With fast-rising drug prices, pharmacare is a win-win

October 7, 2014
Claire McIlveen, The Chronicle Herald

Listening to Dr. Danielle Martin plug a national pharmacare program, it’s hard to figure why Canada, unlike all other developed countries with universal health insurance — including the U.K., Australia, New Zealand, France, Sweden, Finland and the Netherlands — has no similar coverage for drugs.

This week, Health Minister Leo Glavine joined a growing number of politicians and health-policy experts, including Ontario Health Minister Eric Hoskins and Halifax MP Megan Leslie, to call for a national pharmacare program.

The need for pharmacare is clear. Some 10 per cent of Canadians, mostly the self-employed, part-time workers or the unemployed, do not get prescriptions filled because they cannot afford to. That leads to poorer health, costly emergency visits and hospital stays and even early deaths.

In Atlantic Canada, that figure is even higher: 20 to 30 per cent of people don’t have any drug insurance.

In a dizzying patchwork of provincial programs, some Canadians do get public drug coverage, often paying a small percentage of the total cost.

Nova Scotia covers drugs for seniors, those on income assistance, people with cancer and diabetes and has some coverage for families without insurance or who face catastrophic drug bills.

Martin, who became a media star on the national health-care scene in March when she stuck up for Canadian medicare before a U.S. senate committee, sees a couple of problems with our system.

First, physicians overprescribe new drugs, heavily promoted by the drug industry, without any real evidence that they will perform any better than cheaper generic drugs.

And second, Canadians pay among the highest prices among OECD (Organization for Economic Co-operation and Development) countries for generic drugs.

“Nova Scotia spends 28 times what New Zealand spends for one of the most common cholesterol-lowering drugs, and it’s because the way we price our generic drugs is actually based on a percentage of the brand-name price, so as drugs come off patent, we now just automatically pay 18 per cent of the brand-name price,” she told an editorial board meeting at The Chronicle Herald.

“But actually, if you were to put those things out to market, and had a competitive process, which is how other countries do it — like New Zealand, like the U.K., the Veterans Administration in the U.S .... you can drive a much better bargain.”

And, instead of various health boards in 10 provinces and two territories and a national government buying drugs, a Canada-wide bulk-buying program would reduce prices even more, says Martin, a former chairwoman of Canadian Doctors for Medicare, vice-president of medical affairs and health systems solutions at Women’s College Hospital in Toronto and a recipient of the Canadian Medical Association Award for Young Leaders.

As it is, because of bulk buying and some other factors, a drug you get in hospital costs about 40 per cent less than one you pick up at a drug store.

Pharmaceuticals have also been going up at a faster rate than other health-care costs, rising at an average of 10 per cent annually from 1998 to 2007.

However, the Toronto physician says national pharmacare can’t happen unless the federal government gets onboard.

And the lucrative pharmaceutical industry lobbies governments heavily to maintain policies that promote their interests.

One of their arguments is that lowering payments to manufacturers, particularly those involved in research and development, will reduce such jobs in Canada and will stifle new drug discoveries.

However, a 2010 report by Marc-André Gagnon of the school of public policy and administration at Ottawa’s Carleton University says that Canada’s sky-high drug costs are getting us very little benefit in terms of pharmaceutical R & D.

The study for the Canadian Centre for Policy Alternatives and Quebec’s Institut de recherche et d’informations socio-économiques shows that although Nova Scotians pay among the highest drug costs in the country, R & D is centred in Quebec, Ontario and British Columbia.

And several countries pay far less than Canada for patented drugs and enjoy much larger proportions of R & D spending.

Average prices for patented drugs in France and the Netherlands, for example, were about 85 per cent of Canada’s prices for such drugs in 2005, and their R & D spending as a percentage of domestic drug sales were 16 and 11 per cent respectively.

Our measure for R & D spending was only eight per cent, a figure that has since dropped to under six per cent.

Australia, spending 78 per cent of what we spent on drugs in 2005, had an R & D figure of 11 per cent.

Our high drug prices are making money for someone — but it isn’t pharmaceutical researchers in Canada. It would make more sense to adopt a national program to lower drug costs for everyone and find a more focused way to stimulate drug research, particularly in areas where new therapies are desperately needed.

Doctors and nurses, who see what happens to Canadians who don’t get the drugs they need, generally favour pharmacare.

The NDP has been lobbying for universal drug coverage for awhile, and the Liberals have called it a long-term goal.

A number of health-care commissions, starting in 1964, have pushed for it but the Conservative Harper government doesn’t seem to be interested, although it is taking part in talks about bulk buying.

It’s a topic that’s picking up steam.

With drug prices rising more quickly than other health-care costs and with Canada’s large, and aging, baby boom population, pharmacare will be on the radar of at least some politicians, and still more voters, in 2015.



Source: The Chronicle Herald