It appears we could be inching closer to a national pharmacare program. An expert panel appointed by the federal government has made interim recommendations that look much like the prelude to such a step.
Whether the panel members will actually go that far we’ll know in June, when their final report is due. But the federal NDP has already committed to a national drug program, and the governing Liberals are under pressure to follow suit. We might hear more in the federal budget on Tuesday.
The benefits are evident. Prescription medications are not covered under our existing medicare system.
Yet at $34 billion a year, drugs costs are the second largest component of health expenditures (hospitals are first).
One result is that on a regular basis, millions of Canadians sacrifice necessities to afford their medications, and an estimated four million leave prescriptions unfilled because the cost is too high.
While all of the provinces, to one degree or another, offer pharmacare plans, there are huge variations in the drugs covered, deductibles and prices.
That’s hardly surprising. Some jurisdictions have larger revenue bases than others. The Atlantic provinces, for example, cannot provide the range of benefits that Ontario does.
A national plan would — ideally — smooth out these differences and bring medication costs within the reach of all Canadians.
There are, however, formidable difficulties. The Parliamentary Budget Officer has estimated that the cost of implementing such a plan would be about $20 billion a year. And even that figure is little better than a guess, since there is no way of knowing in advance what kind of coverage a national plan might offer.
Then again, would the federal government take on such costs, or would it hand them off to the provinces? At a minimum, it appears unlikely that Ottawa could bear all of the strain. It would double the current federal deficit, meaning there might not be another balanced budget for decades.
On the other hand, if the federal government agreed to pay even half the amount involved, provincial treasuries would be hard pressed to come up with the remainder. On a population basis, the B.C. government would be faced with a bill for $1.5 billion. That would almost certainly require deficit financing, again for years to come.
There is an alternative. It has been estimated that a two-point increase in the GST, to seven per cent from five, would cover most of the costs. But that is not an attractive option for politicians facing re-election.
In addition, how likely is it that individual provinces would agree to have their drug coverage settled at the national level? In effect, they would be signing away control over a major budget item.
There is also the complication that at present, many Canadians receive drug insurance from employers as part of their compensation.
The exact figure is not clear, but we do know that of the $34 billion spent on drugs each year, $6 billion comes from private sources.
Some of this amount is employer-funded. A national pharmacare program would let employers off the hook and force governments to make up the difference.
Beyond question, Canada has a dreadful record when it comes to managing pharmaceuticals.
We pay the third-highest amount for medications in the world, and some of that is due to dog-eat-dog behaviour by the provinces.
Each health ministry negotiates its own pricing arrangements with the industry, and signs a non-disclosure agreement that leaves other provinces in the dark. Some of the panel’s recommendations might put a stop to this and other insanities.
But a universal drug plan for all of Canada?
Even with good will, there are major obstacles to overcome.