Universal pharmacare is the cure for high Canadian drug costs, says expert

An authority in Canadian health policy says that expanding healthcare drug coverage can lower prescription costs

While Canadian healthcare is often regarded globally as superior to the US system, there’s one area where the land of the free leads by a nose: prescription medication.

“Provinces usually cover medications for the very poor – but so does the US system,” said health policy expert Colleen Flood in a piece published by the Battlefords News-Optimist. “Provinces also tend to cover seniors… although many provinces have or are in the process of de-insuring so-called ‘wealthy’ seniors because of budget constraints.

“Limited provincial drug plans are riffled with deductibles and co-payments,” continued Flood, who is the director of the Centre for Health Law, Policy and Ethics at the University of Ottawa. “Many Canadians have no drug insurance and one in five Canadians now report that someone in their household is not taking their prescription medicine due to concerns about costs.”

Canada, like the US, has higher drug expenditures than most other countries despite the fact that coverage is not universal. “Consider England and New Zealand, where everyone is covered for a broad range of prescription drugs, there are minimal co-payments and, for poor or high users, many drugs are completely free,” she wrote.

In 2009, prices for 20 mg of the cholesterol-lowering drug simvastatin were 2.4 cents in New Zealand and 62.5 cents in Ontario. “Universal drug plans mean national bodies negotiate fairer prices for prescription drugs,” she said. “[I]t's very clear that such insurance is actually the key to affordability.”

Flood recommended several ways to enable universal pharmacare in Canada. First, she suggested expanding the Canada Health Act to include pharmaceuticals, with provinces mostly in charge of implementation and an independent body determining which medicines are essential. Funding would come from federal transfers and possibly premiums collected by each province, either as a percentage of income or from private insurance plans contributing to a central purchasing pool. Drug prices could be negotiated by the provinces, either individually or collectively.

“A more ambitious strategy would be to create a federally administered pharmaceutical plan for essential medicines,” she said. Under that scheme, the federal government would be directly billed by pharmacies when Canadians present prescriptions for essential drugs. Around $5 billion would likely cover a core menu of 150 essential medicines to be made available to all for free. Savings would come from national-scale bargaining power and eliminating tax breaks offered to private insurance plans; private insurers would cover drugs and other health services outside the federal menu.

“There would be no need to change the Canada Health Act. In the spirit of co-operative federalism, this option could be offered to provinces without any legal requirement to participate,” Flood wrote. “And employers would have the benefit of a significant reduction in the costs of keeping their workforce healthy.”

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