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Pharmacare would save us billions, but CETA an obstacle to its implementation

Pharmacare would save Canadians billions of dollars.

CBC reports, “A universal prescription drug plan could reduce total spending on medications in Canada by billions and cover everyone at an affordable price for taxpayers, health policy researchers say. …A universal public drug plan would reduce total spending on prescription drugs in Canada by $7.3 billion per year, the study’s authors say.”

“In Monday’s issue of the Canadian Medical Association Journal, researchers say the extra total cost to government of providing universal pharmacare could range as high as $5.4 billion a year, but would likely be about $1 billion, depending on exactly how much can be saved through bulk purchases of medications and other measures. At the same time, it would save the private sector the $8.2 billion annually it spends on prescription drugs, mainly through employee health plans.”

Steven Morgan, a professor of health policy at the University of British Columbia in Vancouver and one of the authors of the study, explains, “You save about 10 per cent by getting better generic prices, you save about 10 per cent [on] brand name prices and you save an additional 10 per cent by encouraging more cost-effective prescribing. Mine those three things together, you save 30 per cent of a very large budget. Therefore you’re saving billions of dollars.”

While universal pharmacare makes sense, CETA does not.

Council of Canadians health care campaigner Michael Butler has noted, “It is estimated that changes to patent protection for pharmaceutical drugs [in the Canada-European Union Comprehensive Economic and Trade Agreement] could end up costing our public health care system anywhere between $850 million to $1.65 billion annually. This is up to 13% of the total drug costs Canadians pay annually.”

He argues, “If CETA is ratified the likelihood of a national pharmacare plan becomes substantially more difficult (if possible at all) as we would also face billions of dollars in lawsuits under the investor-state dispute settlement (ISDS) mechanism. Pharmaceutical corporations that see pharmacare as an infringement on their right to profit from life-saving medications would be well positioned with this provision to stop such an initiative. The recent $500 million ISDS lawsuit under NAFTA against Canada by US pharmaceutical giant Eli Lilly highlights the difficulty of making cheaper generic drugs available to Canadians.”

Butler concludes, “If we want to implement universal pharmacare, then we must say no to ‘free trade’ deals like CETA.”

Further reading
‘Free trade’ deals a threat to health care for all (February 2015 blog)
Butler says CETA would undermine pharmacare (December 2014 blog)