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BC’s pharmacare system a catastrophic failure

A version of this commentary appeared in the Vancouver Province, the Vancouver Sun and iPolitics.ca

SONY DSCIt has been a decade since British Columbia implemented Fair PharmaCare. The program ended what was effectively public provision of prescription medicines for seniors and created an income-based government safety-net for all people, regardless of age.

So how has the program performed?

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 BC fares poorly within Canada, and that Canada fares poorly among comparable countries abroad.

Under Fair PharmaCare, public subsidies kick in only after prescription drug costs surpass 3% of household income. This makes BC’s the most generous income-based drug plan in Canada. But before celebrating, consider this: most BC households still pay thousands of dollars in annual deductibles, many are not filling the prescriptions they need, and costs to employers, unions and patients have skyrocketed.

What is not well understood is that the vast majority of BC citizens receive no benefit at all from the Fair PharmaCare program. And patients who do receive benefits still face considerable out-of-pocket charges for their prescription drugs.

Perhaps worst of all, most people who require high-cost prescription drug treatments will do so year after year, often until death. This is because high-cost prescription needs only occur among people with serious, typically-chronic illnesses. The deductibles under income based pharmacare programs, including BC’s Fair PharmaCare, are therefore tantamount to an income tax levied only on people in very poor health. No comparable healthcare system imposes such charges on patients.

Out-of-pocket costs also have an adverse effect on people with more routine medical needs. Time and time again, studies have shown that even small charges will deter patients from filling prescriptions. Because the Fair PharmaCare program does not provide any coverage for people with routine medical needs, it creates a very effective barrier to accessing necessary medicines.

Nearly one in five British Columbians reports that they have been unable to afford medicines prescribed by their doctors. That is double the rate of financial barriers to accessing medicines found in the rest of Canada and 10 times the rate found in the United Kingdom.

The problem with financial barriers to filling prescriptions is that patients often stop taking medicines that prevent them from needing other, more expensive forms of healthcare. This can cost governments more in the long run than what is saved by imposing such charges. For this reason, every other developed country with a universal healthcare system provides universal coverage of prescription drugs at little or no cost to the patient.

Of course, Fair PharmaCare was implemented to reduce government spending on prescription drugs. It sure did! Some estimates indicate that Fair PharmaCare has reduced public spending by $2-billion since its introduction. But that $2-billion is not “savings” to British Columbians. Far from it. Costs have simply shifted off government books and onto employers, unions and patients who fund the now fast-growing private cost of medicines.

In their defence, the BC government may point out that the Romanow Commission recommended universal coverage for catastrophic costs in 2002. I know the Commission’s recommendations well – I wrote them.

Romanow recommended universal coverage for catastrophic costs as a minimum, short-term standard for public pharmacare programs. Romanow went on to recommend that public drug plans then be expanded to provide universal coverage – at little or no cost to patients – for drugs of proven value for money in the healthcare system.

Though 10 years have passed, it is not too late for BC to build a better pharmacare system.

Expanding coverage so that the government ensures access to essential medicines through public provision will improve overall healthcare system performance. It will also reduce financial strains on patients and increases our collective buying power, resulting in lower costs to us all.

Every comparable healthcare system in the world shows that prescription drug coverage can be better, fairer, and cheaper for everyone. British Columbians should demand no less of their government in this critical component of the healthcare system.

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 work is licensed under a Creative Commons Attribution 4.0 International License.