A PRESCRIPTION FOR CANADA: ACHIEVING PHARMACARE FOR ALL Final Report of the Advisory Council on the Implementation of National Pharmacare June 2019 A PRESCRIPTION FOR CANADA: ACHIEVING PHARMACARE FOR ALL Final Report of the Advisory Council on the Implementation of National Pharmacare June 2019 Health Canada is the federal department responsible for helping the people of Canada maintain and improve their health. Health Canada is committed to improving the lives of all of Canada’s people and to making this country’s population among the healthiest in the world as measured by longevity, lifestyle and effective use of the public health care system. Également disponible en français sous le titre : Une ordonnance pour le Canada : l’assurance-médicaments pour tous — Rapport final du Conseil consultatif sur la mise en œuvre d’un régime national d’assurance-médicaments To obtain additional information, please contact: Health Canada Address Locator 0900C2 Ottawa, ON K1A 0K9 Tel.: 613-957-2991 Toll free: 1-866-225-0709 Fax: 613-941-5366 TTY: 1-800-465-7735 E-mail: [email protected] © Her Majesty the Queen in Right of Canada, as represented by the Minister of Health, 2019 Publication date: June 2019 This publication may be reproduced for personal or internal use only without permission provided the source is fully acknowledged. Print Cat: H22-4/18-2019E PDF Cat: H22-4/18-2019E-PDF Pub: 190051 ISBN: 978-0-660-30975-0 ISBN: 978-0-660-30974-3 Table of Contents MESSAGE FROM THE CHAIR . 1 ACKNOWLEDGEMENTS . 5 EXECUTIVE SUMMARY . 7 LIST OF RECOMMENDATIONS . 17 1 INTRODUCTION . 25 1.1 The council’s mandate . 25 1.2 National dialogue . 26 1.3 Policy research and analysis. 28 1.4 What’s in the report . 28 2 DRUG COVERAGE IN CANADA TODAY . 29 2.1 The idea of pharmacare . 29 2.2 The evolution of medicare . 32 2.3 Public drug plans . 33 2.4 Private drug plans . 35 2.5 The changing drug landscape . 38 3 KEY CHALLENGES FACING CANADA’S PRESCRIPTION DRUG SYSTEM . 41 3.1 Fairness . 41 3.2 Cost . 44 3.3 Sustainability .. 48 3.4 Value for money . 51 3.5 The case for national pharmacare . 53 4 A PHARMACARE PLAN FOR CANADA . 55 4.1 Principles of national pharmacare . 55 4.2 Terms of coverage . 57 4.2.1 Who will national pharmacare cover? . 59 4.2.2 What drugs will pharmacare pay for? . .60 4.2.3 What costs will patients pay? . .60 4.3 The way forward . 63 iii A Prescription for Canada: Achieving Pharmacare for All 5 GETTING TO NATIONAL PHARMACARE . 65 5.1 Government collaboration . 65 5.2 Indigenous engagement . .66 5.3 Creating a Canadian drug agency . .68 5.4 Developing a national formulary . 73 5.5 Implementing a national formulary—starting with essential medicines . 76 5.6 National strategy on appropriate prescribing and use of drugs . 79 5.7 National strategy for expensive drugs for rare diseases . 80 6 FINANCING NATIONAL PHARMACARE . .85 6.1 Assessing the cost of national pharmacare . 85 6.1.1 The council’s drug spending model . .86 6.1.2 How drug spending will evolve with national pharmacare . .88 6.1.3 Savings in system wide spending under national pharmacare . 92 6.1.4 How the council’s projection of pharmacare costs compares with other estimates . 92 6.2 Financing national pharmacare . 93 6.2.1 Federal-provincial-territorial fiscal arrangements . 93 6.2.2 Revenue generation . 95 7 ENSURING THE SUCCESS OF NATIONAL PHARMACARE . 97 7.1 Legislation . 97 7.2 Transition support . .99 7.2.1 Provinces and territories . .99 7.2.2 Private insurance . 99 7.2.3 Pharmacists and the pharmaceutical industry . .100 7.2.4 Patient and public partnerships . 100 7.3 Information technology and drug data . 101 7.3.1 Upgrading drug plan IT systems . 101 7.3.2 Investing in drug data . 102 7.4 Supporting federal measures . 103 7.4.1 Streamlining drug reviews . 103 7.4.2 Regulating patented drug prices . 104 7.4.3 Supporting innovation and research . 105 iv Table of Contents 8 WHAT NATIONAL PHARMACARE WILL MEAN FOR CANADA . 107 8.1 For patients and their families . 107 8.2 For employees and businesses . 109 8.3 For the health care system and health care providers . 110 8.4 For citizens and taxpayers . 111 9 CONCLUSION . 113 ENDNOTES . 115 ANNEX 1: Biographies . 119 ANNEX 2: Order in Council . 123 ANNEX 3: National dialogue participants . 125 ANNEX 4: Overview of provincial and territorial drug plans . 134 ANNEX 5: Key characteristics of the pharmacare systems in comparator countries . 136 ANNEX 6: Drug spending model . 138 ANNEX 7: Other pharmacare models considered .. 164 ANNEX 8: Sex- and gender-based analysis . 168 v A Prescription for Canada: Achieving Pharmacare for All vi MESSAGE FROM THE CHAIR Canadians have considered the idea of universal drug coverage, as a complement to universal health care, for over five decades. For such a long-standing debate there is a surprising level of consensus. After hearing from many thousands of Canadians, we found a strongly held, shared belief that everyone in Canada should have access to prescription drugs based on their need and not their ability to pay, and delivered in a manner that is fair and sustainable. That’s why our council has recommended that Canada implement universal, single-payer public pharmacare. If the promise of universal health care is that Canadians are there for each other when we’re sick, by not including prescription drugs we’re placing a limit on that commitment. We may enter the hospital or the doctor’s office with equal access to health care, but we don’t go home with the same prospects for a healthier future, because prescription drug coverage varies greatly from person to person, and from province to province. There are too many people in our country who die prematurely or suffer needlessly in ill health because cost is a barrier to accessing prescription drugs. This gap—between our values and our reality—is growing because the nature of medicine is changing. When universal health care was first proposed, prescription drugs were important but not as commonly used and much less expensive. Today, drugs are the second-largest cost in Canadian health care, after hospitals and ahead of physician services. We heard from both public and private prescription drug providers that the current system is near the breaking point and in need of significant, even transformational, reform. The common refrain we heard from Canadians: we have to do better. Even though many Canadians have some form of coverage, Canada relies on a confusing patchwork of over 100 public prescription drug plans and over 100,000 private plans—with a variety of premiums, copayments, deductibles and annual limits. For a family or a single patient with a complex condition, those costs can add up to a significant barrier. 1 A Prescription for Canada: Achieving Pharmacare for All Approximately 20 per cent of Canadians have inadequate drug coverage or no coverage at all and must pay out of pocket. A recent study found almost 1 million Canadians had cut their household spending on food and heat to pay for medication. Another found that one in five households reported a family member who, in the past year, had not taken a prescribed medicine due to its cost. This uneven, inconsistent and tenuous patchwork in no way resembles a “system.” There is no single, uniform method in Canada for a child with asthma to get her inhaler. It depends on her family’s coverage. There is no one consistent way that all cancer patients obtain take-home cancer drugs or medicines for coping with chemotherapy side effects. Some pay more. Some pay less. Some don’t have access to those medicines at all. Over the past year, we saw provinces and territories taking action, working hard to provide better prescription drug coverage, but we also concluded that the federal government can and should do more, working in partnership with provincial and territorial governments, to ensure all Canadians can access the medicines they need. There is a cost to universal pharmacare and we understand that governments have fiscal limits. But universal, single-payer, public pharmacare can save billions by lowering the price we pay for prescription medicines and by avoiding the greater costs that accumulate when a manageable condition becomes a serious health crisis or when complications develop because someone could not afford to take medicine as prescribed. It might be the person recently laid off who stops taking medicines for preventing heart attack or stroke. They don’t feel an immediate, daily difference when they take those pills. So, they question the expense when money is tight. They mean to get back on the medicine when they get back on their feet. But time runs out. They end up in an emergency room in crisis. They may now need ongoing home care. Any return to work is delayed or maybe never happens. Barriers to accessing prescribed medication can and do result in additional visits to the doctor’s office, emergency departments and hospital inpatient wards, all costing our society much more than the cost of that preventive medicine. Improving access to prescription medicine improves health outcomes, reduces health care visits and saves billions in downstream health care costs. Our current fractured system also weakens Canada’s negotiating position with pharmaceutical companies. We pay some of the highest drug prices in the world. Other countries with universal pharmacare get better deals for the same drugs. Without price reductions, our public and private drug plans will continue to be strained.