As universal pharmacare gets closer to reality for Canada, drug companies are ramping up their false rhetoric. They say a universal, public pharmacare plan would result in worse access to medicines, higher costs and less innovation in Canada. Don’t believe them.
Canada is the only high-income country with a universal, public health-care system that does not include universal, public coverage of prescription drugs. Instead, we have an incomplete patchwork of private and public drug-insurance plans financed and managed separately from our medicare system. That is insane.
Contrary to pharma’s claims, our private-public drug-insurance system performs worse than universal, public pharmacare systems in terms of access, costs and innovation. Here’s why:
The incomplete nature of our patchwork of drug plans leaves about one in five Canadians uninsured. As a result, about one in 10 Canadians skips prescriptions simply because of the out-of-pocket costs.
Each year, nearly 400,000 Canadians use additional medical and hospital services — services we all pay for — because they skipped prescriptions owing to out-of-pocket costs. More than 300 Canadians die prematurely each year as a result.
That alone should make universal pharmacare a national priority — an emergency.
But there are even more problems with our private-public drug-insurance system. For example, our heavy reliance on work-related private drug plans places strains on Canadian businesses.
Canadian employers currently fund nearly as many prescriptions as provincial governments do. This is not free money. It is a rapidly increasing cost of labour in Canada.
Consider this: Since 2006, the number of prescription drugs priced in Canada at more than $10,000 per patient per year has gone from 44 to 144. Although only about one in a hundred beneficiaries requires such high-priced medicines, they now account for a third of private drug-plan costs in Canada.
If we continue to rely on work-related drug plans, Canadian employers will have to bear ever-increasing risks that just one or two employees could end up bankrupting the company health plan. Or, worse yet, employers might be put in the impossible position of having to decide which employees will get needed treatments and which will not.
Our private-public drug-insurance system is not just unfair in the way it burdens employers and households, it is also inefficient.
Having thousands of different drug plans in Canada drives up administration costs while fragmenting our purchasing power on the global market for pharmaceuticals. Pharma loves this. So, too, do insurance companies. It is why Canadian households and businesses spend far more on prescriptions and related insurance premiums than households and businesses in countries with universal, public pharmacare systems.
Several studies, including one by Canada’s Parliamentary Budget Officer, estimate that universal, public pharmacare would significantly increase access to medicines, but actually cost billions of dollars less than Canadians are already spending on prescription drugs.
That is true health innovation: Spend less, get better outcomes.
Continuing to waste billions on Canada’s incomplete and unfair private-public drug-insurance system isn’t even good for Canadian scientists. Despite spending far more on medicines, Canada attracts far less pharmaceutical research investment than almost every comparable country with a universal pharmacare system.
The United Kingdom, for example, has universal, public pharmacare that provides better access to medicines at 40 per cent less cost per capita than Canada’s system, yet the United Kingdom attracts about five times as much pharmaceutical research-and-development per dollar spent.
Canadians should ignore pharma’s rhetoric about the perils of universal, public pharmacare. The truth is that our private-public drug-insurance system is killing Canadians, putting Canadian businesses and households at unnecessary financial risk, and doing nothing to foster Canadian innovation.
Want something better? Demand that Canada’s federal and provincial governments implement a universal, public pharmacare system that will save lives and money.
Steve Morgan, PhD, is a professor of health policy at the University of British Columbia and founder of Pharmacare 2020, a campaign to promote evidence-based prescription drug coverage for all Canadians.
