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With universal drug coverage, Canadians could save billions: study

February 28, 2017

Carly Weeks

The Globe and Mail

Canadians and private drug-plan sponsors could save more than $4-billion a year if the federal government adopted universal coverage for a group of commonly prescribed essential medicines, according to a new analysis in the Canadian Medical Association Journal.

The study, published Monday, used economic modelling to determine the government would have to spend an estimated $1.2-billion a year to provide universal coverage for 117 essential medicines, which accounted for 44 per cent of the prescriptions filled in Canada in 2015. Individuals and private plans would save nearly $4.3-billion if such a system were introduced, according to the economic modelling used in the study. The government would be able to use bulk purchasing power, which is why it would cost so much less to cover the cost of those essential medicines – drugs that are deemed necessary for public health – than it would for individuals and private drug plans. The drugs include those used to treat some heart conditions, rheumatoid arthritis, HIV, anaphylaxis and migraines.

The federal government is facing increasing pressure to address the rising cost of prescription drugs, but has not committed to a national pharmacare program.

The overall savings to individual Canadians and drug-plan sponsors of the universal coverage recommended in the study more than justifies the cost, said Steve Morgan, one of the study’s authors and a professor at the School of Population and Public Health at the University of British Columbia, while ensuring all Canadians have access to vital prescription drugs.

“The benefit of having a universal plan is to make sure that nobody falls through the cracks of our currently fragmented private and public drug coverage system,” Dr. Morgan said.

The researchers found Canada pays substantially more than Sweden, New Zealand and the U.S. Veterans Affairs drug program for the same generic medications. Dr. Morgan said this shows the federal government could save a significant amount of money by purchasing drugs in bulk as part of a universal coverage program. The study found that generic essential medicines cost 47 per cent less under the U.S. Veterans Affairs program; 60 per cent less under Sweden’s national drug program; and 84 per cent less under New Zealand’s program.

Canada does not have universal drug coverage, despite recommendations from health-policy experts and two royal commissions. Instead, individuals must rely on private drug plans, typically provided through their employers, or pay out of pocket. Provinces provide public coverage for certain segments of the population, such as seniors or low-income individuals.

But this is an inadequate patchwork system that leaves many out in the cold, Dr. Morgan said. For instance, he authored research earlier this year that found many Canadians don’t take their prescribed medication because they can’t afford the cost. He found that one in eight Canadians between the ages of 55 and 64 falls into that category.

Establishing a national pharmacare program would be a major undertaking. But the new study shows that even taking steps toward universal coverage would have substantial benefits, according to Dr. Morgan.

To do the study, the researchers first established a list of 117 so-called essential medicines, defined by the World Health Organization as those that address the priority health needs of a population. The list of essential medicines was published Monday in a separate study in the journal CMAJ Open. In that study, Toronto researchers used the WHO’s essential medicines list and removed items, such as those not applicable to this country, or added drugs that are commonly used here to come up with a comprehensive Canadian list.

Nav Persaud, associate scientist at the Li Ka Shing Knowledge Institute at Toronto’s St. Michael’s Hospital who helped create the list, said it can address concerns about whether the government should cover the cost of all medicines, even those that are expensive or prone to inappropriate prescribing. He said such concerns are likely part of the reason why no national pharmacare program exists, which is why basing a universal drug program on an evidence-based list of essential medicines could be a good starting point.

“I think most people in Canada agree that someone shouldn’t go bankrupt because of a health need,” he said. “And people shouldn’t go without necessary treatments because of their income or the type of job they have.”

In a January interview with the CBC, federal Health Minister Jane Philpott said she plans to bring in new rules that would force drug companies to lower the price of brand-name drugs and will work to help lower the price of generic drugs.

Dr. Morgan said some form of universal drug coverage is the best solution, as the data clearly show it would benefit Canadians without a massive price increase.

“It just takes political leadership,” he said.

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