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Parliamentary Budget Office to release a report on the costs of creating & administering a pharmacare program on Sept. 28

Health Minister Ginette Petitpas Taylor, Parliament Budget Officer Jean-Denis Fréchette, House of Commons Standing Committee on Health Chair Bill Casey.

Two federal reports are expected on pharmacare in the coming weeks.

On March 7, 2016, the House of Commons Standing Committee on Health (HESA) agreed to adopt “a study on the development of a national Pharmacare program as an insured service for Canadians”. In April of this year, the CBC reported, “The House of Commons health committee is studying the idea of national pharmacare and is expected to release a report with recommendations this fall.”

Furthermore, on September 27, 2016, the Committee requested that the Parliamentary Budget Office (PBO) estimate the cost of implementing pharmacare. The website for the Parliamentary Budget Office now notes that its report on the ‘Federal Cost of a National Pharmacare Program’ will be released on September 28.

As such, the Parliamentary Budget Office report on the costs associated with implementing pharmacare will likely be a critical component of the Committee’s study on the development of a pharmacare program.

This past May, Toronto Star reporter Susan Delacourt commented, “Pharmacare is not anywhere near the top of the federal government’s to-do list at present. Health Minister Jane Philpott has been saying repeatedly that her mandate, as far as it concerns drug prices and availability, is limited to getting better deals within the status quo. The Commons health committee has been studying the idea of a national pharmacare program off and on since late 2015. As recently as February, in fact, the committee was hearing from experts on how a national drug plan might fit into the Constitution. But neither Philpott nor her government has shown much enthusiasm for the committee’s work — at least so far.”

These reports will inform whether that has changed.

One significant change is that this country now has a new Minister of Health. On August 28, Ginette Petitpas Taylor, the Member of Parliament for Moncton-Riverview-Dieppe, New Brunswick, succeeded Philpott when she was appointed by Prime Minister Justin Trudeau to be the new federal Minister of Health.

As of September 1, Trudeau’s mandate letter to Petitpas Taylor has not been made public. (In April 2016, then-Health minister Philpott disappointed many when she stated that while she “actually, really, genuinely looked forward” to the Committee’s report, that pharmacare was not part of her mandate.)

The Council of Canadians continues to call on the Trudeau government to implement pharmacare. We have highlighted that the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) could cost our public health care system between $850 million and $1.65 billion annually because of extended patent protections for transnational pharmaceutical corporations, while implementing pharmacare would save $11.4 billion or more annually.

It is our hope that Trudeau’s mandate letter to Petitpas Taylor emphasizes the need for pharmacare. It is also our hope that Bill Casey, the Liberal MP from Cumberland-Colchester, Nova Scotia, who chairs the House of Commons Standing Committee on Health will be a strong advocate for pharmacare. And we hope that Parliamentary Budget Officer Jean-Denis Fréchette will oversee a report that highlights the cost-savings of “single-payer universal first-dollar prescription drug coverage under the Canada Health Act”.

For background information, blogs, a handimation video, and a petition, please see our pharmacare campaign webpage.


The Parliamentary Budget Office report to be released on September 28 is expected to provide the following information to the House of Commons Standing Committee on Health:

a. The total number and percentage of Canadians:

i. who are ineligible for full public coverage of all prescription pharmaceuticals outside of hospitals (under current provincial and federal programs), excluding catastrophic coverage, and who do not have equivalent private or employer sponsored coverage; and

ii. whose private or employer-sponsored coverage has been reduced or eliminated in the past 10 years.

b. Estimate the current Canadian annual total of:

i. employer contributions to employer-sponsored private insurance benefit plans in respect of prescription pharmaceutical coverage;

ii. employee contributions to employer-sponsored private insurance benefit plans in respect of prescription pharmaceutical coverage;

iii. total out-of-pocket payments by patients for prescription pharmaceuticals;

iv. direct and indirect government subsidies to private pharmaceutical insurance plans;

v. expenditure on prescription pharmaceuticals broken down by province or territory and by source of funding;

vi. individual expenditure on private pharmaceutical insurance coverage; and where possible, broken down by province or territory, by urban/rural, by age quintile and by annual household income quintile, for all of the above information.

c. Estimate the cost of (1) creating and (2) administering:

i. a single-payer universal first-dollar prescription drug coverage under the Canada Health Act; and

ii. a single purchaser and national distribution system for prescription drugs, possibly modeled on the Canadian Blood Services and/or other relevant models in Canada or other jurisdictions.

d. Assume that there is a single national formulary for prescription drugs with tiers based on the relative importance of the health condition treated, and the relative effectiveness of the drug in addressing the health condition, ranging from essential medicines for tier 1, and then proceeding to drugs that are less essential or equivalent but more costly in subsequent tiers.

In terms of the financing of a single-payer prescription drug coverage program, analyze the efficiency of an:

i. introduction of a payroll tax;

ii. increase in sales tax;

iii. increase in corporate and/or personal income tax; and

iv. introduction of a co-pay based on France’s SMR/ASMR model.

e. Discuss the implications of and the tools available for raising any additional revenue needed to finance such a program.

f. To the extent possible:

i. estimate of the total annual savings to the health care system from eliminating cost-related non-adherence to pharmaceutical prescriptions in Canada;

ii. estimate of the total annual savings achievable by a single-payer, as opposed to the present multiplicity of public and private payers, acting as the sole original purchaser of prescription pharmaceuticals in Canada; and

iii. estimate of the total annual savings from bulk buying, exclusive licensing, increased use of generic medicines, and evidence-based formulary.