TORONTO, Sept. 24, 2019 (GLOBE NEWSWIRE) -- Constructive public discussion about a national pharmacare program in Canada is hindered by a lack of balance in the reporting of evidence. Several studies have been published in the journal Canadian Health Policy, that offer an evidence-based perspective that counters the federal Hoskins report. The research shows that national pharmacare is unnecessary, bad for privately insured people and costly for taxpayers. The research also recommends a less disruptive, less expensive policy option to close the real drug coverage gap caused by public formulary exclusions.
Pharmacare is unnecessary: all Canadians are insured under existing private and public drug plans.
Of the 36.3 million people who lived in Canada in 2016, 23.2 million people were covered under a private drug plan. The remaining 13.1 million people had publicly funded drug benefits (e.g. Ontario Drug Benefit) or were otherwise eligible for publicly funded safety-net coverage (e.g. Ontario Trillium Drug Program). In every province, public plans are the payer of last resort and out-of-pocket costs are capped at affordable levels across all income deciles. In 2016, average out-of-pocket spending on prescription drugs ranged from 3% of income ($390 per year) for the lowest income households up to 0.4% of income ($1,224) per year for the highest income households. On average, across every income decile, more is spent by households on tobacco and alcohol than is spent out-of-pocket on prescription drugs.
References: Prescription drug plan coverage 2016: how many Canadians were insured, under-insured or uninsured?; Out-of-pocket prescription drug costs: What are the implications for National Pharmacare?
Pharmacare will reduce access to medicines for privately insured Canadians.
National pharmacare will be modeled on existing public formularies. Public plans cover far fewer new drugs compared to private plans in Canada. Public plans also take much longer to cover new drugs compared to private plans. Of the 491 new drugs approved by Health Canada from 2009 to 2018, 87% (427) were covered by at least one private plan compared to 47% (229) that were covered by at least one public plan, as of May 30, 2019. The average wait to first formulary listing was 152 days for private plans and 473 days for public plans. The aggregate average across all public drug plans was even worse: only 26% of new drugs were covered and the average wait was 690 days. The real insurance gap is caused by public formulary exclusions which expose patients to 100% of the cost of their prescribed drugs as an out-of-pocket expense.
References: Coverage of new medicines in Federal-Provincial public drug plans in Canada 2009-2018; Coverage of new medicines in private versus public drug plans in Canada 2009-2018
Pharmacare will require huge tax increases.
The Parliamentary Budget Officer (PBO) calculated that if it had been implemented in 2016, a national pharmacare program based on Quebec's public formulary would shift over $19.3 billion annually from provincial budgets and private sector payers to the federal budget and would impose over $7.3 billion per year in additional costs for taxpayers; and this was after accounting for $10.8 billion of so-called “savings” from formulary restrictions, mandatory generic substitution and extreme price regulation. Using the same model and a more realistic set of assumptions, CHPI estimated that the minimum net additional federal cost would have been $26.2 billion per year if the program was implemented in 2016. More importantly, the minimum net additional taxpayer cost from would have been nearly $12.3 billion annually.
References: Taxpayer Cost of National Pharmacare: Disputing the Parliamentary Budget Officer’s Estimate
Less disruptive, less expensive to just fill the gaps caused by public formulary exclusions.
CHPI modeled a federal option for pharmacare that fully closes the insurance gap caused by formulary exclusions under existing public drug plans. It provides nearly $2.3 billion more in net benefits for patients than the model studied by the PBO and it would cost taxpayers $2.1 billion less. CHPI’s model doesn't require shifting the full cost of existing provincial public drug plans onto the federal budget, nor require the government to cover privately paid costs, so it reduces the burden on the federal budget by $14.1 billion compared to the PBO's model.
References: Close the Gaps: Patient Benefits and Taxpayer Costs of 3 Pharmacare Options.
CHPI will provide complimentary digital copies of the referenced studies upon media request.
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ABOUT CHPI
Launched in 2012, Canadian Health Policy Institute (CHPI) is a private-sector research enterprise and the publisher of Canadian Health Policy (CHP) journal, which features the work of CHPI affiliated researchers and external independent authors. The institute is funded by sales of articles and subscriptions to readers. We set articles free (or at reduced prices) if the research and publishing costs are recovered through sponsorship. Our published research is subject to formal review and critique by CHP editorial staff, CHPI affiliated researchers and independent external experts in health economics and health policy.