With the federal government’s recent commitment to developing the Canada Pharmacare Act, Federal Retirees discusses why such a program is important to all of us.
Prescription medication is essential to health care. It treats disease, improves health outcomes and it’s coming with increasing costs.
The Canadian Institute for Health Information (CIHI) reports that Canada spent $34 billion on prescription medicine between public drug plans ($14.4 billion) and private drug plans ($12.3 billion) in 2018. Individuals and families spent $7 billion. In its final report in 2019, the advisory council on the implementation of national pharmacare notes that drug spending in Canada is projected to grow roughly 6.5 per cent per year for the next decade.
Canada’s drug prices are among the highest of the OECD countries. Greater demand and high-cost specialty drugs are significant drivers of increasing prescription drug spending.
According to the Patented Medicine Prices Review Board, the number of drugs that cost more than $10,000 per year has more than tripled since 2006. Drugs for rare diseases are even more expensive, costing hundreds of thousands of dollars, and some more than $1 million per patient, per year, for life.
In its consultations, the advisory council learned that escalating costs are threatening the affordability of prescriptions for patients and families, and the sustainability of private and public plans.
It’s an issue to which the Public Service Health Care Plan (PSHCP) isn’t immune. According to the 2020 annual report from the PSHCP Administration Authority, the PSHCP paid $1 billion for drugs, a six per cent increase over the previous year. This trend is likely to continue as new drugs are introduced to the market annually.
“Members are increasingly worried about the affordability of the plan, with premiums increasing when pensioner plan costs, such as drug costs, increase,” says PSHCP pensioner representative and Association president Jean-Guy Soulière. A plan that’s more expensive for everyone won’t be sustainable and won’t keep up with members’ health needs. This is an issue that I am focused on throughout PSHCP renewal negotiations.”
Several studies have demonstrated how drug costs impact patients and families. People cut spending on heat and food, borrow money, take their medication improperly, or forgo it entirely. A 2016 survey by Statistics Canada found that nearly three million Canadians said they were unable to afford one or more of their prescription drugs in the past year.
And that’s not just people without insurance. Of this three million, 38 per cent already had private insurance, and 21 per cent had public coverage. Deductibles and co-payments can still be significant financial barriers.
Drug plans use various strategies in response to the rising cost of pharmaceuticals and high-cost drugs. Generic substitution, for example, is used in public plans and many private plans such as the PSHCP to help lower costs.
But other strategies used by some drug plans, like increases to premiums and co-payments, as well as annual or lifetime maximums in private plans, shift a greater burden of cost on to individuals or public programs.
The advisory council writes, “a system that depends on every player assuming someone else will find money somehow instead of planning and organizing to ensure needs are met cannot serve the needs of Canadians in the future, or even in the short run.”
Time for national pharmacare
Canada is the only country in the world with a universal health care system that does not also provide universal prescription drug coverage. Federal Retirees is advocating for universal national pharmacare, developed in collaboration with the provinces and territories.
Without change, private and public drug plans will continue to be strained, and Canadians will continue to have unequal, inconsistent access to drugs.
By moving to a national, single-payer model, pharmacare can provide relief from these growing costs. For instance, one of the biggest advantages national pharmacare could deliver would be better bargaining power and a stronger negotiating position for Canada with drug manufacturers, thanks to the power of bulk purchasing. A national pharmacare model would also help streamline administrative costs and provide a sound framework to better monitor drug effectiveness and safety.
Affordable, accessible prescription medications would help Canadians better manage their health. That would ease the burden on other parts of the health-care system, and save an estimated $4 billion to $11 billion annually.
The advisory council recommends private insurance continue to supplement pharmacare coverage, such as drugs not covered under the national plan. Vision care and paramedical services such as physiotherapy would also fall outside national pharmacare and could be covered by private or provincial insurance plans.
Have you felt the impact of rising drug costs? Federal Retirees wants to hear from you. Please share with us (anonymously if you prefer) how drug costs have impacted you or your family. Write to advocacyteam@ federalretirees.ca.