The federally convened Advisory Council on the Implementation of National Pharmacare is projected to complete its work this spring. While there are different versions of pharmacare under consideration, the primary model that many expect to come through is a federally managed universal public plan that will completely replace existing public and private drug plans.
That would be the ideal outcome for many pharmacare advocates who argue vehemently against anything less — specifically, any program that supports only certain segments of the population. One of their main points of contention is that high out-of-pocket costs for prescription drugs are forcing Canadians to choose between necessary medicines and basic necessities like food, heat, and rent.
“Indeed, a study published in the Canadian Medical Association Journal claimed that in 2016 nearly 1 million Canadians gave up food or heat to afford their medications,” noted Brent Skinner, PhD and CEO of the Canadian Health Policy Institute (CHPI), in a recent commentary.
But citing a new CHPI analysis, he contended that the claim of a dire tradeoff is grossly exaggerated. Using household spending data requested from Statistics Canada, the institute compared average household out-of-pocket spending on prescription drugs to income and selected expenditures in 2016.
“Average out-of-pocket spending on prescription drugs ranged from $390 per year for the lowest income households up to $1,224 per year for the highest income households,” Skinner said. “But cost was much more affordable as household income increased.”
He reported that while out-of-pocket prescription-drug costs reached 3% of income for the poorest households, that number was a more reasonable 0.4% for the wealthiest ones. Across every income decile, he added, the cost of food purchased from restaurants surpassed the out-of-pocket costs paid for prescription drugs.
“The same can be said for entertainment, TV and satellite radio taken together,” Skinner said. “And across every income decile, more is spent by households on tobacco and alcohol than is spent out-of-pocket on prescription drugs.”
Based on those figures and comparisons, he maintained that most people can actually give up a wide variety of discretionary expenses in favour of more necessary prescription-drug spending.
“And ultimately, out-of-pocket prescription drug costs are capped,” he said, noting the publicly funded safety-net programs that every Canadian jurisdiction offers to cover those without private drug benefits who are also not eligible for public drug plans.
While he acknowledged that public formularies do not cover many drugs, he argued that creating a national pharmacare system will only universalize the problem of spotty public drug coverage.
“The Council should focus on people in the lowest income deciles with uninsured costs that exceed 3 percent of household income,” Skinner said. “It is wasteful and unnecessary to force the entire population into a national single-payer publicly funded drug insurance plan.”