Why New Brunswick has to rethink pharmacare

By Steve Morgan

A version of this commentary appeared in the New-Brunswick Telegraph Journal and the CD Howe Institute

SteveMorgan_NewBrunswickpharma_000021513689SmallNew Brunswick is the only province that does not ensure that all citizens are insured, at a minimum, against catastrophic prescription drug costs. For this, the government has received a considerable amount of flack. Unfortunately, the pharmacare systems in other provinces across the country are hardly lofty comparisons.

Every developed country with a universal healthcare system provides universal coverage of prescription drugs… except Canada. Instead, Canadian provinces offer limited public subsidies for prescription drugs for those with the highest needs or those with the lowest incomes, New Brunswick included.

But no province in Canada funds even as much as 50% of the total cost of prescription drugs consumed by its citizens. This leaves an extraordinarily high percentage of prescription drug costs in Canada to be paid for directly by patients or through private insurance, for those lucky enough to have it.

In a paper published this week by the C.D. Howe Institute, my colleagues and I review the performance of Canadian pharmacare models against systems in comparable countries around the world. We find that the most costly, inequitable, and inefficient systems for financing prescription drugs are those that diminish pharmaceutical purchasing power, impose considerable charges for drugs on patients and isolate the management of prescription drugs from other key components of the healthcare system.

This is not good news for Canada.  The individual “pharmacare” systems in each of our provinces do all of these things.

It’s not good news for New Brunswick either because what appear to be the two competing options for reforming the New Brunswick Prescription Drug Program do not necessarily represent progress toward a more equitable and efficient system.

The model that many New Brunswickers believe is right for the province – universal public coverage against only catastrophic drug costs – turns out to be one of the least effective ways of financing prescription drugs. Such a model, exemplified by the system in British Columbia, results in poor access to medicines, provides limited protection against the financial consequences of ill health, and diminishes the government’s capacity to control pharmaceutical expenditures.

On the other hand, the model recently proposed by the government of New Brunswick – compulsory insurance based on a private insurance model of drug coverage – is no better. Exemplified by the system in Québec, such a model will improve access to medicines, making it better than the catastrophic coverage model in this regard.  But a system involving insurance-like premiums, deductibles and co-insurance still imposes notable costs on people with chronic medical needs.

Worse yet, financing medicines through a multi-payer system that is isolated from the financing of medical and hospital care reduces administrative efficiency, diminishes purchasing power and creates a “silo mentality” in system management. All of this creates waste that can and should be avoided.

It is time to rethink pharmacare.

Ultimately, the challenge for governments in Canada is to find a way to integrate prescription drugs into our otherwise public healthcare system. The goal would be for decision-makers and healthcare professionals to see prescription drugs as an integral component of overall healthcare. Such a mind-frame would encourage use of medicines where cost-effective, and discourage use when other forms of care would be better, safer and cheaper.

Achieving these goals will not be easy but is becoming evermore imperative.

For New Brunswick, a way forward is to build its compulsory insurance program entirely within government. This would achieve key goals of increased buying power and better integration with the healthcare system.

This new public drug plan would ideally focus medicines of known value-for-money from a health system perspective – drugs that, when used appropriately, unquestionably improve patient health and save money elsewhere in the health care system. And, like medicare more generally, it would ideally provide access to such medicines at little or no cost to patients.

Evidence from comparable countries worldwide shows that such a universal pharmacare program would promote access to necessary medicines, protect people from the financial burden of medical needs and reduce total spending on prescription drugs. It would be a win, win, win for the citizens of New Brunswick.

Steve Morgan is an expert advisor with EvidenceNetwork.ca and Associate Professor and Associate Director at the UBC Centre for Health Services and Policy Research.

June 2013

This Commentary is from Commentaries, Pharmaceutical Policy.

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