Art Sinclair, VP of Advocacy, Greater KW Chamber of Commerce
An issue that generated considerable media and public attention during the recent federal vote was a national pharmacare program. The election did not resolve the debate and it is clear that discussion will continue across Canada for a significant time frame.
The current focus centres on recent reports advocating that prescription drugs should be included in the Canadian medicare system on the same basis as hospital and physician costs. In July of this year, shortly before the start of the election campaign, a group of professionals across academia and the health care system released the report Pharmacare 2020 – The Future of Drug Coverage in Canada. The authors concluded that a universal and accessible plan should be fully implemented and operational by the year 2020.
The document contends that a national pharmacare system would save Canadians between $4 and $11 billion annually, a component that generates a high level of support among many constituencies. However the authors also include a recommendation that the federal government should provide 25 percent of the program costs using a number of instruments including corporate taxes, GST and premiums. The issue now becomes determining actual short-term expenses against possible long-term savings. The answers are not clear.
The Canadian Life and Health Insurance Association (CLHIA), in September 2015 correspondence to former federal Minister of Health Rona Ambrose, indicates that if prescription drugs were included in medicare on the same basis as physician and hospital costs an immediate $14.1 billion deficit could be created which Ottawa and the provinces would be forced to correct. The gap between the CLHIA and 2020 on costs is $25 billion, a considerable difference.
The CLHIA has also indicated that the current drug system can be reformed by leveraging the market to negotiate lower prices. Bulk purchasing of drugs can lead to major savings and a single government monopoly is not required. Association President Frank Swedlove has stated the life and health insurance industry stands committed to working with governments to obtain the available savings while preserving the benefits from competition and innovation that the private sector delivers to the marketplace.
Furthermore, the current system of approving drugs for reimbursement results in unequal access for Canadians and adds administrative costs across the system. The CLHIA supports the creation of a minimum formulary of drugs that all residents across Canada can access, and will provide an adequate level of coverage for both basic and high-cost specialty products.
A resolution supporting a national pharmacare strategy was tabled at the recent 2015 Annual General Meeting of the Canadian Chamber of Commerce in Ottawa. It was defeated by delegates in attendance. At recent Greater Kitchener Waterloo Chamber candidate forums held in the four local ridings, the pharmacare issue was on the agenda for questions. The responses and positions not only varied among the parties but also the candidates within each party.
On September 18 the Liberals issued a release highly critical of the NDP’s commitment to implement, through $2.6 billion over four years, a national pharmacare program. A quote from current Minister of Immigration John McCallum noted that “by siding with Stephen Harper to avoid a deficit at all costs, Mulcair can’t possibly pay for his multi-billion dollar promises like pharmacare. His promises sound good but there is no substance behind it.”
During the recent federal election campaign, veteran political analyst Tom Walkom called pharmacare one of the most important health care initiatives in decades. Therefore it is critical for Ottawa to analyze all options and impacts before reforming the current system which all stakeholders including provincial health ministers agree needs change.
Originally published in the January|February 2016 Advocate
