National pharmacare program could put majority of Canadians at risk – MEI report

Pharmacare bill could lead to worse prescription coverage for Canadians

National pharmacare program could put majority of Canadians at risk – MEI report
Emmanuelle B. Faubert, economist, MEI

The pharmacare bill tabled by the federal government last week could lead to worse prescription drug insurance coverage for millions of Canadians, according to a Montreal Economic Institute researcher. 

Emmanuelle B. Faubert, an economist at the MEI, says the majority of Canadians have drug coverage though their employer or through a provincial program. 

“There is a very big distinction between the coverage of public programs and private ones. Data across the country shows that private programs cover much more medications than public programs. So, if you take everyone that is in the private and provincial programs and put them into one single federal program, there is a risk that people, especially those in private programs, will lose quality of coverage because they will have coverage for a lower number of prescription medications. 

“The New Democrats have been very clear about their intent with this legislation,” she adds. “They see it as a Trojan horse to implement a federal monopoly on drug insurance. “Unfortunately, as can be seen in every province, government-run prescription insurance plans cover only a fraction of what private plans do.” 

MEI suggests that if the legislation goes through, it will create a federal monopoly on insurance coverage for birth control and diabetes medication. A newly created Canadian Drug Agency would be in charge of creating a national bulk-purchase strategy for these drugs and create a national list of reimbursed medication. The pharmacare plan framework has been set up to add more categories of drugs to this legislation over time. 

Faubert says that between 2018 and 2021, private drug insurance plans covered 51 per cent more drugs on average than public plans. In Quebec, the province with the most generous public coverage, this difference was 59.6 per cent. 

Even if a public plan as generous as Quebec’s was extended across the country, 21.5 million Canadians would risk seeing the quality of their insurance coverage fall, according to an MEI study

Less access to new drugs 

The study also points out that the Act risks delaying Canadians’ access to new drugs. The average approval delay for the coverage of a new drug by private insurers is 226 days after approval by Health Canada. For the public plans, this delay is 732 days. 

“When you have competition, you have companies trying to lower costs and offer more generous coverage; but when you have a monopoly, you don't have that incentive,” says Faubert. “If you have a monopoly, you don't have that incentive of innovation and progress, and this is true in every industry. You lose the power of negotiation.” 

She says there could be delays for future medication because the creation of pharmaceuticals takes a long time and is very expensive. “Pharmaceutical companies are going to launch their products in the countries where they know they can make back their investments.” 

She says individuals are also at risk because medicine is an individual science. “People react differently to medications. Let's say someone was previously covered for their medication, but now with the new program, they're not covered anymore for that specific medication. With the new program they would have two options: pay out of pocket or change the medication. But that can put the patient in a bad position because if they've tried many medications and only one works and now it's not covered anymore. What do they do? They're in trouble.” 

Still in talks 

The federal government is currently still in negotiations with the provinces and territories. However, MEI says it is unclear at this point whether provinces will have the ability to opt out or not. Alberta and Quebec have already signalled their intention to opt out of a federal pharmacare program. They point out that health care is not an area of federal responsibility, but a provincial matter. 

“Ottawa needs to start trusting provincial governments to take care of their own responsibilities, rather than repeatedly overstepping into their jurisdiction,” says Faubert. 

The MEI is an independent public policy think tank with offices in Montreal, QC, and Calgary, AB. For more information, visit Faubert’s The Dangers of a Pan-Canadian Drug Insurance Program