No national remedy: Why Canada still doesn’t have universal pharmacare

Eesha Affan had her thyroid removed in 2019, after she was diagnosed with thyroid cancer in her first year of university.

To ensure all the cancer cells were gone, and to prevent the cancer from returning, she needed two shots of radioactive iodine therapy. But it wasn’t the hospital that provided the medication.

“I had to have it ordered, pick it up from the pharmacy, and actually bring it to the hospital to get the procedure,” Affan said. “That on its own was kind of weird.”

In Canada, drugs administered in hospital are provided free of charge under the Canada Health Act. But outside of hospitals, patients rely on their own insurance, or they pay for it themselves.

Affan’s iodine radiation came to about $3,000. Her father’s insurance covered 80 per cent.

“So, 20 per cent of that medication, which is still a few hundred dollars, was paid out of pocket,” she said. “That was my first realization that our pharmacare system kind of really, really sucks.”

Affan and her family were able to pay, but for about one in five Canadians, the out-of-pocket cost of prescription medications can be devastating.

While politicians agree that there are significant gaps in Canada’s prescription drug coverage system, they can’t agree on a solution. Advocates argue that Canada needs a universal pharmacare system that would cover the costs of all prescription drugs for all Canadians, a position the federal Liberal government has taken. Critics, meanwhile, are concerned that a universal plan would be less efficient and more expensive than expanding existing public plans.

As advocates wait to see if the Liberal party will make good on its 20-year promise to prioritize pharmacare in their 2021 budget, any plans for a universal system are in limbo.

The Canadian Federation of Nurses Unions, which represents nurses across Canada, has been pushing pharmacare since the 1990s.

Linda Silas, the organization’s president, says reports from the federal government have consistently supported a universal system. She points to the Hall Commission of 1964, the National Forum on Health 1997, and the Romanow Commission in 2002 as evidence of the government’s interest without any of the commitment. The reports criticized Canada’s spotty coverage of pharmaceuticals and recommended a national strategy that’s never been delivered.

“The goal of medicare was always that it would encompass prescription drugs,” she said. “They started with hospitals back in the ‘60s because that was the crisis and it never progressed. It’s still you’re covered 100 per cent when you’re in the hospital (but) as soon as you leave the hospital, it’s a different story.”

Canada’s current patchwork system includes 100 government-run coverage plans and 100,000 private plans. According to the Hoskins report, a 2019 report from the Advisory Council on the Implementation of National Pharmacare, 3.5 million Canadians have inadequate coverage or pay for their own prescriptions out of pocket.

The Hoskins report is just the latest government-commissioned report to call for a national coverage system.

Silas said healthcare professional, like nurses, often encounter firsthand how the current system leaves many Canadians behind.

“We have a lot of patients that would just come back later in the year, because they weren’t taking their medication properly. They were either splitting the pills in half or skipping them, trying to make their prescription stretch.”

Melanie Bechard, a physician and member of the advocacy group Canadian Doctors for Medicare, has also seen the weaknesses of Canada’s patchwork system. Before OHIP, she said she saw many children brought into Ontario emergency rooms because the cost of inhalers forced their parents to ration. Outside of Ontario—and outside of pediatric medicine—this remains a concern for physicians.

“It’s not only sad, it’s nonsensical,” she said. “If there’s complications or worsening of their health conditions that could have been prevented by simply taking outpatient medication, ultimately our inpatient system has to take on those additional costs.”

According to a 2017 report from the Office of the Parliamentary Budget Officer, pharmaceuticals cost more in Canada than in most developed countries, costing an estimated $28.5 billion in 2015. The Hoskins report, which suggested an “incremental approach” to implement pharmacare by 2027, predicted that total spending on prescription drugs would drop by about $5 billion a year.

For Bechard, the potential benefits of universal pharmacare far outweigh the costs. She adds that the PBO’s savings estimates don’t even account for the potential benefits of a healthier, more productive population.

“People often ask me whether we can afford pharmacare,” she said. “And truthfully, I say, we can’t afford to not have pharmacare.”

Part of that cost savings would come from an increase of buying power. By negotiating and buying for all Canadians, Canada would have more sway with the pharmaceutical manufacturers. That would increase Canada’s ability to negotiate for cheaper drugs, according to Marc-Andre Gagnon, a pharmaceutical policy researcher and professor at Carleton University.

Currently, he says, insurers are essentially paying for “expensive crap.”

“If you accept to pay for anything at any price, the financial incentives will be working against you,” he said. “The notion of getting value for money, yes, it’s about saving a buck, but it’s also about making sure that we provide the right financial incentives to drug companies to bring to the market drugs that do bring significant therapeutic value.”

Despite potential savings, the cost of implementing national pharmacare has been a major political barrier. Though the Hoskins report touts potential savings, it also acknowledges that implementing pharmacare would cost $15 billion dollars a year.

In 2017, the PBO predicted that a two-point GST hike would be needed to avoid doubling the national deficit if a universal plan were implemented. With the pandemic running up the deficit to $363.4 billion, critics see pharmacare as a frivolous and irresponsible cost.

Conservative health critic Michelle Rempel Garner argued that there is no proof universal pharmacare would save the government money. She calls instead for a “focus on targeting support to those who do not have it, rather than entirely scrapping a system that works for a majority of others.”

But for Gagnon, universal pharmacare has benefits beyond cost savings. The current Liberal proposal, outlined in the Hoskins report, would include the creation of a Canada drug agency which would collect data, conduct research, and negotiate with manufacturers to create a national drug formulary, a list of the drugs that would be covered by the federal government.

Such data could be a boon for addressing an ongoing crisis of inappropriate prescribing, said Gagnon.

“Having universal pharmacare, you can develop the databases, develop more monitoring. You have better data and (the ability) to do something about this when you see that the prescribing habits are out of line with the available evidence.”

Now, Gagnon said, he’s waiting to see if the government has the political will to implement it.

“The recipe to implement is there,” he said. “After all you did in terms of commissions and investigations and advisory councils, these are the recommendations, and you have a freakin’ good plan of how to make it happen.”

Last summer, the NDP tried to make the recommendations in the Hoskins report a reality, but Bill C-213, the “Canada Pharmacare Act,” was overwhelmingly voted down 295-32 in the House at the end of February. Conservatives, Bloc Québécois, and all but two Liberals voted against the bill.

Liberal MPs have been under fire ever since for voting against national pharmacare despite their 20-year promise to deliver universal coverage to Canadians.

Peter Julian, the NDP member who introduced the bill, said the pandemic has heightened the urgency of the pharmacare debate.

About 60 per cent of Canadians are enrolled in private drug plans, most of which are provided through their employer. A report from Angus Reid Institute found that during the pandemic, twice as many Canadians reported losing their prescription drug coverage as have gained coverage. In Alberta, where unemployment is the highest in the country, nearly 1 in 5 lost some or all of their coverage.

Julian called the Liberal’s decision to vote against the bill “a surprise.”

“For decades, we’ve had the Liberal Party promising that they would put in place pharmacare and not doing it,” he said. “So, we just decided to do the government’s work for them.”

Bill C-213 was designed to reflect the recommendations set out in the Hoskins report, which was commissioned by the Liberal government. The bill followed the model of the Canada Health Act, where the federal government sets out the conditions the provinces need to meet to receive federal funding to provide coverage to their constituents.

Despite the precedent of the Canada Health Act, both Conservatives and Liberals have pointed to concerns over jurisdiction to condemn the NDP bill.

Ahead of the vote, Prime Minister Justin Trudeau reiterated his support for national pharmacare but argued his government “will not be imposing, in provincial jurisdiction, rules that are not worked out with them.”

Louise Binder, a lawyer and health policy consultant for patient group Save Your Skin Foundation, said the federal government has little jurisdiction over healthcare, unless universal pharmacare is added to the Canada Health Act.

While Binder wants to see improvements to prescription drug coverage, she said she doesn’t believe a national plan is the right solution. Different demographic, for example, have different pharmaceutical needs that she said a federal plan would not be equipped to account for.

“We have, in some parts of the country, many more elderly people living, so they have different needs than people who are younger and healthier,” she said. “My problem is I haven’t seen or heard anything in any of the things that makes me feel like we’re going to get there.”

Instead of a new system, Binder, like other pharmacare skeptics, argues that improvements to the already existing provincial safety nets should be prioritized.

Accord to researcher Nigel Rawson, all Canadians have access to catastrophic coverage through their province when they can’t afford their prescription.

“They don’t make it terribly easy to access them often,” he said. “Especially if you’re a low-income person and you don’t have assistance, it’s not always easy to get through the red tape of those programmes.”

Co-pays, deductibles, and mountains of paperwork are usually what prevent people from accessing those safety nets. Rawson argues that removing barriers would be a more effective way of solving the gaps in coverage than implementing a new system.

He also worries that the national formulary that comes with universal pharmacare would create a new crisis of individuals losing private coverage for medications that aren’t included on the government formulary.

The Hoskins report proposes that the federal government start with 150 basic, essential drugs to be covered by 2022 and expand the list as the program grows. 

“I’m concerned that we’ll sort of start small and never get any bigger. We would have equality across the country, but equality to a limited number of drugs and equality to a lack of access to a lot of drugs.”

There’s also the concern that if Canada is too strict about its formulary budget, drug manufacturers may be deterred from considering Canada for innovative medicines. Rawson points to New Zealand’s strict pharmacare budget and policy, which has limited the country’s access to high-cost, innovative medicines.

“There’s a balance between sort of like America, where it’s easy to sell medicine, to the other extreme, the market in New Zealand, where they’re really just starting to think that they need to make the country reasonably attractive to innovative medicines.”

Whatever the political arguments, Canadians are in agreement: a 2019 Environics Research poll found nearly 90 per cent support better access to prescription drugs.

Though there’s little risk of her cancer returning, Eesha Affan, like many Canadians, can’t afford to stop worrying about pharmacare.

“My family has a history of diabetes. That’s something that’s always on my mind. I’m very much for Canada establishing universal pharmacare, hopefully within the next few years, so if (and) when that’s an issue for me, it’s covered.”

This article was written for Carleton University's JOUR 3225 course in April 2021.