So you should know about the pharmacare issue
Dr. Eric Hoskins and his Advisory Council on the Implementation of National Pharmacare (a creation of the Liberal government) have 60 recommendations for pharmacare.
“Currently our uneven, inconsistent and tenuous patchwork in no way resembles a system,” writes Dr. H. “We spent $34 billion annually in 2018 – more per person per year on prescription drugs than any other OECD [Organisation for Economic Co-operation and Development] country, with the exception of the United States and Switzerland.”
The council proposes a new agency which would hopefully (but unlikely) be arms-length from government, approving drugs and devices using: “rigorous, evidence-based methods” with “good value for money.” The agency would also provide: “advice and monitoring” and would involve all stakeholders including the usual suspects: pan-Canadian committees of this-and-that. Health Canada, the pan-Canadian Pharmaceutical Alliance, the Canadian Agency for Drugs and Technologies in Health, the Patented Medicine Prices Review Board, the Canadian Institutes of Health Research, Uncle Tom Cobley and all – all would be involved in a chummy bureaucratic merry-go-round.
The initial formulary would be a list of essential medicines covering half of prescriptions for major conditions beginning January 1, 2022, with full formulary by January 1, 2027. Surprisingly, the report recommends user fees (within strict limits): drugs on the essential medicines list would carry a co-payment of $2, while all other drugs would have $5 co-payments with certain groups not paying.
They also recommend the new Canadian drug agency “establish pathways” and “national expert panels” to work with patients and clinicians to determine which new expensive drugs and which rare-disease drugs should be funded for which patients. Funding for these should be in place along with the essential medicines list, beginning January 1, 2022. But, hey, we already have laborious review processes (e.g., for new cancer drugs), so this would be another bureaucratic step but, no sweat, the federal government would pay for the incremental cost of implementation.
“We have estimated it will cost an additional $3.5 billion in 2022 to launch national pharmacare starting with coverage for essential medicines. As the national formulary grows … annual incremental costs will reach $15.3 billion in 2027… by 2027 [Bingo], spending on prescription drugs would be $5 billion lower than it would be without national pharmacare.”
The council wants the five hallowed principles of Medicare in the Canada Health Act to be applied to NP: Universal, Comprehensive, Accessible, Portable and Public.
Big heartedly, they recommend NP be flexible for provinces to give coverage beyond national standards and that Canadians be allowed to purchase private insurance to supplement coverage, thereby continuing the very issues of “unfairness” which gave rise to the creation of this committee. They also tout the mantras of a “gender and equity lens” and “Indigenous engagement.” Despite adding another layer of bureaucracy, they expect a shortening of the time for approval of new drugs – well … dream on.
The national formulary would provide appropriate treatments for different age, race, ethnicity, sex, gender identity, children and youth (i.e., everybody, though babies are not mentioned). There would be mandatory generic and biosimilar substitution and “performance-based funding agreements” with manufacturers of rare-disease drugs, where: “the amount paid to the manufacturer depends on how well the drug works.” Easy.
They ask the federal government to invest in IT to ensure all governments have capacity for data collection (including from gender, diversity and equity perspectives) to address gaps in data and to support ongoing management of NP (no mention of the Phoenix payroll system – now over-budget forecasted to be $2.2 billion!). This would include “data systems” possibly using “blockchain technology” (wow, Bitcoins?).
Sensibly, the council recommends the federal government: “streamlines and modernizes its assessment of drug safety, quality and efficacy so patients have faster access to innovative medicines.”
Jack Mintz, University of Calgary economist and influential column writer, had a dry response to this enthusiastic document:
The advisory council chaired by Eric Hoskins, former Liberal health minister of Ontario, examined a single-payer national pharmacare program for Canada. The most important arguments are based on the ability of a pharmacare program to bend the cost curve by negotiating lower drug prices and to help a minority (no more than a tenth across income groups) who have difficulty coping with drug expenses.
The report’s estimated cost for pharmacare … has been criticized by financial experts. The Parliamentary Budget Office assumption that the federal government would negotiate an immediate 25% reduction in prices with international pharmaceutical companies (a $4.3-billion savings) … is highly improbable at least in the short term, and may not be achievable at all.
They also may have underestimated the growth in drug costs taking into account inflation, aging and the higher expenses of newly introduced drugs or medications to treat rare conditions. With these higher costs, the employer-employee combined payroll tax rates could be as high as 6%.
It’s one thing for the provinces to negotiate together to reduce drug prices but it’s another for a single body to dictate which drugs are listed, what generic drugs should substitute for brand drugs and how the cost should be covered by which tax.
The lack of specifics on financing and the inevitable haranguing with the provinces will likely mean that the Hoskins report will gather dust, like similar previous reports. Federal political parties might promise pharmacare but it is a dream unlikely to happen.
I agree with Professor Mintz’s critique – but the Liberals are determined folk.
My summary? A Canadian national formulary? – About time.
Attempts at national negotiating? – OK, we’ve been suggesting this for years.
But preserve us from yet another central agency.
Banner photo credit: Steve Buissinne, Pixabay.com