Rapid Recap: Pharmacare Legislation Tabled in Ottawa Today
February 29, 2024- Pharmacare legislation tabled, path ahead to tangible implementation offers a long runway with many off-ramps. While this legislation may provide a starting point, it is unlikely to set in motion the necessary restructuring of PT drug plans toward a universal, single-payer approach to prescription drugs coverage.
Today, the Honourable Mark Holland, Minister of Health, introduced Bill C-64, An Act respecting pharmacare (Pharmacare Act), which proposes the foundational principles for first phase of national universal pharmacare in Canada and describes the Government of Canada’s intent to work with provinces and territories (PTs) to provide universal, single-payer coverage for a number of contraceptives and diabetes medications.
Bill C-64 also details the new Canadian Drug Agency work towards the development of a national formulary of essential medicines, develops a national bulk purchasing strategy, and supports the publication of a pan-Canadian strategy regarding the appropriate use of prescription medications. These are all foundational pillars of the NDP/Liberal Supply and Confidence Agreement that has maintained the support of the government, and continues to ensure the agreement is supported by both parties for the foreseeable future.
Key Legislation Highlights
- Pharmacare Definition: “A program that provides coverage of prescription drugs and related products.”
- Purpose of the Legislation: To “guide efforts…with the aim of continuing to work toward the implementation of national universal pharmacare.”
- Respecting PT & Indigenous Jurisdiction: The legislation establishes that the federal government is fundamentally respecting sub-national governments and Indigenous communities’ jurisdiction in health care, specifically stating that the legislation is intended to establish the Government of Canada’s commitment “to collaborating and maintaining partnerships with them to support their efforts to improve the accessibility and affordability of prescription drugs and related products.”
- No New Specific Funding: The legislation refers to the existing commitment funding for drugs for rare diseases, and does not commit to any new funding or specific dollar amounts. Notably, the legislation indicates that “the funding for PTs must be provided primarily through agreements with their respective governments”, implying that a federal direct delivery program is off the table.
- Payments: The legislation establishes that in the situation that there is an agreement with a PT, that payments are made in order to increase any existing public pharmacare coverage and provide universal, single-payer, first-dollar coverage for specific prescription drugs and related products intended for contraception or the treatment of diabetes.
- Canada Drug Agency Role: The legislation acknowledges the largely existing role of the Canadian Association of Drugs & Technology to provide advice on (a) clinical effectiveness & cost effectiveness (b) products that should be included in prescription drug coverage plans (c) collection and analysis of data (d) information and recommendations on appropriate use of prescription drugs, and (e) improvements to be made to the system (i.e., coordination).
- Mandatory Requirements in the Legislation: The legislation establishes requirements for the Minister to do the following after discussions with PTs and within a year of the legislation’s Royal Assent (i.e., passage):
- National Formulary: Request that the Canada Drug Agency prepare “a list of essential prescription drugs and related products” that would inform the development of a national formulary.
- Bulk Purchasing: Request that the Canada Drug Agency develop a national bulk purchasing strategy (with no timeframe for implementation).
- Appropriate Use: Publish on the website a pan-Canadian strategy regarding appropriate use. The Minister may request that the CDA prepare a progress report no later than the third anniversary of the strategy’s release.
- Committee of Experts: Establish a committee to make recommendations for “respecting options for the operation and financing of national, universal, single-payer pharmacare (this particular deliverable is due 30 days after Royal Assent).
Additional Details
Reaction from PTs
- Alberta Health Minister, Adriana LaGrange, said that her province planned to opt-out of a national program, instead looking to get their per capita share of funding in cash.
- Quebec also intends to pull out of a national program because they already have a provincial drug plan.
- British Columbia Health Minister, Adrian Dix, welcomes a national pharmacare program, however, B.C. has already been offering free contraceptives since April 1, 2023.
- Ontario Health Minister, Sylvia Jones, said she would have to wait and see the details of the federal government’s new pharmacare deal before committing to it.
Contraceptives
The Government of Canada announced that their intention is to, following agreement with PTs, ensure people in Canada have access to a comprehensive suite of contraceptive drugs and devices to choose from according to their medical suitability and personal circumstances.
This includes oral contraceptives, copper and hormonal IUDs, injections, implants, rings, and morning-after pills.
The Government of Canada will be launching discussions with PTs on providing universal, single-payer coverage based on the list of contraceptive drugs and devices in the backgrounder.
Diabetes
The government announced its intention to provide universal, single-payer coverage for a range of diabetes medications in collaboration with willing PTs. In addition, the Minister also announced the government’s plan to establish a fund to enable work with PT partners to support Canadian’s access to supplies that diabetics require to manage and monitor their condition and administer their medication, such as syringes and glucose test strips.
If implemented, the government announced that, following agreement with PTs, diabetics in Canada will have access to first-line treatments for diabetes that lower blood glucose levels, including:
- Insulin, which is used by patients with type 1 and type 2 diabetes. Insulin can cost in the range of $900-$1,700 per year, depending on the type and dosage required.
- Metformin, which is used by patients with type 2 diabetes. Metformin can cost about $100 per year.
- Medications often used in combination with insulin and metformin by patients with type 2 diabetes, including Sulfonylureas, and SGLT-2 inhibitors. The cost of these medications can range from approximately $100 to over $1,000 per year.
The Government of Canada will launch discussions with PTs on providing universal, single-payer coverage based on the list of diabetes drugs in the backgrounder.
Santis Insights
- Today’s update amounts to an incremental, but not transformative, change in the federal role in delivering drug coverage. After years of waiting for a federal position, the federal definition of pharmacare is limited to direct funding programs that enable PTs to expand coverage only for two indications (contraceptives and diabetes), and only if PTs choose to do so.
- The legislation is largely enabling language. The legislation is structured to require that the Minister “request”, “inform”, “recommend” – but not do or implement. This provides the government maximum flexibility with little financial or policy risk.
- Criteria for accessing federal funding will not be palatable for most PTs. The criteria of agreements hinted at (i.e., having a high bar of first-dollar coverage), provides PTs limited room to maneuver on specific criteria that could improve their existing programs. This language – for most if not all PTs – means any potential agreement is likely dead on arrival, with the exception that B.C. and Manitoba may be willing to engage.
- Attempt to move forward rare diseases funding before additional funding commitments. With no notional funding identified in legislation – other than providing the ability for the Minister of Health to enter into agreements – the legislation indicates that the drugs for rare diseases commitment is a first step. To date, no PTs have signed an agreement to receive this funding and undertake activities. Also, funding for rare disease drugs seems incredibly disconnected from a program commitment on diabetes and contraceptives.
- Risk free approach for the federal government. This is a safe piece of legislation for a federal government that does not want a significant expansion to federal responsibility over public drug coverage, while still maintaining support for the Government in Parliament for the foreseeable future.
- Leveraging the P.E.I. agreement, but perhaps not learning from it. The Government of Canada established a funding agreement with P.E.I. in 2019 to improve drug coverage. That arrangement saw P.E.I. assess its most pressing needs to improve the universality of their public drug coverage – resulting in P.E.I. lowering co-pays and adding new drugs to their formulary. Notably, under the proposed legislation, the Government of Canada through Parliament are establishing what PT priorities are, not PTs themselves.
- The approach is dependent on PTs. The legislation does not enable the federal government to proceed independent and unilaterally, and in fact, it re-establishes PT jurisdiction over publicly-provided prescription drug coverage.
- Impact on private drug plans is unclear. The legislation indicates that funding is for “dollar-first” and “single-payer” – and this language is used interchangeably. It will be difficult to assess the impact to any private drug plan until an agreement is in place with the federal government and a PT government.
- Is this actually what was envisioned by the Hoskins report? The legislation acknowledges the Hoskins report as a guide to pharmacare implementation and takes further steps to develop a formulary of essential medicines as envisioned by this report. However, the legislation’s focus on expanding coverage for two conditions (with a high degree of specificity on drugs to be covered) is much narrower than what Hoskins called for. While it may provide a starting point, it is unlikely to set in motion the necessary restructuring of PT drug plans toward a universal, single-payer approach to prescription drugs coverage.
- Expert committee. The requirement for the Minister to establish a committee of experts to make recommendations on the operation and financing of a national, universal, single-payer pharmacare in Canada is questionable, given that a committee with a similar mandate was created only five years ago to provide the government with a roadmap on pharmacare implementation.