Researchers: Universal drug plan would save billions

With advisors enduring a rough ride from employers over drug costs, a research report advocating a universal drug plan could offer a reprieve.

With advisors enduring a rough ride from employers over drug costs, a research report advocating a universal drug plan could offer a reprieve.

A University of British Columbia report found the country could save $7.3 billion annually with universal public coverage of medically necessary prescription drugs.

“Our study shows that universal pharmacare would save private citizens and corporations more than $8-billion at a cost to government of less than $1-billion,” said Dr. Steve Morgan, lead author of the study and professor of health policy at UBC’s School of Population and Public Health. “No government, no matter how fiscally conservative, should turn down that bargain.

“To put this another way, failure to implement a universal pharmacare system that is simply on par with comparable countries around the world will cost the Canadian economy nearly $100-billion over the course of a decade.”

The study also found that a particular concern for plan sponsors and advisors alike, high-cost drugs, could be accommodated at a modest cost to the public.

Under most plausible scenarios, the high cost of treatments for diseases like cancer and rheumatoid arthritis would be offset by savings achieved in relatively common drug classes, such as treatments for high cholesterol and high blood pressure.

Read more: Early treatment cuts rheumatoid arthritis treatment costs

In the study’s best case scenarios, savings for the country would put per capita pharmaceutical spending in Canada on par with the levels seen in comparable countries such as Switzerland, Austria, Spain, and Italy.

But Canadian spending would still be significantly higher than that in the United Kingdom, Sweden, Finland, the Netherlands, Norway, New Zealand and Denmark.

Researchers found that increasing the use of generic drugs and bringing Canadian drug prices in line with other countries where universal drug plans achieve better prices through bulk purchasing and negotiation, would add up to significant savings.

“It’s a win-win,” said Morgan. “A universal pharmacare system would improve the quality and accessibility of health care, while saving the Canadian economy billions of dollars every year.”

Canada is the only developed country with a universal health care system that does not include prescription drug coverage. Calls for universal pharmacare have been coming since the 1960s, but were never implemented because of the perception that it would necessitate substantial tax increases.

“For too long, policy makers have assumed that universal Pharmacare is an expensive policy for governments – that assumption turns out to be wrong,” said Dr. Danielle Martin, a co-author of the study and a professor at the University of Toronto.

“With the money saved from using generic medicines, bulk purchasing, and better approaches to pricing, we can afford to cover medically necessary drugs for all Canadians without increasing taxes.”

The study shows that the private sector, predominantly the employers and unions that sponsor work-related drug benefits today, would save between $6.5-billion and $9.6-billion annually with comparatively little increase costs to government.

Under many plausible scenarios, total public spending on medicines would actually fall if Canada had a universal pharmacare system.

The study modelled the cost of universal pharmacare based on data from $22-billion worth of prescription drug purchases in 2012-2013.

The study’s calculations included the cost of increased use of prescription drugs by Canadians who currently can’t afford to fill those prescriptions.

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