‘Free medicines’ program an industry ploy to stop public pharmacare

With pharmacare legislation expected this fall, the insurance industry is ramping up efforts to protect its profits

First published in The Breach.

When a company announced last week that it will offer free essential medicines for low-income Canadians, it sounded like an incredible act of goodwill.

The new pilot project from GreenShield, which received glowing coverage in the mainstream media, promises to cover 1,000 people in “underserved communities” in southern Ontario before scaling up to more than 1 million Canadians.

The need is dire: one in four Canadian households struggle to fill needed prescriptions.

But the announcement is actually a stunt, the latest move in a coordinated and sophisticated push by industry to sway public opinion against universal, single-payer pharmacare and protect their profits.

Both the pharmaceutical and insurance lobbies have been dialling up efforts to derail the Liberal government’s pending pharmacare legislation—and behind the scenes, GreenShield has played a central lobbying role.

GreenShield is a non-profit company, but its executives have explictly said that the free medicines program is meant to offer an “alternative” to a universal pharmacare program. And the company is a member of a major insurance lobby group that is also pushing against pharmacare.

While the head of the top insurance industry lobby has said that a public plan would be a “disaster” for Canadians, the real disaster they fear is the one that would befall their profits.

If pharmacare coverage cuts into a market they currently control, insurance companies stand to lose as much as $16.6 billion in revenue per year from workplace drug insurance premiums.

Instead, they have been advocating for an approach to pharmacare that marginally improves access for the uninsured but leaves the current mixed private-public system—and massive insurance industry profits—untouched.

Insurance industry on high alert

Their latest push comes at a pivotal moment. In March 2022, the Liberals revived their long-delayed commitment to deliver national pharmacare when they signed a confidence-and-supply agreement with the NDP. The deal compels the government to pass a Canada Pharmacare Act by the end of this year, though it includes no explicit promise that it would be towards a universal public program.

With the Liberals expected to table that legislation this fall, the struggle to determine the shape of Canada’s pharmacare plan is now heating up.

Last month, the NDP introduced their own pharmacare bill, which the party says lays out the legislative model for a universal, single-payer, publicly administered program.

That bill appears to have spooked the insurance industry.

“A fully one-payer national pharmacare is going to be a disaster for this country,” warned Denis Ricard shortly after the bill was tabled. Ricard is chair of the board of the directors of the country’s biggest insurance industry lobby, the Canadian Life and Health Insurance Association (CLHIA).

“It’s important for our organization that we make the case for Canadians, that they will lose in this if, for any reason, the plan goes national,” he said in an interview with Insurance Business magazine, referring to the NDP bill.

The CLHIA has also been busy running a campaign on social media that warns Canadians they could lose access to medicines they need if pharmacare is done “the wrong way.”

“[Canadians] can’t afford to lose their workplace benefits because of politics,” the Better Health Benefits campaign warns.

A blueprint for stopping ‘disruptive’ single-payer plan

It is in this context that GreenShield Canada, comparing itself to the United Nations, announced its pilot project to provide free insurance to low-income participants in the Windsor and Niagara regions of Ontario.

Reading the uncritical coverage of this announcement in The Globe and Mail and The Toronto Star, you’d be forgiven for mistaking the articles for sponsored content. Both outlets featured puff pieces that repeat the company’s splashy claims about addressing health equity and unaffordability without any added context about what is politically at stake. In fact, they were almost indistinguishable from an actual sponsored story about the plan published by the National Post.

GreenShield describes itself as a not-for-profit social enterprise. That’s because in addition to its for-profit commercial services, the company reinvests earnings via a “social impact brand” that it says supports struggling Canadians.

But what news reports about the GreenShield drug plan also failed to mention is that the company is a member of lobby group CLHIA and their president and CEO, Zahid Salman, who they both quoted at length, was until recently a director on the board of the CLHIA.

While representatives from GreenShield tout their pilot project as a way of giving back to the community, the project in fact comes with significant caveats: it covers only those below a certain income level, and reimbursements are restricted to a limited list of medications and capped at $1,000 per year.

GreenShield is also frank about the political intent behind the initiative.

“We think this is a very viable blueprint the government can use when thinking about how to adopt pharmacare,” Salman told The Star, adding that he believes his company’s model is a better alternative to the “disruptive” single-payer system proposed by the NDP.

GreenShield, which is the fourth-largest health and dental benefits company in Canada, has also been playing a leading role in a lobbying campaign that has intensified since the Liberal and NDP agreement.

In the year following that deal, insurance and pharma lobbying of Health Canada increased by fivefold and fourfold, respectively. Lobbyists from individual companies and their industry umbrella groups like CLHIA and Innovative Medicines Canada logged a total of 219 meetings with Health Minister Jean-Yves Duclos and his officials–a rate of more than four meetings per week, every week for the entire year.

Among insurance companies, GreenShield Canada has led the way, with its lobbyists meeting with Health Canada 10 times following the confidence-and-supply agreement.

Public pharmacare would help millions

But if the stakes of a public pharmacare program are high for these powerful industries, they’re even higher for the millions of ordinary Canadians struggling to afford their medications.

People in Canada are two to five times more likely to skip out on prescriptions for cost-related reasons than those in countries with universal, public drug insurance.

The rise in gig work, part-time jobs and other forms of precarious employment that don’t offer adequate health benefits has meant that an estimated 7.5 million Canadians are uninsured or under-insured. Even those with insurance can struggle to pay for their medication. Spiraling drug costs have led to the erosion of existing coverage, as both public and private drug plans raise premiums and scale back benefits.

Ironically, the insurance industry too has bemoaned soaring drug prices. “The ongoing increase in the number of high-cost drugs coming to market is putting a strain on the system. No question,” CLHIA president Stephen Frank told The Globein May.

But only a public, single-payer pharmacare system can help lower drug costs.

Pharmaceutical companies charge significantly more for the same drugs in Canada than in other countries with single-payer pharmacare systems. A national program covering all 40 million Canadians would consolidate Canada’s purchasing power vis-à-vis global pharmaceutical companies, allowing us to get better prices on medications.

Naturally, these savings mean lost revenue and profits for the insurance industry, since they would no longer be collecting premiums for drug coverage. But every credible estimate has found that Canadians would save billions with a public plan–at least $5 billion per year and as much as $11 billion.

The Advisory Council on Implementing National Pharmacare, appointed by the Liberals in 2018, was clear in its final report that simply adding another patch to our existing piecemeal system of pharmacare would not work. It unequivocally recommended universal, single-payer, public pharmacare.

What remains to be seen is whether the government will follow the advice of its own appointed panel or heed the calls of industry as it finally tables its long-awaited Canada Pharmacare Actthis fall.

Recent reporting from The Breach has revealed how Health Minister Duclos intervened on behalf of the pharmaceutical industry to suspend drug-price reforms. To deliver on their promise of pharmacare, the Liberals will need to stop bowing to powerful corporate lobbyists and act in the interests of ordinary Canadians instead.