The Broadbent Blog


Charting the path to National Pharmacare in Canada

National Pharmacare has been a topic of discussion in Canada for over half a century, yet we remain unique
among the world’s high-income countries with universal health coverage in that we still do not include outpatient prescription drugs in our national benefit package. There is a growing sense that we will never be able to achieve the full potential of universal health coverage without national Pharmacare.

Consideration of a national Pharmacare plan now sits at the top of the Government of Canada’s agenda, with the Advisory Council on the Implementation of National Pharmacare due to report its findings in the spring of 2019. While the country may be on the precipice of finally providing universal coverage for prescription drugs, conflicting signals from the federal government make the path forward uncertain. What remains clear is that there is broad agreement among experts that a single payer plan is needed to provide adequate coverage for all Canadians and to remedy the major gaps in coverage which now exist. It is also agreed that a single payer plan would lower administrative costs and, even more importantly the ability to control and reduce the cost of pharmaceutical drugs.

A majority of Canadians, healthcare providers, labour organizations and employers also agree that a national single-payer system is an idea whose time has come. Growing income inequality, decreasing access to employersponsored plans, and the rising cost of private insurance are stark reminders that further delay will lead to poorer health outcomes for our population.

While there is widespread support for a national single payer plan, there has been little consensus about a specific detailed policy architecture and role for the federal government. There are two possible ways to achieve singlepayer Pharmacare in Canada. One is through 13 provincialterritorial program in which the federal government provides funding to the provinces and sets national standards, perhaps through the Canada Health Act, or through separate legislation. In return for the cash transfer, which would likely only cover incremental costs, PT governments would agree to provide universal coverage to their residents for an agreed upon schedule of medically necessary pharmaceuticals.

The second major option is a federally financed, regulated and administered Pharmacare program. This is constitutionally feasible because of the federal government’s current jurisdiction over drug safety, price regulation and patent protection. While it is generally assumed that federalism and provincial jurisdiction over health stand in the way of a federal government public single payer program, the provinces have supported this option in the past, with the caveat that special arrangements may have to be made for Quebec.

On balance, we see considerable advantages for the second option. Strong federal leadership is needed to make Pharmacare a reality, because it is far from clear that expanding public health insurance is a current priority for all provinces. Fiscal capacity varies a great deal between the provinces but the federal government has the fiscal means to act if it finds the political will to do so. The federal tax system could be used to recoup some of the cost savings of employers, workers and individuals which would result from a more cost efficient single-payer plan. A federal program would make it easier to establish a national drug formulary and to achieve the savings of co-ordinated drug purchasing. Finally, a federal Pharmacare plan could be implemented more quickly. Canada has already waited too long.

 

Please see the full report at https://www.broadbentinstitute.ca/national_pharmacare_in_canada.