary should dictate which drugs would be paid for. The plan could be administered by one organization and have enough leverage ($30 billion worth) with pharmaceutical companies and pharmacies to address drug prices. Consumers would still be able to get access to higher priced drugs not on the formulary, but they would have to pay out of pocket. The question is, are we ready for that?
Helen Stevenson is a former Ontario assistant deputy minister of health. She founded Reformulary Group, whose products help make drug plans sustainable.