In the Speech from the Throne this September, the Trudeau government said it “remains committed to a national, universal pharmacare program and will accelerate steps to achieve this system.” That is an improvement over the Liberals’ pledge, during the 2019 federal election, to provide $6 billion over four years as a “down payment” on pharmacare. How much of an improvement remains to be seen.
Behind the pharmacare plan is a simple idea: no one in Canada should be denied access to necessary prescription drugs because of cost. Currently, despite spending over $1,000 per person per year on prescriptions, millions of Canadians have trouble getting the drugs they need. The average cost of prescriptions across the twenty-nine countries of the Organisation for Economic Co-operation and Development (OECD), which mostly have pharmacare plans, is $700 per person per year.
A report prepared in 2018 for the Canadian Federation of Nurses Unions estimated that seventy thousand Canadians aged fifty-five and older suffer avoidable deterioration in their health status every year, and as many as twelve thousand Canadians over forty with cardiovascular disease require overnight hospitalization. Hundreds of thousands of Canadians go without food, heat, and other health care expenses so they can afford the drugs they need.
Pharmacare is overwhelmingly supported by Canadians. An Angus Reid poll published at the end of October found that 86 percent of Canadians moderately or strongly support establishing such a plan. A large majority of people in every province and in every income group, along with 55 percent of people who identified as Conservative voters, were in favor of pharmacare.
Canada — Pharmacare’s Also-Ran
In every country that has a universal program for accessing doctors and hospitals, access to prescription drugs is part of the health care mix. Every country except Canada. Here, government covers about 42 percent of the cost of medicines, private insurance another 36 percent, and the rest comes out of people’s pockets. It wasn’t supposed to be this way.
When Justice Emmett Hall released his iconic 1964 report paving the way for medicare, he envisaged that after universal coverage for doctors, the next step would be prescription drugs. But that next step has still not come.
Over the years, a variety of reports have repeated calls for national pharmacare: the 1997 National Forum on Health, the Kirby Senate report, the Romanow Commission, and in April 2018, a parliamentary standing committee on health. In June 2019, the Advisory Council on the Implementation of National Pharmacare led by Eric Hoskins, the former Ontario health minister, laid out the broad outlines of how to achieve this goal.
Not surprisingly, some groups have mobilized against universal pharmacare. Notably they include Innovative Medicines Canada (IMC), the lobby group for the multinational drug companies, and right-wing think tanks such as the Fraser Institute. These groups argue that the system we have works well for most Canadians and that we should just fill in the gaps in coverage.
A universal pharmacare plan, by lowering drug prices, will make companies reluctant to introduce new “life-saving” drugs or otherwise invest in Canada, claim corporate opponents. They also suggest that pharmacare won’t cover all of the drugs currently covered by private insurance plans and therefore patients will suffer.
None of these arguments hold up to scrutiny. Even people in the medium-to-high income groups who have drug insurance still report not adhering to medications because of cost.
Quebec’s Flawed Model
The Quebec model is frequently touted as the solution for people who don’t have drug coverage. In that province, all employers who offer health benefits must also offer drug coverage. For everyone else, the government steps in. Yanick Labrie, a senior fellow at the Fraser Institute, authored a report advocating the Quebec system for the rest of Canada.
On some measures, such as cost-related nonadherence, Quebec does relatively better than the Canadian average. But given the poor drug coverage in other provinces that is not the right comparison. For example, Quebec lags behind Australia, Germany, the Netherlands, and the United Kingdom — which all offer universal drug coverage — on nonadherence.
Similarly, a greater percentage of people in Quebec report spending more than $1,000 out-of-pocket on drugs, and total per capita spending on drugs in Quebec ($1,087) is substantially higher than the average in the rest of Canada ($912) and in countries with universal coverage ($826).
With respect to investment, drug companies have been threatening to withdraw it from Canada for almost fifty years. When the New Democratic Party government in Manitoba passed a law in 1972 making it mandatory for pharmacists to substitute cheaper generic drugs for those named on prescriptions, the forerunner of IMC said: “It will remain to be seen how much value would be put on the Manitoba market by research-oriented companies … if they can’t meet the prices they could be forced out of business.”
The threat not to introduce new “life-saving” drugs into Canada is also hollow. Most new drugs are not lifesaving or even moderate advances over what is already available. According to the Patented Medicine Prices Review Board (PMPRB), a federal agency charged with setting a maximum price for new patented drugs, only 2.2 percent of all new drugs introduced into Canada between 2010 and 2017 were breakthroughs; another 4.3 percent were substantial improvements, but a whopping 72.5 percent were of slight or no improvement.
Big Pharma Bullying and Blackmail
In a positive step, the federal government has finalized new guidelines for how the PMPRB operates, including how it sets drug prices. Under current guidelines, the board compares Canadian prices to those in seven other high-income countries including the United States and Switzerland — the first and third most expensive places in the world for prescription drugs. As a result of this calculation, Canada ranks fourth in prices.
The new guidelines will remove these two high-cost countries from the list and expand it to include countries, such as Australia, with more reasonable prices. Along with a number of other measures, the PMPRB is projecting these changes will lead to savings for Canada of $8.8 billion over a ten-year period. But given that Canada now spends $33.7 billion a year on prescription drugs, these savings will not dramatically lower our drug bill.
The same groups that have been active in opposing pharmacare are also crying wolf over the PMPRB changes. IMC warns that “the threats of negative impact of the PMPRB changes are real and significant, not only for the life sciences sector in Canada, but more importantly for millions of Canadian patients that depend on new medicines and vaccines.” Life Sciences Ontario, whose membership includes drug giants Amgen, AstraZeneca, Eli Lilly, and GlaxoSmithKline, repeats the claim that drug companies will stop launching new drugs in Canada.
In the middle of October, Nigel Rawson and John Adams published an opinion piece bemoaning the future of drug access in Canada if the PMPRB reforms go ahead. Rawson is affiliated with the Fraser Institute and Adams is the president of the Canadian PKU and Allied Disorders Inc., a patient group that grants gold donors, like the drug company BioMarin, one direct-marketing e-mail per year to its membership.
According to Rawson and Adams, drug prices will be so low that they will be unsustainable, and new breakthrough therapies that can treat disorders that cause premature death and/or life-limiting disabilities will not be marketed in Canada. The authors single out the drug Trikafta, a breakthrough treatment for cystic fibrosis that allegedly has not been submitted for approval to Health Canada by the company because it may not get the price that it wants.
In the United States, Vertex is charging USD $311,000 per year ($411,000) for a Trikafta treatment. But the independent Institute for Clinical and Economic Review, which assesses value for money, estimates the drug is only worth USD $67,900 to USD $85,500 per year (a 73 percent to 78 percent discount) based on the real health improvements it offers patients.
Vertex has cut a deal with the National Health Service in the United Kingdom to market Trikafta at a lower (but undisclosed) price and did the same thing in Switzerland for two of its other cystic fibrosis drugs. The ability of other countries to get reduced prices suggests that Vertex might have been using Trikafta to blackmail the PMPRB into backing down on some of its planned changes.
On November 9, Vertex unexpectedly announced it will be submitting Trikafta for approval in Canada. However, in a statement that indicates that the company has not given up its fight against the new regulations, it said: “We remain genuinely concerned that the PMPRB guidelines may impact access for Canadians to new innovative medicines in the future.” As far as Trikafta is concerned, the fight will soon switch to how much Canadian patients will have to pay.
“The arguments for pharmacare have never been stronger and these moments to act don’t come up all that often,” said Hoskins in the lead-up to the last Speech from the Throne. “It is achievable; we have a road map; we know the benefits; we know the government can get it across the finish line.”
At the last moment, the government caved into demands from IMC and delayed implementing the new PMPRB guidelines from January 1 to July 1, 2021. Accompanying the industry demands was the implicit threat that if the industry was not listened to that the roll out of COVID-19 vaccines in Canada could be delayed.
When asked about this possibility, IMC said:
If the amended regulations come into force, there is no question that companies will be required to evaluate their impact on all new medicines and vaccines, which could in turn lead to more drugs not launching, or delaying their launch in Canada.
Whether or not the government can take action to lower drug prices is not in question. Whether the government will take action is still to be determined.