Paying for more drugs will cut health care costs for governments: report

While picking up your prescription at the pharmacy about 10 years from now, you may see a difference in the variety of drugs and their price tags. Getty Images

Three years ago, Kevin Connell faced an impossible choice: buy the drugs to treat his cancer and put his family on the street, or die.

“Where was I going to get $10,000 a month?” asked the 62-year-old Fredericton man. “One year is $120,000. We would be into $400,000 by now and that is cash.”

Connell’s doctor prescribed him lenolidamide to treat his multiple myeloma, but the drug wasn’t covered by his private insurance and the province wouldn’t foot the bill until he turned 65.

“As if cancer knows what age to attack at,” Connell said. “To deny people basic treatment is to me something that is unfathomable.”

Connell is not alone. Thousands of Canadians are forced to make choices between their wallets and their well-being after a doctor hands them a prescription.

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But creating a national pharmacare program could cover the costs of prescriptions for people like Connell and still manage to save money or break even, according to a recently-released report.

“If you provide people basically free drugs with medicines we know are good value for money for the health care system, it pays for itself in terms of the burden on the doctor’s offices and hospitals because people don’t come back,” said Steve Morgan at the University of B.C.’s School of Population and Public Health.

Morgan co-authored the C.D. Howe Institute report entitled “Rethinking Pharmacare in Canada” – a report that adds to the growing number of voices calling on governments to expand public coverage.

A patchwork approach to pharmacare

Canada is the only developed country with universal health care that doesn’t include prescription drugs in its coverage. Just 44 per cent of total drug expenditures are covered by provincial governments.

Canadians instead rely on a patchwork of provincial plans, private insurance and their pocketbooks to pay for prescription drugs.

Replacing the patchwork with a universal system could save governments up to $14 billion a year, according to Morgan.

Those savings would come from the increased purchasing power of a single public buyer and healthier patients.

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“Every doctor and almost every clinic you go to will have a story of a patient who they’ve prescribed medication for but because they don’t have coverage, they are not able to pay for it,” said Dr. Danyaal Raza. “It’s frustrating.”

Raza works at a community health clinic in one of Ottawa’s poorer neighbourhoods and says a patient can go to the hospital and get everything covered, but the minute they walk out, medications are no longer paid for.

“An ounce of prevention is worth a pound of cure and it’s the same with medications,” Raza said. “When they are discharged from hospital with a prescription and they can’t fill it, that’s going to put them at a higher risk for going right back.”

It’s not just low-income Canadians facing the problem of high prescription costs. Allergies can mean huge bills for families. Crohn’s disease has left people struggling to make ends meet. Young adults with cystic fibrosis face costs in the thousands of dollars each month.

And of course there are retirees like Connell who have been cut off from workplace insurance and may not qualify for public plans due to age or income.

For Connell, the solution came when the company that makes the drug he needs provided it for free. The corporate welfare has allowed Connell to attend his daughter’s wedding, meet his first grandson and see his son graduate from university.

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“I really feel that as a taxpayer and as a member of society that we shouldn’t be dependent on the goodwill of a corporation, that we as citizens can expect more from our governments to have a comprehensive plan that we can go to and be taken care of,” he said.

Bleak prognosis for change in Canada

But when it comes to national pharmacare reform, things can be complex in Canada.

The provinces are responsible for delivering health care, while the federal government helps in setting standards and paying the bills.

A universal pharmacare plan would mean getting an agreement between Ottawa as well as ten provinces and three territories.

It’s a discussion that has been had in the past, but didn’t result in consensus, according to Perry Martin, who is a representative on the Council of the Federation’s health care innovation working group. The council represents the country’s provinces and territories.

“Rather than getting stuck, I think the decision was made by premiers to focus on where we could really achieve on a pan-Canadian basis and that led us to the pricing side,” Martin said.

The provinces are focusing on lowering the cost of drugs by bulk-buying generics and negotiating prices for brand-name drugs collaboratively.

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“If we can get our drugs cheaper, it lowers the cost for everyone,” Martin said, adding that he wouldn’t rule out a conversation about universal pharmacare at Council of the Federation meeting next week.

For now Ottawa appears content to let the provinces take the lead – and to leave pharmacare improvements to the way drugs are purchased by government.

“We are interested in working with the provinces and territories on bulk buying to potentially save even more on the costs of medications,” said newly-minted Health Minister Rona Ambrose in a statement.

But NDP MP Megan Leslie said Ottawa needs to step up and take leadership to get a universal pharmacare program off the ground.

“They don’t want to be leaders on this file and as a result we are paying the cost,” Leslie said. “We are paying the price directly, whether it comes to health outcomes or the cost we are paying at the counter.”

Looking to the private sector for answers

Others believe the answer lies outside of government.

The Fraser Institute  — a right-leaning think tank – would rather see governments encourage a more competitive private-sector insurance market, with subsidies for those who need it.

It’s an approach preferred by the Canadian Taxpayer Federation, an organization that fears a big government program would lead to big waste.

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“Experience generally proves when governments try to operate anything, it costs them a lot to do that,” said CTF director Gregory Thomas.

Thomas added projects managed by the federal government such as the procurement of fighter jets and submarines have been plagued by delays and questions about price.

“If the federal government took over prescription drugs, I think everyone would die eventually,” Thomas said.

But back in Fredericton, Connell believes people will die if the provincial and federal governments fail to act.

“It is a form of passive euthanasia that is happening in our society whereby our governments and our insurance people are failing to cover us…and we are falling through the crack now,” he said.

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