Canadian pharmacare system must balance access and price issues: CLHIA

by Leo Almazora05 Oct 2018

The Canadian Life and Health Insurance Association (CLHIA) says the industry is ready to work with governments on “smart reforms” to Canada’s current system of drug coverage.

In its recent submission to Canada’s Advisory Council on the Implementation of National Pharmacare, the CLHIA said reforms to the current system should do three things:

  • Protect and enhance Canadians’ current health benefits;
  • Provide drug coverage for everyone; and
  • Consider affordability for consumers and taxpayers

The CLHIA agreed that Canadians face different out-of-pocket burdens based on their location and the extent of private coverage they have. It also acknowledged that drug prices in Canada are too high relative to other countries, with OECD data showing that Canada spent US$860 per capita in 2017 on pharmaceuticals, compared to the average of US$529 USD across all member countries.

“In fact, only three OECD countries (Japan, Switzerland, and the United States) spent more per capita,” the industry group noted.

The group recognized the importance of providing protection to those with either no coverage or inadequate coverage. However, it took the view that stakeholders should pursue “smart reforms” that “[build] on the strengths of the current system,” which means the benefits of private coverage shouldn’t be ignored.

“For instance, employer sponsored benefit plans typically offer coverage of 10,000 to 12,000 drugs,” the group said in its submission, adding that private drug plans are more likely to offer new, innovative drugs approved by Health Canada. “In comparison, public provincial plans offer coverage for between 2,000 and 8,000 drugs, with the majority offering around 4,000.”

The group also pointed to research suggesting that moving away from a workplace plan would put more than 7.7 million Canadians at risk of losing access to medications that aren’t included in their province’s drug plans. It estimated that 25 million Canadians access prescription medicines through their health benefit plans today, and those with depression, diabetes, cancer, and pain issues would face the greatest danger of losing access to much-needed medication.

To achieve lower prescription-drug prices, the CLHIA recommended that the pan-Canadian Pharmaceutical Alliance (pCPA) haggle down prices by leveraging the full buying power of both public and private payers. It also argued that retaining the current system with both public and private coverage would result in the least fiscal drag for governments during implementation of reforms.

The report points to two current systems of coverage that could be adapted singly or in combination at a national level:

  • The hybrid public-private model of universal coverage used in Quebec; and
  • The catastrophic-costs model used in British Columbia, Saskatchewan, and Manitoba, where public coverage kicks in once a certain level of out-of-pocket expense has been exceeded.


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