Prescription drug costs hurting Canadians

By Danielle Martin and Steve Morgan

Why the public health system needs to evolve

A version of this commentary appeared in the Toronto Star, the Huffington Post and the Halifax Chronicle Herald

Prescription drug costs hurting Canadians

This week, Health Ministers from across Canada will gather in Banff to discuss issues of common interest and explore opportunities to work together.  Pharmacare — a program that would see all prescription drug costs covered through a publicly funded system instead of out-of-pocket — will almost certainly be on the agenda.

Decision makers often talk of “low hanging fruit” — policies that involve minimal disruption but can yield quick wins. In Canadian health care, there isn’t much low hanging fruit: the challenges are complex, the solutions hard to implement and often expensive.

Pharmacare isn’t yet seen as low-hanging fruit — but it isn’t as high up on the tree as our Ministers might think.

Prescription drug coverage and costs are major challenges in health care. Canada is the only developed country that offers universal health insurance but not universal prescription drug coverage. As a result, one in ten Canadians cannot afford to fill the prescriptions their doctors write — yet Canadians spend more on pharmaceuticals than any other comparable country.

We can meet these pharmaceutical policy challenges by reforming how we pay for and purchase medications — that is, if our governments choose to work together. Unfortunately, cooperation doesn’t always come easy in Canadian public policy.

Canadian medicare was designed in the 1950s and 1960s as a partnership between federal and provincial governments. They built a universal, public health insurance system in stages, beginning with insurance for hospital and then medical care.

Today, health care has been transformed by pharmaceutical innovations that allow us to treat many conditions that previously required hospitalization. As the population ages and pharmaceutical technologies continue to change, prescription drug coverage and cost will become ever more important for Canada.

Currently, there is no national standard for drug coverage in Canada. We rely on a patchwork of private and public payers working at odds with each other, and not in the interest of patients.

That patchwork has meant profound inequality: a Canadian with a chronic illness could face costs between a few hundred dollars to over a thousand dollars per year depending on which province they live in — or no drug costs at all if they have work-related private drug coverage.

The most obvious way to fix this problem would be to bring prescription drugs under our publicly funded health system, medicare, just as we have done for doctors and hospitals.

This approach would not cost Canadians more. In fact, if Canada implemented more rational practices for the way that pharmaceuticals are purchased and prescribed, we could pay for the most critical medically necessary prescriptions for every single Canadian at little or no more cost to governments.

How is this possible?

The proof is found in developed countries around the world. From the UK to New Zealand to the U.S. Veterans Administration, health care systems in countries like ours provide comprehensive prescription drug benefits for the same or less cost per capita as what we spend publicly to cover a fraction of our population.

These other health systems get more for less because of two things. First, they use the purchasing power of a single payer to secure best prices for medicines, and they drive hard bargains for those prices. The UK, for example, pays 22% less for brand-name drugs than Canada does – yet it still attracts five times as much pharmaceutical investment on a per capita basis.

The second thing these countries do is engage prescribers and patients in the task of promoting rational, cost-effective prescription drug use. This improves patient outcomes and reduces demands for other forms of health care while also keeping drug costs in check.

In the absence of federal leadership, provinces and territories have done their best to pick some of the low-hanging fruit to improve coverage and reduce costs for prescription medicines in Canada. Provinces are cooperating on generic drug price setting and brand-name price negotiations more now than ever before.

But better pharmacare for all Canadians will be difficult to achieve without the federal government at the table.

The government of Canada could lead on this issue in a way that no single province or territory can do, by supporting the development of a single national list of drugs to be covered for all Canadians and by harnessing the purchasing power of the whole nation to get the best possible bang for our buck.

The Ministers need to aim high this week to address this issue, in hopes that the federal government will eventually join them. The fruit is ripe for picking.

Danielle Martin is a physician and Vice President at Women’s College Hospital in Toronto.

Steve Morgan is an expert advisor with EvidenceNetwork.ca and professor and Director of the Centre for Health Services and Policy Research at the University of British Columbia.

October 2014

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