Canadian Panel Calls for Universal Public Prescription Drug Coverage

By Kelsey Johnson and Allison Martell

June 14, 2019

OTTAWA/TORONTO (Reuters) - A Canadian advisory council studying prescription drug coverage said on Wednesday the federal government should create a C$15.3 billion ($11.5 billion) universal, single-payer public pharmacare system, and warned that the current framework requires significant reforms.

The council said the system should be implemented no later than Jan. 1, 2027, and a national drug agency should be created first, with coverage for essential medicines in place by Jan. 1, 2022.

Canada is the only country with a universal healthcare system that does not include universal coverage for prescription drugs. Most prescriptions are paid for through employer-funded drug plans, while some are covered by government programs for the elderly, or people with low incomes or very high costs.

"We can't tinker with what exists. We have to transform it," council chair Eric Hoskins, a former Ontario health minister, said at a news conference.

The report said public and private drug providers told the council the system is "near the breaking point."

Past calls for Canada to extend its medicare system to include prescription drugs since the system was created in the late 1960s have been ignored.

Canadian Prime Minister Justin Trudeau's Liberal government has promised to create some kind of national pharmacare program, and details of its approach may be a key issue in the country's October federal election.

Finance Minister Bill Morneau, a former benefits industry executive, has expressed support for a less ambitious plan that would close gaps in the existing system, instead of replacing it.

Minister of Health Ginette Petitpas Taylor said in a statement that the government would "carefully study" the recommendations "over the coming months."

The plan described by the advisory council would likely cut into profits of insurers and drugmakers in Canada, adding billions to federal spending while saving employers and patients money.

'SPACE' FOR THE PRIVATE SECTOR

Hoskins said costs associated with the proposed program are already being paid by Canadians. A universal plan would save households about C$350 a year, and employers some C$750 a year," he added.

By 2027, total prescription drug spending would be about 10% lower than otherwise, Hoskins said.

Hoskins said he envisions "space" for the private sector after a universal public program is rolled out.

"The profit that insurance companies generate through drug insurance plans is modest, I would describe it, compared to other aspects of benefits provided," he said. "We believe that this is a reasonable transition for them to make."

The council estimated the national pharmacare would cost an additional C$3.5 billion at its launch in 2022, and C$15.3 billion in 2027.

Drug prices in Canada are among the highest in the world, with Canadians spending C$34 billion ($25.6 billion) on prescription medicines in 2018. Government surveys show some 20% of Canadians are uninsured or under-insured.

The current patchwork system is made up of more than 1,000 public and 100,000 private plans, which can make it difficult for smaller payers to negotiate for lower prices.

Canada, like many governments around the world, is grappling with the rising cost of prescription drugs, particularly expensive new specialty treatments for cancer and rare diseases.

In its most recent budget the Trudeau government promised modest changes, including a new national drug agency to negotiate prices and new funds for drugs that treat rare diseases.

($1 = 1.3275 Canadian dollars)

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