Healthy Skepticism Library item: 864

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Cassels A.
We can swing no-frills Pharmacare
Vancouver Sun 2004 Sep 1

Full text:

It’s rare when we agree with the inestimable Ralph Klein on health care, but a national pharmacare program, as recently put forward by the premiers is a “ a stroke of brilliance”.

“A brilliant tactical ploy” says one pundit. “Campbell’s Health Brainwave”
a local Victoria commentator gushes.

We agree but know that the first thing that any politician confronts when considering the prospect of making a national drug plan is what we call “sticker shock”.

“Sounds good, but it’ll cost how much?” they say as they sputter into their beers…

Estimates range from $8 billion to $12 billion per year depending how generous the national program would be. Of course the premiers might balk at anything less generous than their current programs, so harmonizing all programs to the most generous level could be expensive indeed.

But there is a simple way for the federal government to call the premiers bluff. We call it the ‘Back to the Essentials” approach to drug coverage.
There are over 5,000 prescription drugs for sale in Canada yet there are less than 350 drugs on the World Health Organization’s (WHO) Model List of Essential Drugs. The WHO defines essential medicines as those drugs that “satisfy the priority health care needs of the population. They are selected with due regard to public health relevance, evidence on efficacy and safety, and comparative cost-effectiveness.”

Determining the cost of covering all “essential drugs” for all Canadians would be hard to predict, but using the Essential Drugs List as a basis for drug coverage would substantially reduce the $12 billion estimate.

In such a scenario you could actually bring in an affordable first-dollar national pharmacare plan covering the essentials. As well, overall administrative expenditures would be less than they currently are because large plans are much more efficient. The larger provincial plans like the ones in Ontario and Quebec have costs of 2-3% versus the much smaller commercial plans of 8-9%.

Some might argue that the essential drugs concept has some merit, and is certainly necessary for poor countries, but for a wealthy country like Canada the WHO list is too restrictive. It doesn’t allow enough choice where people don’t respond to first-line agents. People suffering uncommon diseases may be left without coverage since drugs for these conditions tend to be relatively expensive and aren’t included on the Essential Drugs List.

But these objections are easily overcome too, with an independent national formulary committee to come up with a list of drugs to cover these circumstances. The newly minted “Common Drug Review”, a cooperative federal-provincial structure has proven that nationally we can cooperate-and set up a process to examine new drugs to determine if they pass the litmus test of being worthy of public coverage.

The fly in this ointment is something that the federal government has little experience or stomach for: taking on the drug manufacturers. Australia, for example takes a much more aggressive stance in bargaining with manufacturers to get lower prices and achieves prices on new drugs that are about 9% lower than ours.

Yet without aggressive bargaining, and some serious “back to the essentials” approach to creating a basic list of drugs deemed worthy of coverage, a national Pharmacare plan for Canada would be a profit bonanza for the pharmaceutical companies – larger markets, same prices and a guaranteed payer. Taxpayers everywhere would be sputtering into their beers.

But just think of the political possibilities if the federal government really had the guts to institute an affordable national pharmacare plan?
They’d merely have to say to the self-righteous provinces. “Ok, smartypants, we’ll pay for ‘essential drugs’. If you provinces want to pay for non-essential drugs go for it. You can top up the essential plan with your own money as you see fit.”

With the savings from this national plan, Canada could actually afford to do what we’ve needed for a long time: we could institute a program to promote appropriate prescribing so that our doctors could learn about new drugs from objective sources rather than company marketing spiels. A National Prescribing Service (similar to the one in Australia) that would work through the Royal College of Physicians and Surgeons and the College of Family Physicians would be ideal.

Canada long ago rejected the idea that there should be a difference in coverage for hospital and doctors’ services and we got Medicare. However, when it comes to outpatient drugs we have adopted the American model of coverage for some but not others, deductibles and copayments. If we look south of the border we can see what a mess such a fractured system is.

A “just the basics, ma’am” approach to a new national plan would allow the feds to give the premiers what they are asking for, provide essential drug coverage for every Canadian and not break the bank. It’s time for the feds to do the right thing.
Think National. Think Essential. Go for it. We dare you.