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Yet Another Case for Universal Pharmacare

We're paying more than we need to, new study finds. Now, who'll make this an election issue?

By Crawford Kilian 16 Mar 2015 |

Crawford Kilian is a contributing editor of The Tyee.

Canadians may feel smug about 50 years of Medicare (especially compared to the Americans), but we're paying far more than we need to for prescription drugs -- and actually running up the cost of healthcare in the process.

A study published today in the Canadian Medical Association Journal argues that we are the lone exception among countries with universal health insurance in making some patients pay the costs of the drugs they need. Yet some kind of universal pharmacare system, the authors say, has been repeatedly recommended in Canada since the 1964 Royal Commission on Health Services.

Instead we have a patchwork of federal and provincial plans. "Federal drug plans cover First Nations and other targeted populations that account for two per cent of prescription costs in Canada," the study says, while various provincial plans cover some costs across the country. All told, 22 per cent of prescription drug costs "are funded out-of-pocket by patients."

Or by patients who can afford those costs, anyway. The authors say about one in 10 Canadians can't afford to buy their medication, compared to just one in 50 in Britain. For about one in 20 of us, prescription drugs cost over $1,000 in 2007. The predictable consequences: protracted illness, often resulting in treatment of ailments that are more serious and more costly.

In 2012-2013, the study says, Canadians spent $22.3 billion on retail prescription drugs; in B.C., we spent $2.28 billion. In order to measure the cost effectiveness of a universal public drug plan, the authors made some reasonable assumptions, including "small but tiered co-payments... exemptions for low-income families," but no change to pharmacists' dispensing fees and retail markups on prescriptions filled.

By adjusting various factors in their pricing models, they found a range of scenarios. Even the worst-case scenario, they found, would reduce national costs of prescription drugs to $18 billion -- a 19 per cent drop. Under the best case, costs would fall to $12.9 billion, or 42 per cent less than we spend now.

B.C. would see similar cost savings, from at least 18 per cent to at most 42 per cent. All other provinces would enjoy similar savings. Under the study's "base scenario," Canadians overall would save 32 per cent while B.C. saves 31 per cent. And this would include the cost of including people who now have no pharmacare plan.

Total private spending would fall under all scenarios, the study says, and even in the worst-case scenario government would spend just $5.4 billion more. In the best case, government would see a net saving of $2.9 billion. "Savings of this order of magnitude," the authors say, "would put spending per capita in Canada on par with the levels seen in comparable countries such as Switzerland, Austria, Spain and Italy."

Think tanks agree on pharmacare

This is not exactly breaking news. An extensive 2013 C.D. Howe Institute report by three UBC experts came to similar conclusions, arguing that whatever the increase in government spending, "this would, over time, be more than offset by savings to patients, employers and individuals who purchase stand-alone private drug coverage."

Meanwhile, the Canadian Centre for Policy Alternatives has been calling for such a pharmacare plan for over a decade. A 2014 report commissioned by the Canadian Federation of Nurses' Unions says "Billions in savings are ours for the taking to be reinvested in safe, quality patient care."

Prime Minister Stephen Harper himself was calling for it in 2004. But as a CMAJ commentary noted in 2011, when Harper was elected in 2006 "federal willingness to talk about this dried up."

That same commentary also quoted Dr. Steven Morgan, one of the authors of today's report: "Middle- and higher-income Canadians have not rallied behind calls for pharmacare because they really don't see much in it for themselves. ... Most Canadians with moderate incomes are at least partially insured through work and many recognize that they would pay a large portion of the bill for a tax financed system that would generate benefits for those less well off."

The NDP has called for a comprehensive national pharmacare program. So have the Liberals and the Greens. If the Conservatives still support pharmacare, they have hidden their policy where Google can't find it.

This may seem strange, when seniors are a major market for prescription drugs and also support the Conservatives more than other demographics. Presumably those Tory elders are already adequately insured (or consider themselves to be). Personally, I find the first few prescriptions of the new year hard to deal with under my deductible plan, and I suspect many other seniors do as well.

But the opposition parties might find a way to erode the Conservatives' senior support (and win votes among boomers near retirement) if they made a fuss about our lack of universal public pharmacare.

We seniors know how quickly we got old, and how little we prepared for it. Maybe we need to bring our middle-aged children home for a quiet chat about the facts of the end of life.  [Tyee]

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