INSIGHT: The Convergence of Policies: Pharmacare, pCHOs and Drug Pricing

On Wednesday, March 6, 2019, Finance Minister Bill Morneau and Health Minister Ginette Petitpas Taylor released an interim report on national pharmacare. Joining the two Ministers were members of the Advisory Council on the Implementation of Pharmacare, including its Chair, Dr. Eric Hoskins.

The Interim Report: Long on Principles, Short on Details

Weighing in at eight pages, the interim report focuses on overarching principles rather than making the case for any specific model for national pharmacare. Here are four key takeaways:

1. The interim report identifies three key challenges. First, too many Canadians cannot afford the prescription drugs they need. Second, access to prescription drug coverage is inconsistent across jurisdictions and populations. Third, Canada’s spending on prescription drugs is unsustainable.

2. However, the interim report does not give any indication as to what model will be recommended – and is silent on the merits of a single payer, universal, pharmacare program. Instead, comments offered this morning suggest that the Committee’s final report (due this spring) will identify a preferred approach for Canada

3. Due to its lack of specificity, the report doesn’t include any cost estimates for various potential approaches – nor does it offer any funding commitments from the Government of Canada.

4. The report is also silent on PMPRB regulatory reform.

Making the Case for Three Foundational Reforms

Despite its lack of prescription, the report outlines three specific steps that would support any national pharmacare model – regardless of which approach is ultimately selected:

1. Creating a “Super” Drug Agency. This move would effectively amalgamate the pan-Canadian Pharmaceutical Alliance and the Canadian Agency for Drugs and Technologies in Health. (A model first articulated in the initial pan-Canadian health organizations’ report authored by Dr. Danielle Martin and Dr. Pierre-Gerlier Forest.)

2. Developing a National Drug Formulary. This recommendation reaffirms a directive first given to the Minister of Health in 2015, and suggests the new agency outlined above would be responsible for its development and ongoing oversight.

3. Investing in Drug Data and Information Technology Systems. Enhanced and expanded IT and data systems are intended to improve all components of the health care system, including patient monitoring, drug plan management and post-market surveillance activities including capturing drug safety and effectiveness.

Signaling the 2019/20 Budget

Given the presence of two Ministers this morning – including Bill Morneau – it’s safe to conclude that this announcement is effectively an endorsement of the recommendations in the interim report. Based on that support, here are three key messages we expect to see in the federal budget scheduled for March 19:

1. A Reconfirmation of the Government’s Commitment to National Phamacare. Although the government will wait to provide further comment on specifics until after the advisory council releases its final report this spring, the budget is likely to contain lofty language about the increasing importance of this policy file. This sets the government up to position pharmacare as an election platform that lets the Liberals out-flank the NDP and differentiate themselves from the Conservatives.

2. A Commitment to Reforming the pan-Canadian Health Organizations (pCHOs). Representing nearly a quarter of Health Canada’s overall budget, the pCHOs are important not simply as a source of significant spending but also as cornerstones of potential future drug system reforms – especially CADTH. Although we don’t expect the budget to offer much in the way of granular reform plans, these efforts will heat up over the coming weeks.

3. A Focus on Controlling and Containing Drug Prices. The government will likely reconfirm its commitment to lower drug prices through reforms of the Patented Medicine Prices Review Board, a move that would echo both the 2018-19 Federal and the language in the interim report highlighting “innovation, value-for-money and the sustainability of prescription drug costs”.

Insights and Implications

At first glance, the release of the Hoskins’ Committee’s interim report appears as a significant step forward on the road to national pharmacare. However, a closer look reveals the report as a document that is very lean and very high-level. It offers ideas and proposals that have already appeared through separate government channels, and steers clear of making a hard case for a universal single-payer model.

What’s also striking is the timing of the interim report’s release. The Ministers took the podium minutes before the House of Commons Standing Committee of Justice and Legal Affairs was set to hear former Principal Secretary Gerald Butts’ testimony on the SNC-Lavalin controversy. The government is clearly focused on reminding Canadians that it believes in a clear set of progressive principles, and that it remains committed to delivering on its first mandate through October. Santis will be monitoring the March 19 budget closely, and paying particular attention to the important policy reforms we expect to take shape in this spring.