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February 19, 2019

Better Access with National Pharmacare: Reality or Illusion?

Through a panel discussion featuring local Canadian Pharma experts, we explored the implications of a national pharmacare program and how it could impact citizens, patients and the pharmaceutical industry.

Opening Remarks and Housekeeping -   Rana Salamé, Andrew Merola, PMCQ Board Members

  • The next PMCQ event: Boosting Launch Trajectory: Lessons from 40 product launches
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  • Thank you to GLG Communications for doing the creative for this event and Merck Canada Inc. for their sponsorship of the event.

Introduction of Speakers -   Evelyn Deros, PMCQ Director

The meeting featured a panel of experts:

  • Bill Dempster from 3Sixty Public Affairs Inc. was our moderator.
  • Brett Skinner from the Canadian Health Policy Institute was our analyst.
  • Jennifer Chan from Merck Canada Inc. was our industry representative.
  • Louise Binder from Save your Skin Foundation was our patient representative.

National Pharmacare Overview -   Bill Dempster

  • The federal government is facing unprecedented pressure in terms of commercialization of launching products and keeping social programs sustainable and affordable. Long-term health and social system considerations include an aging population and a shrinking tax base, as baby boomers are now entering their seventies.
  • For the first time ever last year, Canada started spending more than a quarter of a trillion dollars on health, according to the Canadian Institute for Health Information (CIHI). The forecasted spending is $253 billion dollars. The growth is 4.2% over the year before. Growth has been increasing gradually over previous years.
  • In comparison, the economy is growing more slowly. The Canadian GDP forecast growth for last year was 2%. The growth forecast is expected to be less than 2% in 2019, while healthcare spending growth is growing faster than that.
  • Canada spends 11.3% of our total GDP per year on health, which puts Canada around the middle of other OACD countries. The USA is closer to 18%.
  • Governments look at where money is being spent in terms of categories. For the last 40 years, hospitals have been by far the most expensive category (around 30%, although declining a little bit); drugs and physicians compete for second place and have each been around 15-16%.
  • According to CIHI, the cost growth of per person use of drugs has been outpacing hospitals and physicians. This includes all kinds of drugs, including OTC products, but the growth is probably underestimated because drugs taken in hospitals still falls under the hospital category. Drug spending is only growing at 3.2% per year, which is small compared to its historical growth trend.
  • Governments are trying to contain their spending at around 3%. At the same time, the current Trudeau government has a very aggressive agenda: they want to implement national pharmacare, move forward on price controls for patented medicines, and reform the Patented Medicines Pricing Review Board (PMPRB). The federal government wants to grow the life sciences industry and double it by 2025, while also implementing national pharmacare, which will be mainly focused on cost containment.
  • Healthcare is actually under provincial jurisdiction.
    • Quebec and Ontario do not want to take on more costs and they want to retain the responsibility of the design and delivery of healthcare and public drug coverage. The Quebec government will most likely opt out of a national pharmacare program — it is expected the government will ask for the money and implement its own system.
    • Western Canada wants to be sent money for national pharmacare but maintain control of its design and delivery.
    • The Atlantic provinces, which don’t have much money, want more money and are willing to give up a little bit of control, as long as the money promised keeps coming. (When the Canada Health Act came into effect in 1984, the original aim was that 50% of all provincial health spending would be provided by the federal government. Right now, it is closer to 20%.)
  • There are lessons to be learned from Ontario’s OHIP Plus: many patients fell through the cracks when they had to transition onto a public drug plan. The public drug plan had 4,400 medicines listed and was inferior to the private plans it displaced, which had closer to 13,000 medicines listed.
  • In October 2015, the federal Liberal government took control of Parliament and was working with mostly Liberal provincial governments, but provincial governments have since changed and there is less cooperation with the federal government.
  • For patients who rely on public help to get drugs, it can take two years from the time that a drug gets Health Canada approval. It is faster for patients on private plans.
  • The media generally supports national pharmacare, but no one has a coherent plan on how to implement a single-payer system. There are two main approaches: 1) the Colleen Flood model proposes to extend the Canada Health Act to create a Canadian Pharmaceutical Act that would that would get the federal government to send money to the provinces; 2) Marc-André Gagnon and the NDP propose starting with a medicines list with 137 medicines covered.
  • Everyone is waiting for the Hoskins Council, which is the federal advisory council on implementation of national pharmacare. Dr. Eric Hoskins was appointed by the federal government to form a council and report back in 2019 on how to implement this program. It has been hinted that the report will come as early as March 2019.  
  • The most probable outcome of a national pharmacare program is a “fill the gap” approach, in which the few Canadians who are not covered privately will pay a premium to access a provincial plan.

Societal Impact -   Brett Skinner

  • National pharmacare is not necessary for patients and is unaffordable for taxpayers, but, unfortunately, the policy discussion has been very misinformed by several myths.
  • Advocates argue that national pharmacare is needed because millions of Canadians don’t have drug insurance. This is one of the fundamental rationales offered for the program. In fact, every jurisdiction in Canada, federal and provincial, has public safety net programs that cover high drug costs for people who don’t have a private drug plan and who are not eligible for regular benefits under a public drug plan due to their age status, income or aboriginal status. Eligibility for these safety net programs is based on income-adjusted deductibles, co-payments and premiums, but every Canadian is eligible for coverage. Data show of the 36.3 million people who lived in Canada in the year 2016, 23.2 million people were covered under private drug plans. The remaining 13.1 million people had either regular public drug benefits by status or were otherwise eligible for safety net coverage under public drug plans. National pharmacare is not needed because all Canadians are already covered by other plans.
  • Another myth is that national pharmacare is necessary because millions of Canadians give up basic necessities like food and heat to afford their medications. The data show that most people do not have high enough out-of-pocket drug costs to make claims against safety net drug programs. In 2016, average out-of-pocket spending ranged from just under $400/yr for the lowest-income households to just over $1,200/yr for the highest-income households. Out-of-pocket prescription drug costs range from 3% of income to the poorest households down to 0% of income for the wealthiest households. People at all income levels had out-of-pocket prescription drug costs that were affordable relative to discretionary expenses; for example, household expenditure on alcohol and tobacco was higher than out-of-pocket expenditure on prescription drug costs at all income levels.
  • Advocates also assume that national pharmacare will provide everyone with the prescription drugs that they need, but national pharmacare’s formulary will be purposely modelled on existing public drug plans. Public drug plans that exist now tend to ration access to medicines. Ontario’s public drug plan covers only a fraction of the 12,000 drugs covered by Canada’s private plans. Coverage for innovative, new medicines or patented drugs is especially restricted under public drug plans; from 2008–2017, Health Canada approved 479 new drugs, and as of June 30, 2018, 419 were covered by one or more private drug plans. By comparison, only 218 drugs were covered by one or more public plans. Additionally, private plans took a much shorter period of time to cover new drugs — only 142 days compared to 449 days for public drug plans.
  • A national pharmacare program would merely duplicate existing drug coverage, reduce access for people who now have a private drug plan, and not improve access for people covered under public plans.
  • Finally, advocates argue that the program will save money, but the Parliamentary Budget Officer estimated that these so-called savings were estimated from formulary restrictions, mandatory generic substitutions, discounted pricing and patient co-payments that are built into the national pharmacare model — from a patient perspective, most of these savings are “rationing” by another name. The fact is, under national pharmacare, the federal government will assume responsibility for drug expenditures that are now paid for privately or by provincial drug plans. The Parliamentary Budget Officer calculated that national pharmacare would shift over 19.3 billion dollars annually in its first year onto the federal budget and would impose over 7.3 billion dollars per year in additional costs for taxpayers. There is no doubt that national pharmacare would be paid for by higher taxes. The former Parliamentary Budget Officer recently suggested increasing sales taxes to fund national pharmacare. The government has already signalled that employers will subsidize the program and employees will also have to pay more.
  • If the government believes that out-of-pocket drug costs are too high, then it is much easier to lower deductibles, co-payments and premiums than it is to force all Canadians into a national pharmacare program.
  • The most significant reason why some Canadians cannot afford their medications is that many new drugs are not covered at all under existing public plans. The patients who are prescribed these drugs must pay 100% of the cost out of pocket if they wish to use these products.

Industry Perspective -   Jennifer Chan

Merck believes in 3 core principles for the development of any national pharmacare program:

  • The overall model of the system: There are just 1.8% of Canadians who do not have public or private drug insurance and they are located in Ontario and Newfoundland. If we’re thinking about targeted solutions that will actually improve access, universal drug coverage could be achieved by encouraging more enrolment in the existing system. Ontario and Newfoundland could open their plans to provide more coverage. In Quebec, there is already a good system that mandates enrolment for everyone into either public or private plans. Keeping the current system would allow those who have private coverage to keep their coverage, which they are quite happy with. To shorten the long reimbursement timeline for public coverage, another recommendation could be to create a comprehensive national formulary to serve as guidance for which medicines should be covered by all public and private plans across Canada. This would help address the inconsistency and inequalities that exist in access.
  • Adequate long-term funding and policies for timely access to medicines: Canada needs to meet the needs of the aging population. Merck recommends that the federal government increase the Canada health transfer so that it rises annually to meet the needs of patients. This increase would need to be higher than the current 3% escalator. Without significant increases in funding, the provinces and territories won’t be able to keep up. As a result, patients will suffer.
  • The impact of the federal drug pricing reforms that are currently being proposed through the PMPRB: The discussion of the PMPRB reform and national pharmacare should not be conducted separately because if the reforms move forward as proposed, the availability of medicines needed to cover patients under pharmacare will be negatively impacted. This will occur because the reforms, as currently proposed, will cause Canada to lose its status as a tier 1 launch country, meaning that launches of new medicines will be significantly delayed and, in some cases, not launched at all. In addition, the number of clinical studies will be impacted, which will deprive Canadians of early access to new therapies and will also cut an important source of funding to research hospitals and institutes.  

Patient Perspective -   Louise Binder

  • The current Liberal federal government does not have a vision for what it wants to do about healthcare; it says it is focusing on affordability, accessibility, and appropriate prescribing.
    • Affordability: The government believes healthcare can become more affordable through PMPRB reforms, which will lower drug prices and make national pharmacare possible; however, lowering entry level prices of drugs will not lower the ultimate cost to Canadians — it will simply leave less negotiating room and it will not enhance access to drugs.
    • Accessibility: The government believes that accessibility can be improved by aligning the work that Health Canada and health technology assessment agencies do (i.e., analysing the clinical data), but the only improvement that is likely is that decisions might get made a little faster because CADTH won’t have to look at clinical data a second time.
    • Appropriate prescribing: The most the government can do is set up some good national guidelines, but they’re not doing that, and this won’t really help that much with creating a sustainable national pharmacare.
  • Patients want timely, consistent, equal and equitable access to safe and effective therapies, including treatments and medications, as well as the information, diagnostics, care and support that they need, without conditions.
    • Equal: Not everyone will get the same treatment across the country. This is especially true for oral cancer drugs.
    • Equitable: If there is more than one treatment available, but not all treatments are covered, a patient with resistance or tolerance issues may not be able to access the treatment that that particular individual needs.
    • Ease of navigation in the system: There are people who are theoretically eligible for public coverage, but they cannot pay their deductibles. Programs are also all opt-in, with several forms. Most people of lower social economic status are not filling out these forms, and there are many people who don’t speak English.
    • Eligibility: There are some age and economic restrictions.
    • Economics: Each province’s economic situation is different.
  • There will be a federal election this year. This government currently has many problems. They need something the electorate might like, so they are focusing on pharmacare. Everyone in Canada is buying into the idea of pharmacare without asking for more details. Patients do not want and do not need a whole new government system. What is needed is to fill the gaps.

 

Justine Garner
Freelance Medical Writer
Cell: (514) 605-5109
Courriel: jgarnerwriting@gmail.com
www.jgarnerwriting.com

Upcoming meeting

May 21, 2019

Focus the Way Forward: Agents of Change

Cocktails: 5:30 pm
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Presentation: 7:00 pm

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