Opinion: In pharmacare, affordability isn't always more important than access

The federal government offers employees top-notch insurance. If that kind of drug coverage is good for them, why not for the rest of us?

Healthy Debate 6 minute read November 3, 2021
drug prices pmprb

"Introducing regulations to severely reduce new medicine prices will not secure access to costly lifesaving medicines. Just the opposite." (Getty)

by Nigel Rawson and John Adams

Too many Canadians have no insurance for prescription drugs or insufficient coverage. Others can’t afford copayments and deductibles required by public and private insurers. Too few medicines are insured, especially by government plans.

Since first elected, some in the Trudeau government have focused on affordability and accessibility of prescription medicines. Affordability is the false premise of new regulations for the Patented Medicine Prices Review Board (PMPRB), the federal tribunal whose role is to prevent time-limited monopolies for new medicines being abused by “excessive” prices.

Implementation of these regulations, “intended to provide transparency and predictability,” has been delayed three times, likely due to legal challenges by drug developers and patient organizations. So far, two court decisions have struck down a requirement for manufacturers to report confidential discounts and rebates offered to insurers; a constitutional challenge is ongoing against the new regulations. This summer, the Federal Court of Appeal admonished the PMPRB, nullifying its ruling against Solaris on pricing and questioning whether the Board had helped itself to a power it does not have.

Decisions against the PMPRB are being appealed. What happens if appeals succeed and new medicine prices are severely reduced in Canada? Those who want Canadian drug prices radically reduced will be pleased, but will patients and physicians?

Health Canada and the PMPRB say the new regulations will not deter manufacturers from launching new medicines here, pointing to western Europe where they claim medicines are less expensive but launched quickly. This ignores: (1) western European countries are a market 10 times Canada’s; (2) all have at least one multinational manufacturer’s headquarters or major research and production facilities; and (3) their governments recognize the economic importance of the biopharmaceutical industry.

In contrast, no major multinational manufacturer is based in Canada, few company research and production facilities exist here, and Ottawa’s attitude toward the industry has been antagonistic for years. Drastic price cuts in Canada will negatively impact multinational companies’ business worldwide. The result: manufacturers will delay launching innovative medicines in Canada – in some cases, until being genericized – or decide not to launch them here at all.

Canada will be placed on par with New Zealand as a potential marketplace for pharmaceuticals. Developers see New Zealand as a low-priority market due to its tiny population and government policies making it difficult to get a new drug insured. Consequently, manufacturers apply for marketing approval for few medicines in New Zealand and only do so much later than in Canada and other countries.

Access by patients to medicines has taken second place behind affordability in Ottawa’s agenda, which apparently is the linchpin to introducing universal pharmacare. The Liberals’ advisory council recommended pharmacare initially cover a “carefully chosen list of priority essential medicines.” In other words, let’s further ration access and ignore those needing medically necessary but unlisted medicines.

If new medicine prices are severely reduced, will patients and physicians be pleased?

Medicines for common illnesses are essential and lower-income Canadians should not have to choose between paying for them or other necessities. But this must not be the only purpose for introducing national pharmacare. Novel medicines that significantly improve the lives of people suffering from once untreatable, life-threatening disorders are also essential. However, their cost is often beyond the ability of Canadians to pay as individuals. Access to costly lifesaving and life-changing medicines should be high among the goals for genuine reform.

Introducing regulations to severely reduce new medicine prices will not achieve this access. Just the opposite. New Zealand’s fixed drug budget and requirement for price concessions led to it covering only six per cent of 403 modern medicines publicly funded in 20 OECD countries from 2011 to 2018. As of April 2020, nearly 100 new medications had been recommended for coverage in New Zealand but remained unfunded: 15 per cent were cancer therapies; 12 per cent were rare disorder drugs; and 49 per cent had been waiting for five years or longer for public funding. Lack of coverage leads to limited medicine choices that can have an adverse impact on health outcomes.

The present situation in Canada is that all provincial public plans provide at least some coverage for seniors, low-income residents and persons with disabilities, and most also have means-tested programs to protect against catastrophic costs. However, coverage is subject to out-of-pocket copayments and deductibles that vary by province but must be paid before financial assistance can be claimed.

The biggest difference between provinces is in how many medicines are covered. Quebec’s public plan, the most comprehensive, covers around 8,000 products, Ontario’s about 5,000, but some provinces cover as few as 2,000. Where they are covered, medicines – especially new, costly ones – are often limited to patients whose health status satisfies the drug plan’s criteria for access. This would be reasonable if the criteria appropriately selected all the patients most likely to benefit from the medicine, but the conditions sometimes make little or no clinical sense to the specialist physicians who treat the patients and are often so restrictive that only one or two patients qualify.

Despite the Liberals’ desire for national pharmacare, most provincial governments are unenthusiastic but are willing to accept federal help to pay for costly new medicines. The $35 million for Prince Edward Island to improve its drug coverage (the poorest in Canada) allowed the Liberals to promote it in their election platform as the first agreement to accelerate universal pharmacare, but this seems to be just a stopgap.

Introducing regulations to severely reduce new medicine prices will not secure access to costly lifesaving medicines. Just the opposite.

Ironically, Ottawa has a model for national pharmacare. The federal government is Canada’s largest employer and its 300,000 workers, together with retirees and dependents, have top-notch insurance for every drug approved by Health Canada negotiated by their unions. If that kind of drug coverage is good for federal employees, why not for the rest of us? It would be expensive and its affordability is debatable, given the scale of federal spending on the pandemic. Nevertheless, one must question the fairness of Canadians experiencing poorer health outcomes due to their lack of access to medically necessary medicines because they don’t have the same quality of coverage as federal employees whose access is supported by their taxes.

Ottawa needs to work collaboratively with the biopharmaceutical industry and the provinces on solutions for Canadians with too little or no drug insurance and those requiring costly novel medicines. All Canadians need the federal government to have their backs in pharmacare reform.

Nigel Rawson is an independent researcher in Saskatoon and an affiliate scholar with the Canadian Health Policy Institute. John Adams is cofounder and CEO of Canadian PKU and Allied Disorders Inc. in Toronto and volunteer board chair of Best Medicines Coalition.

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