A Report Titled A Prescription For Canada: Achieving Pharmacare For All
Rather than a “fill in the gaps” model, the Advisory Council on the Implementation of National Pharmacare has recommended an expansive pharmacare regime that would replace existing public and private insurance plans with a single national framework.
Quick Highlights
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By 2022, governments would roll out an essential medicines national formulary and expand that formulary to be comprehensive by 2027.
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Provinces and territories would agree to national standards and ‘opt-in’ to the regime.
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All Canadians would transition onto a national formulary, from existing insurance plans, and private insurers could supplement coverage with drugs, not on the national formulary.
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The net incremental cost to the Federal Government would be $3.5B by 2022 and $15.3B by 2027.
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Generic substitution would be mandatory, and policies to support biosimilar uptake would be implemented.
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All out-of-pocket costs for drugs on the national formulary should not exceed $5 per prescription, with a co-payment of $2 for essential medicines and an annual maximum cost of $100 (for both a person or a household).
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The development, implementation and management of pharmacare would be done by an arms-length Canada Drug Agency, made up of representatives from federal, provincial and territorial governments.
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These reforms would proceed alongside proposed PMPRB regulatory changes and a dedicated national strategy to deal with expensive drugs for rare diseases – both of which the Council explicitly supports.
A Formal Response from Government Will Come Soon – But the PC and the NDP Parties are Both Opposed
Interestingly, the Federal Government did not participate in the Council’s press conference or release of its final report, unlike when Dr. Hoskins released his interim report in March, by leaving the Council to occupy today’s spotlight, the government is underscoring the fact that the Council report is advice, not official government policy.
At the same time, early indications are that the government is strongly backing the recommendations for a universal pharmacare program. In addition to government MPs circulating an infographic (below) calling for accessible, affordable drugs from all Canadians, the Minister of Health in a statement on Twitter after the release of the report indicated that the government agrees “Canada must move towards universal pharmacare”. In a subsequent media scrum, the Health Minister stated that the government will “carefully review” the report and its recommendations and again reiterated her commitment to PMPRB reform.
Immediately after the report’s release, the Conservatives, stated that they have zero confidence that the Liberals have the capabilities to implement such a significant plan, and that they would rather focus on initiatives like bulk purchasing and addressing the gaps in the system rather than implementing a whole new pharmaceutical regime. Arguing that Ottawa is not only overstepping the legitimate federal role in health care, but also assuming a plan far too complicated and expensive for its own good may resonate with those Canadians skeptical of the effectiveness, efficiency and affordability of “big government” programs.
The NDP has already objected to the proposed regime having any co-pay at all, and argues that the timelines are too long to implement an essential medicines formulary – let alone a comprehensive formulary. If elected, the NDP would roll out a complete pharmacare regime by 2020.
The Hoskins Report is only a Proposal and Many Key Decisions are Still to Come
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The relevance and impact of the Hoskins Report is directly connected to the re-election of the federal Liberals this fall. Even then progress will be slow: The report would require significant policy decisions to be made and implemented over a long period of time by the Federal Government.
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The Report’s recommendations are not binding. The government itself will now have to decide how ambitious it wants to be, how assertive it can be with the provinces, and how much money it wants to spend.
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Costing and financing continue to be the “elephant in the room”. The report argues that over time, money that would have been spent by patchwork public plans, private plans and patients dipping into their own pockets will be saved and redirected toward funding national pharmacare. This is a critical point because it allows the Federal Government to focus on “down the road” savings, rather than upfront net new spending.
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The Federal Government needs provincial and territorial buy-in, which costs money. It cannot be understated how much collaboration is needed from provinces and territories to achieve the vision laid out in the report – and how securing that collaboration will be expensive. However, by noting that “there was not a single province that wasn’t at the breaking point of sustainability, Dr. Hoskins” delivered a pre-emptive strike at any adversarial premiers tempted to suggest that the status quo is fine, and that a national pharmacare plan is overly ambitious, unnecessary and expensive.
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Any National Pharmacare plan will have to travel a long highway with many off-ramps. The Hoskins Report maps out a deliberate implementation plan that extends through 2027 – which means there remains a significant amount of time (and at least two election cycles) to influence the shape of any final policy framework.
The Hoskins Plan Will Now Move Through Four Distinct Phases
- Pre-Canada Day: Over the next two weeks, we expect the government to formally respond to this report, indicate its next immediate next steps – and potentially move forward with measures already in progress such as finalizing PMPRB regulations.
- Pre-Election Period: By the end of June, the government will no longer be able to announce new funding that hasn’t already been approved. As a result, after Canada Day any recommendations in the pharmacare report that have a fiscal impact will have to wait until after the next election. Instead, we expect the government to focus its efforts on integrating elements of the report into the Liberal pre-election platform.
- Election Period: During the election, look for the NDP and Liberals to duel for the title of “party with the most progressive and credible pharmacare policy”. The Conservatives, on the other hand, will look to position themselves as having a reasonable, modest and cost-effective approach to achieve the same end.
- Post-Election: Depending on what party emerges triumphant from election night (most likely October 21), the new Federal Government would then have a mandate to either embrace core aspects of the Hoskins Report – or shelve it entirely.