No pharmacare in federal budget, but funding for a national drug agency

The Trudeau government did not announce a national pharmacare program in Tuesday’s budget – the last budget of its mandate.

It did, however, announce funding for what could be the first steps toward such a program: money to help create an agency to assess drug effectiveness and negotiate prices, as well set up a national drug formulary – a list of drugs that all Canadians could access.

These two measures are among those recommended by the Advisory Council on the Implementation of National Pharmacare, which released an interim report earlier in March.

The third measure recommended in that report, an information technology system to track prescription use and drug prices, was not mentioned in this year’s budget.

READ MORE: Federal budget 2019 coverage 

The government is dedicating $35 million over four years, starting in 2019-20, toward the creation of a Canadian Drug Agency.

According to the budget documents, the goal is to make “prescription drugs affordable for all Canadians” and these measures will start Canada down that road.

But we still don’t know what exactly a national pharmacare program will look like or how it will work.

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“This is almost as notable for what it didn’t include as what it did,” said Michael Law, Canada research chair in access to medicines at the University of British Columbia.

“There is no announcement for changes to drug coverage plans, no model for moving forward. They didn’t do any investment in IT as the advisory council had suggested and there’s not a whole lot in here about how they’re going to change drug prices aside from better negotiation.”

According to David Macdonald, senior economist for the Canadian Centre for Policy Alternatives, the government’s announcements so far leave the door open for the government to choose what kind of pharmacare program it wants.

Having a national drug agency doesn’t necessarily commit the government to choosing whether its eventual pharmacare program will simply “fill in the gaps” for people who don’t currently have drug insurance, or create a full national program where the federal government covers the cost of drugs, Macdonald said.

“This budget doesn’t tell us which way the Liberals are leaning,” he said.

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Linda Silas, president of the Canadian Federation of Nurses’ Unions, called the measures announced in the budget “baby steps.”

“We knew it was going to be a pre-federal election campaign budget, so there’s a little sprinkle of everything. Now we have to work to make sure that the platform and their promises are as clear as crystal on the national pharamacare program.”

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For more details, he expects Canadians will have to wait for the Advisory Council to release its final recommendations, expected in late May or early June. That report will detail the architecture of national pharmacare and how it should be implemented.

“It will be interesting to see whether the Liberals take that up and what that recommendation is,” Macdonald said.

At a press conference, Finance Minister Bill Morneau said Canadians will have to “stay tuned” for more details on pharmacare and a program can’t be created overnight.

Silas said her organization is “relieved” that the budget didn’t pre-empt the Advisory Committee’s recommendations, saying that it is smarter to wait for the report.

One of the biggest reasons to create a national drug agency to negotiate drug prices is that by buying in bulk, the agency could theoretically cut a better deal, Macdonald said. The government estimates that a central agency could save billions of dollars per year.

But Macdonald thinks that if the government chooses an approach for its pharmacare program that merely extends benefits to those who don’t have drug coverage, rather than a fully federally-administered drug plan, it likely won’t see those cost savings.

“The fill-in-the-gaps approach would cover people who are not necessarily covered, but it would keep Canada at one of the highest per-capita drug costs in the world,” he said.

According to the Advisory Council’s interim report, drug spending in Canada grew from $2.6 billion in 1985 to $34 billion in 2018. It’s now the second-biggest category of health care spending, behind hospitals.

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Currently, drugs are covered through a patchwork of private and provincial plans. While most Canadians have drug coverage through private insurance, 5.5 per cent of Canadians in 2016 reported being unable to afford one or more prescription drugs in the past year, according to a report published in the Canadian Medical Association Journal in 2018. That same report estimated that about 730,000 people cut back on heating their homes in order to pay for prescription drugs.

Silas is hoping that eventually, Canadians have access to a single-payer pharmacare program that draws upon an evidence-based national formulary. “The evidence is there. There’s been so much research done on why we need a pharmacare program and how we can do it. Now we need the political will.”

The budget also includes measures to help people with rare diseases pay for their medication: up to $1 billion per year over two years, beginning in 2022-2023, as well as up to $500 million in ongoing funding per year. Prices for these medications can often exceed $100,000 per patient per year and are a huge part of Canada’s growing drug costs.

Other health-related measures in the budget include $50 million over five years to help create a National Dementia Strategy, money to create a nationwide data and performance system for organ donations and transplants and $25 million to help set up a national suicide prevention service.