National Column: Study shows how to utilize pharmacare

by Thomas Walkom

Everyone talks about the need for a universal pharmacare program. Jean Chretien’s Liberals promised one but never delivered. Justin Trudeau’s Liberals are musing about the idea again.

Now a new study from the Institute for Research on Public Policy looks at how such a program might navigate the shoals of Canada’s fraught political system.

Titled “Universal Pharmacare and Federalism,” it was written by University of Ottawa experts Colleen Flood, Bryan Thomas and Patrick Fafard and Toronto-based legal researcher Asad Ali Moten. It reiterates what virtually every pharmacare study has said: Too many Canadians have no drug coverage at all; those who do have such coverage pay too much for what they get; existing government programs are a confusing and expensive hodgepodge that are too often taken to the cleaners by the big pharmaceutical companies.

The authors are scathingly critical of those, like federal Finance Minister Bill Morneau, who would use pharmacare to merely “fill in the gaps” left by existing private and public plans.

Such an approach, they write, is merely a euphemism for off-loading the drug costs of expensive, high-risk patients onto the public system while leaving private insurers free to focus on those who are relatively healthy and thus more profitable.

The authors argue convincingly that to be at all useful, a national pharmacare system must be universal (thus allowing it to bargain cheaper prices from the drug companies) and, like medicare, funded progressively in a manner that does not disadvantage low- and middle-income earners.

Citing evidence that plans requiring out-of-pocket payments discourage the poor and sick from buying necessary drugs, they also argue against the use of co-payments and deductibles.

But their main focus is on how to get such a plan operational in a world where the federal and provincial governments are so often at daggers drawn.

First, the authors write, a national pharmacare plan has to be a joint federal-provincial exercise. Realistically, that means the provinces will have to bear the responsibility for delivering pharmacare.

They could follow the medicare model and, in return for federal money, provide universal drug coverage themselves within broad parameters set by Ottawa. Or they could agree to delegate this responsibility to an arms length agency funded by Ottawa – as they do with Canadian Blood Services.

In either case, the authors write, Ottawa will have to pony up cash. A national universal pharmacare plan, they say, would save money for Canadians as a whole. But it would increase the share that governments pay.

The provinces know from bitter experience that Ottawa is not always a reliable partner in shared-cost arrangements. To make any deal palatable, Ottawa would probably have to agree to bear the full cost of at least a bare-bones system. Flood said in an interview that by one estimate it would cost Ottawa $6.5 billion a year to fund a universal pharmacare program that provides 117 of the most necessary drugs.

Provinces that wanted more, she said, could add to that. And, unlike medicare, a universal pharmacare plan need not be a monopoly. Governments could let private insurers offer competing products.

The other political problem facing any national pharmacare plan is Quebec. That province already has a universal system based on mandatory private insurance. The authors of this study say the Quebec scheme is far more costly than it need be and that it is funded in way that favours high income earners.

But they recognize that Quebec is notoriously jealous of its jurisdiction and while adamant about receiving its share of any federal money up for grabs, is unlikely to agree to a pharmacare system that gives Ottawa a role in setting standards.

The authors note only that, as in other areas of social policy, Quebec might be coaxed into offering a plan that mirrors the national one.

It is not an entirely satisfactory solution. But like much in this interesting study, it is practical.

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