This is a copy of the briefing note that the Council of Canadians submitted to the parliamentary Standing Committee on Health to inform their deliberations about the Pharmacare Act in May 2024.
SUMMARY
Bill C-64 (The Pharmacare Act) is an important first step towards a universal pharmacare system that will lower drugs costs and ensure everyone in Canada can access the medicines they need.
Ensuring that people get access to prescription drugs with their health card, not their credit card, must be the objective. By launching pharmacare with universal, first-dollar coverage for two crucial classes of drugs (contraceptives and diabetes medications and devices), Bill C-64 promises to do that.
That promise, however, is threatened by a lack of clarity in the legislation on the model of pharmacare adopted, a lack of funding needed to ensure a swift roll out of the program, and a lack of safeguards to prevent corporate interests from infiltrating the committee of experts and unduly influencing the government’s deliberations.
RECOMMENDATION 1: Bill C-64 must be amended to clearly require that all new drugs added to the formulary in the future receive universal, single-payer, first-dollar coverage.
RECOMMENDATION 2: The federal government should accelerate the rollout of national pharmacare by fully funding coverage for the first two drug classes, and by providing generous funding terms to the provinces and territories for the program’s subsequent expansion
RECOMMENDATION 3: Bill C-64 must require that nominees to the Committee of Experts mandated by the bill fully disclose all potential conflicts of interest, and that any such conflicts result in automatic disqualification from participating in the Committee.
RECOMMENDATION 1: Bill C-64 must be amended to clearly require that all new drugs added to the formulary in the future receive universal, single-payer, first-dollar coverage.
Rationale:
The preamble of Bill C-64 declares that the government is committed to “the step-by-step implementation of national universal pharmacare … carried out in accordance with the recommendations of the Advisory Council on the Implementation of National Pharmacare.” Section 6 (2) of Bill C-64 is clear that funding given to provinces and territories for the first phase of pharmacare will “provide universal, single-payer, first-dollar coverage” for the initial two classes of drugs through their existing public drug plans.
As the program expands beyond contraceptives and diabetes drugs and devices to cover a broader list of essential medicines, it is vitally important that the Pharmacare Act extend the same quality of coverage (universal, single-payer, first dollar coverage) to new drugs added to the national formulary as for the initial two classes of drugs.
Whether subsequent drugs added to the national formulary will be covered under the same framework (accessible to all Canadians, single payer, with no out-of-pocket charges), however, is unclear. The current writing of Bill C-64 simply calls on the Minister to initiate discussions with provincial and territorial partners with “the aim of continuing to work toward the implementation of national universal pharmacare,” according to Section 8 (2), after the Canadian Drug Agency has drawn up a list of essential medicines.
Establishing a framework for universal pharmacare that eliminates out-of-pocket charges is important for all Canadians, not just the uninsured. Drug prices have risen so much over the last few decades that even people covered by a drug plan find themselves struggling to pay for their medicines.
A January 2024 Leger poll found that 7 out of 10 of the 10.8 million Canadians struggling to afford their medications are covered by a public or private drug plan, but still face high out-of-pockets costs.[1] That’s largely because drug costs have increased by 6.6 per cent per year since 1987, driven up by spiraling prices for new drugs.[2] Since 2008, the average annual cost of specialty drugs has increased nearly 13 per cent per year.[3]
Under the impact of relentlessly rising drug prices, existing drug coverage, whether public or private, is frequently far from adequate. As the Advisory Council on Implementing National Pharmacare explained: “People with insurance also struggle to afford their prescriptions because of copayments, coinsurance and deductibles… A substantial proportion of underinsured Canadians have some form of private insurance. But premiums, deductibles, copayments, coinsurance and annual and lifetime limits mean that out of pocket costs can still be high.”[4]
Pharmaceutical and insurance industry opponents of universal single-payer pharmacare have claimed that Bill C-64 will somehow disrupt existing coverage and replace it with something worse. The truth is that by eliminating deductibles, copayments, coinsurance and annual and lifetime limits for insured medications, starting with diabetes drugs and contraceptives, national pharmacare will represent a massive improvement in the quality of drug coverage that Canadians enjoy – even for those covered by an existing drug plan.
RECOMMENDATION 2: The federal government must accelerate the rollout of national pharmacare by fully funding coverage for the first two drug classes, and by providing generous funding terms to the provinces and territories for the program’s subsequent expansion.
Rationale:
Adequate funding is key to moving negotiations forward quickly with provinces so that this program can be implemented swiftly. The best way to do this would be for the federal government to announce its intention to fully fund the first phase of national pharmacare.
Full federal funding for universal, first-dollar (i.e. no direct charges to patients) coverage for the contraceptives and diabetes drugs, including what is currently covered by provincial plans, would accelerate and simplify negotiations with the provinces, ensuring more Canadians get access to these two classes of life-saving drugs sooner.
The Parliamentary Budget Office has recently calculated that the cost of universal coverage for the initial formulary of drugs is just $1.0 billion per year, a mere 0.19% of the total federal budget.[5] Full federal funding for contraceptives and a more expansive list of diabetes medications would cost, at most, $3.0 billion per year, just 0.56% of the total federal budget.[6] The fiscal impact of fully funding this initialphase of pharmacare on the federal government finances would be effectively nil – but access to these medications will be lifechanging for more than 9 million Canadians.
Budget 2024, however, sets aside only $1.5 billion over five years to launch the program, most of which is backloaded. This implies either significant cost-sharing with provinces or a pessimistic expectation on the part of the federal government that very few deals with provinces are likely to be completed in the near future.
Budget 2024 allocates only 11.2% of the total cost of covering the initial two classes of drugs for 2025-26, rising to 39.5% in 2027-28. More funding is required to pay the incremental cost of expanding coverage to a wider list of essential medicines, which Bill C-64 requires to occur within a year of royal assent. Without substantially more funding, it’s hard to imagine how national pharmacare can get off the ground.
Recommendation 3: Bill C-64 should require that nominees to the Committee of Experts mandated by the bill fully disclose all potential conflicts of interest and that any such conflicts must result in automatic disqualification from participating in the Committee.
Rationale:
The government must require that nominees to the Committee of Experts mandated by Bill C-64 fully disclose all potential conflicts of interest and exclude any nominees.
The development of national pharmacare must be informed by objective, truly independent experts in the domain of pharmaceutical policy. It cannot be polluted by unreliable research done by industry consultants posing as scholars or independent researchers. Pharmaceutical and insurance companies have had undue influence over public discourse and parliamentary discussion on pharmacare in the last few years, slowing progress on introducing national pharmacare and introducing misinformation into policymaking, as a recent exposé published by the Council of Canadians has documented.[7]
In order to have oversight over our national pharmacare program that isn’t informed by corporate interests, it’s essential that the Committee of Experts be free from corporate actors or influence.
Conclusion
The introduction of the Pharmacare Act represents an incredible advance for public health care in Canada. It speaks to the core Canadian value that people should be able access health care based on need, not on their ability to pay. Prescription drugs shouldn’t be treated any differently.
It also represents a crucial opportunity to rein in Canada’s increasingly unsustainable drug costs. Only through a single-payer approach will the federal government have the bargaining power necessary to reduce Canada’s sky-high drug prices, which are currently the second highest in the world – behind only the United States.[8]
These were the key reasons why both the Standing Committee on Health (2018) and the Advisory Council on the Implementation of National Pharmacare (2019) recommended a public, single-payer, universal program.
The Standing Committee on Health noted in 2018 that while gaps in prescription drug coverage were a “critical issue” that needed to be addressed, they were far from the whole issue. “The Committee has concluded that merely addressing coverage gaps will not lead to better health outcomes or better cost control.”[9]
The Advisory Council likewise concluded in its final report that “a ‘fill the gaps’ approach was unrealistic since, like our current mixed public/private system, it would do little to lower drug prices or create fairness or uniformity in access across the country.”[10], [11]
In order to solidify this advance for our public health care system and secure the universal, single-payer program will best quality pharmacare program that really delivers care to Canadians, these three recommendations must be incorporated into Bill C-64.
About the Council of Canadians
The Council of Canadians is a grassroots national organization with over 140,000 members and supporters organized in 42 chapters across Canada. A strong voice for public health care, the Council has been organizing for and demanding public, single-payer pharmacare for decades.
In the past year, the Council of Canadians has hosted 18 town halls on pharmacare, collected over 10,000 petition signatures, made more than 5000 phonecalls to cabinet ministers and MPs about pharmacare, and spoken with countless Canadians struggling with high drug costs and inadequate insurance.
[1] The poll, commissioned by Heart & Stroke and the Canadian Cancer Society, found that 19% of Canadians said their family’s drug costs were difficult to afford even though they have a drug plan, and a further 8% said they are uninsured and have difficulty affording their family’s drug costs. “National poll finds nearly 1 in 4 people in Canada report measures such as skipping doses, splitting pills, not filling prescriptions due to cost,” Heart & Stroke, February 13, 2024
[2] “PMPRB Annual Report 2022,” Patented Medicines Price Review Board, 2024. https://www.canada.ca/en/patented-medicine-prices-review/services/annual-reports/annual-report-2022.html
[3] “A Prescription for Canada: Pharmacare for All,” Advisory Council on the Implementation of National Pharmacare (June 2019), https://www.canada.ca/en/health-canada/corporate/about-health-canada/public-engagement/external-advisory-bodies/implementation-national-pharmacare/final-report.html
[4] “A Prescription for Canada: Pharmacare for All,” Advisory Council on the Implementation of National Pharmacare (June 2019), https://www.canada.ca/en/health-canada/corporate/about-health-canada/public-engagement/external-advisory-bodies/implementation-national-pharmacare/final-report.html
[5] “Legislative Costing Note: An Act respecting pharmacare,” Lisa Barkova, Parliamentary Budget Office, May 15, 2024. https://www.pbo-dpb.ca/en/publications/LEG-2425-003-S–an-act-respecting-pharmacare–loi-concernant-assurance-medicaments
[6] This estimate for the full cost of providing universal national coverage for the first two drug classes is based on estimates derived from the per capita cost of B.C.’s contraceptive program ($39.7 million per year to cover a population of 5 million people, so $317 million to cover all 40 million Canadians) and PMPRB figures for total annual spending on insulin and other diabetes drugs ($2.7 billion in 2021). “Market Intelligence Report: Antidiabetic Drugs, 2012-2021,” Patented Medicines Price Review Board, May 2023. https://www.canada.ca/en/patented-medicine-prices-review/services/npduis/analytical-studies/mir-antidiabetic-drugs-2012-2021.html; “B.C. will make contraception free — a first in Canada,” Chad Pawson, CBC News, February 28, 2023. https://www.cbc.ca/news/canada/british-columbia/free-contraception-bc-budget-2023-2024-1.6763392
[7] “A Prescription for Profit: Exposing Big Pharma’s campaign of misinformation on pharmacare,” Council of Canadians, May 2024. https://canadians.org/prescription-for-profit/
[8] “PMPRB Annual Report 2022,” Patented Medicines Price Review Board, 2024. https://www.canada.ca/en/patented-medicine-prices-review/services/annual-reports/annual-report-2022.html
[9] “PHARMACARE NOW: PRESCRIPTION MEDICINE COVERAGE FOR ALL CANADIANS,” Report of the Standing Committee on Health, April 2018. https://www.ourcommons.ca/Content/Committee/421/HESA/Reports/RP9762464/hesarp14/hesarp14-e.pdf
[10] “A Prescription for Canada: Pharmacare for All,” Advisory Council on the Implementation of National Pharmacare (June 2019), https://www.canada.ca/en/health-canada/corporate/about-health-canada/public-engagement/external-advisory-bodies/implementation-national-pharmacare/final-report.html
