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Pharmacare: A Solution Looking for a Problem
Pharmacare would be such a good idea – if everybody wasn’t already covered

Pharmacare is one of those ideas that sounds like a no-brainer when you say it fast. People who don’t have drug coverage should not suffer just because they can’t afford to buy life-saving drugs, right? Absolutely, but you do have to say it very fast. The fact is that almost everyone in Canada has either private or government drug coverage – and the few that don’t have coverage are still eligible for government support after spending an income-adjusted deductible. No income, no deductible. So no one is dying on the streets of Canada for want of drug coverage.

There are a few gaps that need to be filled, such as hyper-expensive drugs for rare, or “orphan,” conditions, but we’ll get back to those.

First, some facts and figures. A 2016 study of drug coverage in Canada, by the prestigious non-partisan Canadian Health Policy Institute (CHPI) found that 23.2 million Canadians, out of a total population of 36.3 million, have private drug coverage plans. Another 8.2 million were active claimants under provincial and territorial drug plans – people such as seniors, recipients of social welfare and so on. Another 840,000 had drug coverage as members of First Nations or Inuit communities.

That leaves 4.1 million Canadians who are “eligible non-claimants” under provincial drug plans. These are people – mostly self-employed, or younger people with no drug plans at work – who do not incur large out-of-pocket drug expenses. Depending on their income, they would become eligible for government drug expense assistance if those costs exceeded a certain maximum. That’s geared to income, rising from zero dollars to a maximum of $5,000 per family for the highest incomes.

So, wait. Who is Pharmacare supposed to take care of? Well, no one, obviously, but if you read the fine print in the 2019 Federal Budget – which started the current round of the discussion – you’ll see it’s not about providing care for anyone who doesn’t have it. It’s about setting up a new bureaucracy called the Canada Drug Agency (CDA), starting in 2022 or 2023. It’s mandate, according to the budget paper, is to create the conditions for reaching agreement between the federal and provincial governments for the creation of a universal Pharmacare program. They’ve projected a budget of $500 million.

So, if feds can bring all the provinces and territories on-side for a new national program, the essence of the plan would be for the new CDA to be the sole buyer of all prescription drugs in Canada, whether covered by public or private plans. That would presumably also make it illegal for anyone but the CDA to buy any prescription drugs in Canada. Which would mean that everyone would be required to buy them from or through the CDA. They claim a single government buyer would be able to get lower costs by buying in bulk and that the total cost would come down substantially – even after factoring in the cost of the new bureaucracy.

The second part of the budget proposal is to create a national strategy for high-cost drugs for rare medical conditions.

The issue here is that there are some extraordinarily expensive drugs out there. Such as Myozyme, which is used to treat Pompe Disease. Yes, like most people, I had never heard of either the drug or the disease, but the point is that it costs about $600,000 per year to treat one patient. There are many other such drugs available in Canada – number 10 on the list is Sovaldi, used to treat Hepatitis C. It comes in at around $60,000. There are dozens more, with equally frightening price tags.

The reason these drugs are so expensive is that they are used to treat rare diseases. There are apparently only about 5000 to 10,000 people in the whole world suffering from Pompe Disease. Which, in financial terms, is a very small market for a drug. A pharmaceutical company that spends hundreds of millions developing, testing and doing all the studies and trials to get it approved, wants to recover its costs. Which means a very high unit cost.

But we count on our government – our Medicare – to look past the financial considerations and deliver the promise of universal health care, without regard to whether we have a common or a rare disease. (And this is also one of the main things people have in mind when they think of Pharmacare.)

So, currently, if your private plan covers one of these drugs, you’re home free. If it doesn’t, you should bump over onto your provincial coverage, once you burn through the deductible, right? Not right. Many of these drugs are not “listed” for coverage by the provincial Medicare plans. Which means you pay out of pocket, or you go without. (That’s why we regularly see stories in the media of people appealing to the provincial Ministry of Health for coverage of rare drugs. Sometimes they get special exceptions, often through the intercession of the Minister if there is a lot of publicity, and sometimes they don’t.)

So, yes, working to develop a “national strategy” certainly sounds like a good idea. That should start with a goal and a policy of providing needed prescription medications regardless of cost. This would, of course, involve careful assessment of all drugs – not just the expensive orphan ones – to determine whether or not there is a broad medical consensus that they are needed (i.e., that there are no reasonably priced alternatives) and that they work.

That’s the tricky part. Perhaps the impossible part. A lot of people would be shocked to learn that there is no “broad medical consensus” about the effectiveness of a great many mainstream drugs prescribed every day. But that’s a story for another day and another blog.

Personally, I don’t see how any “national strategy” that does not just mean “more money” can help, but I’m certainly on board with anything that can be done to deliver on the promise of universal health care.

If there is a topic that you would like me to write about, please email me at bill@penmore.com

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