Pharmacare: nice idea in theory, but ...

Canada is the only country in the world with universal health care but no national pharmacare program, meaning that the majority of prescription drug purchases are either made through private insurers or out-of-pocket. The rest are paid for by a disjointed patchwork of provincial drug plans, mostly for the poor and the elderly. As a result, critics argue, we’re overpaying for prescription drugs.

Indeed, several provinces have tried to rein in drug costs by setting limits on the price they will pay for generic drugs compared to their brand-name equivalents. In 2013, nine provinces agreed to cap the price paid for the generic versions of six common pre- scription drugs to 18% of the brandname version. Yet in the absence of a national approach, it is claimed, we forfeit bulk negotiating power.

Recently, a study published in the Canadian Medical Association Journal suggested that the way forward might be for Canada to adopt a national pharmacare program. The study submits that bulk-purchasing through a single-payer system would afford Canadians greater negotiating power in global markets. Against the argument that a universal pharmacare program would require substantial tax increases, the study’s authors found it could actually save $7.3 bil- lion annually. “Universal coverage of prescription drugs,” they concluded “can achieve access and equity goals while also achieving considerable economies of scale.”

The proposal is worthy of consideration, and not only for the potential savings to the taxpayer. A 2012 study published in the CMAJ found that the costs of out-of-pocket prescription meant about one in 10 Canadians did not fill prescriptions as required, did not renew prescriptions, or tried to make prescriptions last longer. This type of non-adherence can lead to further complications, landing patients in hospital (thus costing the system more) and contributing to the threat of antibiotic-resistant bacteria.

Still, there are reasons to be skeptical. As health policy analyst (and emergency room physician) Brett Belchetz pointed out in these pages recently, the countries the study cites as a model for a Canadian pharmacare program, though they provide universal coverage, all include some sort of private health care alternative, lessening the financial burden of universal care on governments and freeing up funds for a public drug program. The estimates, he noted, also do not take into account the inevitable effect on demand of fixing the price of prescription drugs at zero. Dr. Belchetz contends we must fix the problems with the current health care system before we take on a complex additional responsibility.

Such caution is in order. The efficiency gains from bulk purchasing, as much as universal coverage, were at the heart of the claims made for medicare when it was first introduced. To say the least, these have proved elusive. This is the central issue in the emerging pharmacare debate: how to weight the theoretical advantages of pharmacare against the practical reality that governments tend to make a costly mess of these things.

The efficiency gains from bulk purchasing were at the heart of the claims made for medicare when it was first introduced