Brett Skinner | Toronto Star | 12 AUG 2023
Pharmacare advocates have some explaining to do.
Evidence suggests a national government-run drug insurance program is not necessary, and will be bad for patients, and costly for taxpayers.
Frustrated advocates of national pharmacare are apparently in denial that the facts don’t support their rationale for the program.
On July 31, 2023 the Toronto Star published an opinion by Steve Morgan and Nav Persaud, in which the authors accuse drug manufacturers, and independent researchers of spreading lies about the extent of prescription drug insurance coverage in Canada, the impact of national pharmacare on patient access to medicines, and the costs and benefits of a targeted approach to ‘filling the gaps’ in insurance coverage.
Labelling pharmacare opponents as liars is not a scientific approach to policy debate. Morgan and Persaud are entitled to their own opinions, but not to their own facts. The core issue is whether the rationale for a national pharmacare program is supported by the evidence.
Morgan and Persaud argue that a national pharmacare program is necessary because millions of Canadians are not covered under any prescription drug plan. The authors reference a Statistics Canada survey which found that a significant percentage of respondents reported uninsured drug expenses and/or cost-related reasons for not taking their prescribed medications.
In the endnotes, Statistics Canada warned against misinterpreting the survey responses as evidence of insurance coverage status because respondents “may have prescription insurance, but have deductibles that are higher than the cost of their prescription(s). Others may be eligible for prescription insurance under a public plan but have not enrolled.”
The note should have been the lead headline because in practical terms, Canada has achieved universal drug insurance coverage. About 65% of Canadians have prescription drug coverage under employer–sponsored private drug plans. Seniors and people receiving income assistance qualify for public drug benefits or are otherwise eligible for deductible-based coverage. People who fall in the gaps between private and public insurance are protected because every jurisdiction in Canada has publicly funded safety-net programs for out-of-pocket prescription drug expenses exceeding income-adjusted deductibles.
People in the lowest income deciles are eligible for public safety-net coverage at zero or very low costs. People in the highest income deciles are covered when prescription drug costs exceed 3% to 7% of family income depending on the jurisdiction. Typically, private drug plans use deductibles and copayments and end up insuring about 80 percent of prescription costs.
Average out-of-pocket costs are affordable. Statistics Canada data indicate that in every income decile, more is spent by households on tobacco and alcohol than is spent out-of-pocket on prescription drugs.
The real insurance gap is caused by formulary exclusions. Not all drugs are covered under existing drug benefit plans and programs. If a patient’s prescribed medication is not listed on the formulary, then they are exposed to 100% of the cost as an out-of-pocket expense.
National pharmacare will reduce access to new medicines for nearly 25 million privately insured Canadians. Public plans cover far fewer new drugs compared to private plans in Canada and take much longer to do so.
Of the 182 new medicines authorized for marketing by Health Canada from 2016-2020, public drug plans covered only 43 (24%) by the end of 2021, compared to 116 (64%) in private drug plans. On average, the wait to access new medicines under a public drug plan was 724 days compared to 227 days under private sector drug plans.
The limited scope of coverage in existing public drug plans is indicative of what Canadians can expect from national pharmacare because it would be modeled on existing public formularies.
Morgan and Persaud argue that employers who now sponsor prescription drug plans will save money because those expenses will be covered under national pharmacare. They failed to mention that drug expenses currently paid for by private sector businesses will be shifted onto taxpayers.
The new tax burden would be significant. According to the Canadian Institute for Health Information, private spending on prescription drugs totalled almost $28 billion in 2022. The federal budget is already in deficit. Transferring private sector drug expenses to public budgets will create more pressure to reduce benefits under pharmacare.
Pharmacare advocates should stop the intellectual bullying and explain why Canadians would want a national prescription drug insurance monopoly, managed by the federal government that reduces access to new medicines and increases the tax burden.
Brett Skinner, PhD, is the CEO of the Canadian Health Policy Institute.