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As Canadians celebrate the Toronto Raptors' first basketball
championship victory for the country in the history of the NBA, the
government is moving towards making history for Canada again with
the potential roll-out of a universal, publicly-funded drug plan,
known as Pharmacare. A major initiative that would ensure equitable
access to essential medicines for all Canadians, especially to 19%
of the population (7.5 million) with no, or very limited,
prescription drug coverage.
When I first
wrote about Pharmacare in April, the exact framework and
implementation timeline of the program had not yet been announced.
The Advisory Council on the Implementation of National Pharmacare,
commissioned by Prime Minister Justin Trudeau's government, has now
issued its final report and there is no doubt the major initiative
will be transformative for the pharmaceutical industry.
Major shift in public vs private spending
The initiative would see individual provinces and territories
expand their public plans to provide prescription drug coverage to
every Canadian resident over a period of eight years. The added
costs, initially covered by the federal government, amount to an
estimated CAD15.3 billion (USD11.5 billion) per year as of 2027,
including ancillary savings. Although the council did not specify
the sources of funding, it recommended that additional revenue
should be extracted via taxation - a similar framework to that
which supports public coverage of hospital and medical care under
Medicare.
By 2027 the pharmaceutical landscape will be transformed as the
private sector is significantly reduced and Pharmacare expands to
cover 86% of overall drug spending. Throughout that time, the
private insurance industry would be expected to adapt their
business models to the changing landscape. Although they will no
longer be required to provide coverage for essential medicines
listed on the National Formulary, insurers will still be able to
provide supplemental coverage for drugs that are not listed on the
formulary - as well as coverage for copayments and/or other
benefits such as wellness programs, in addition to vision, dental,
and paramedical coverage.
Although the government has already taken steps to set up the
groundwork for Pharmacare with the creation of the Canadian Drug
Agency (CDA), one of the main prerequisites for the program; the
eventual successful implementation of this initiative hinders on
one critical fast-approaching day. On 21 October 2019, if Trudeau's
Liberal Party, and major Pharmacare proponents, fail to retain
majority government status in the federal elections, the program's
implementation could become highly uncertain. I guess, we just have
to wait and see: the elections might just prove to be a very tight
call, much like the NBA finals.
