Is pharmacare the prescription Canada needs?

Abstract

The mounting costs of pharmaceuticals are an emergent concern for Canadians. With the highest per capita drug expenditure in the Organisation for Economic Cooperation and Development (OECD), apart from the United States, the sustainability of Cana-da's drug coverage system has been called into question. Universal pharmacare, defined as the federal provision of drug coverage for all Canadians, has been suggested as a potential solution to the sustainability issue, which would also help mitigate some of the in-equities of the current fragmented system. 1 At present, provincial drug plans cover anywhere between 26% and 45% of prescription drug costs depending on the province while voluntary private in-surances cover up to 38% of costs, except in Quebec where insurance is mandatory. 2 Public funding for prescription costs is at most 44% compared to 99% funding for hospital costs and 90% for medical costs. 1 This article will present the benefits and limitations of implementing universal pharmacare in Canada. the price is right The largest benefit of universal pharmacare would be the reduction of pharmaceutical costs for insurers and individuals. One strategy used by Australia, New Zealand and several European countries is the negotiation of bulk purchase agreements where federal governments purchase large quantities of pharmaceuticals from a provider pharmaceutical company. 3,4 Savings for individuals and insurers are multifactorial. Decreased redundancy lowers administrative expenses, reduces dispensing fees on large volume orders accepted by provider pharmacies and secures more favourable deals through bulk purchasing agreements. 3,4 The provinces already engage in separate less-efficient bulk purchasing agreements. 5,6 A single unified federal agreement would markedly increase our collective purchasing power, shifting the economic surplus away from producers. 3,4,6,7 Implementation of universal pharmacare could also result in savings for the federal government. The report entitled The Economic Case for Universal Pharamacare projects that Canada could save up to $2.9 billion yearly-about 12% of the federal govern-ment's spending on drugs. 4 The April 2015 Canadian Medical Association Journal article by Dr Morgan et al argues that universal pharmacare could reduce total spending on prescription drugs by $7.3 billion, with $8.2 billion in savings accruing to the private sector. Government costs were projected to increase by $1.0 billion. 7 Public funding for subsidizing pharmaceutical costs of individuals is currently administered on a provincial basis. Unfortunately , provinces have disparate coverage plans, which undermine purchasing power, contribute to excessive administration costs and force patients to bear expensive out-of-pocket costs. Ontario's age-dependent drug plan is a fixed subsidy per pharmaceutical for seniors (above the age of 65 years) while nonseniors can register for a drug plan where the deductible is a function of household income. For nonseniors, the government is a payer of last resort, diminishing its purchasing power and leaving uninsured nonseniors exposed to high drug costs. The effects of fragmented financing are worse in British Columbia with its solely income-based drug coverage plan. 8 Comparing expected out-of-pocket drug costs for median-income seniors (income of approximately $52 000 in 2012) shows that the highest costs are in British Columbia ($1000 deductible and 25% copay) with the lowest in Ontario ($100 deductible and $6.11 copay/prescription). 9-11 For median income (approximately $77 000 in 2012) nonseniors, expected out-of-pocket drug costs are higher in Ontario (deductible 4% of net income and $2.00 co-pay/ prescription) than British Columbia ($2250 deductible and 30% co-pay), but costs would be comparable for individuals exceeding Ontario's deductibles. 8,9,11,12 In the end, it is the patient who suffers , with noncompliance rates paralleling the out-of-pocket costs borne. 13 Ironically, noncompliance spurred by excessive drug prices costs the system even more money in the form of unnecessary future hospitalizations. 14 Having a single-payer-funded drug coverage plan would increase the purchasing power of Canada and reduce out-of-pocket drug costs for Canadians. As it stands, Canadians spend too much money on pharmaceuticals and costs are still growing. From 2000-2010, the drug share of national healthcare costs rose from 15.4% to 16.3%. 1 Implementing universal pharmacare offers a chance to reduce pharmaceutical costs for patients, potentially increase savings for the federal government and resolve the fragmented financing of provincial drug plans in order to ensure fair and equitable access to pharmaceuticals. limited political and public support Canada is a poor performer when it comes to drug spending and population coverage among OECD countries. It is often implied that there is an association between Canada's performance and the fact that it is the only country with universal health insurance that excludes drug coverage. 4 There have been calls for a national drug strategy dating back to 1964, but barriers to implementation have prevented a national strategy from coming to fruition. 15 This section will review these barriers and argue that universal pharmacare may not be necessary to reduce drug expenditures, nor be sufficient to improve coverage. Evidence is mounting against cost as a barrier to implementation ; a number of recent studies claim that universal pharmacare