Jordan: Every time a Canadian brags about our health care and whatever our grapes with it, most of us have probably done that. It should be noted that there has always been a missing piece. The health care itself is almost always totally free. The drugs though it depends, it depends on a whole bunch of things and if one of them breaks wrong, you can find yourself out of a whole lot of money very quickly or find yourself unable to afford medicine that you need. This is not an easy problem to fix, but when the Advisory Council on the Implementation of National Pharmacare released its recommendations last week, they were greeted with both hope and trepidation. Hope because their plan is as ambitious as anyone who believes in universal health care could ask for, and trepidation because this is big government at its biggest, and there are billions of dollars in tax money at risk if we don’t get it right. So will Canada really adopt a national, single payer universal pharmacare plan? How would that change life for Canadians? How likely is it to actually get over the finish? And given that these recommendations come months before a federal campaign, how are they going to be politicized? Because that’s what happens now.
Jordan: I’m Jordan Heath Rawlings and this is The Big Story. Cormac McSweeney is the Parliament Hill reporter for CityNews for Rogers Radio. As always, nice to talk to you.
Cormac: Good to talk to you too.
Jordan: Can we start with a basic explainer because this is a term that is going to be hot over the next few months. What is pharmacare? What are we actually talking about when we say that?
Cormac: Well pharmacare is basically the universal coverage of prescription drugs, because the way we have our universal health care system as it stands, basically, you can go in to see the doctor, you can go to the hospital if you have an emergency, and a lot of what happens there with the doctors, with the medicines being used to help you out that’s usually covered under your provincial health insurance plan. But where that coverage stops is when you walk out of those offices or facilities and then you go to try and get a prescription drug that’s been given to you by a doctor and you go to I don’t know, Rexall or Shoppers Drug Mart somewhere like that, and you try and get that prescription filled. For that you don’t get that covered through your regular taxes, you have to either have a public drug plan or possibly a private drug plan, maybe through your work or maybe you pay out of pocket for that drug plan like a Blue Cross or something like that. And so where Pharmacare sort of would kick in is if we had a federal national pharmacare program that would basically take over the drug plans, and the patchwork of drug plans that we currently have.
Jordan: Explain those patchwork drug plans a little bit more. How random are they? How spread out are they? Do we have any idea how much of Canada they cover?
Cormac: Yeah, so each province is in charge of dealing with health care in Canada, and right now, as it stands, Canadians rely on more than 100 different government run drug insurance programs. When it comes to private drug insurance plans, that goes up to 100,000 different plans.
Cormac: Yeah, it’s a lot, but it’s largely provided through your employer, and so, you know, a lot of people get a little bit taken off of every paycheck to go towards their private drug insurance, and so that’s the way a lot of Canadians actually get their drugs paid for or a majority of the cost of their drugs paid for at the moment. There are other Canadians who turned to private insurers if they don’t have it through work, maybe they’re working part time or they might not be working at all. But they are able to get a drug plan through some private insurer so they can pay out of pocket that way to have some sort of coverage so they’re not getting hit with these massive costs for whatever drugs they may need. And then each province sort of has its own system in terms of assisting people. So Ontario had a system where people under the age of 24 would have a number of different basic drugs covered. You have other provinces like BC, Manitoba etc. that try and help out a lot of people who are low income, so a lot of their costs will be offset as well, and then you have larger provincial plans, like through Quebec, where more and more people, more and more citizens, have some public coverage. But right now it’s just every province, and every Canadian has different types of coverage, and the goal, or at least the intent of bringing in a national pharmacare plan, is to bring that all under one roof, if you will, so that everybody has equal access to the drugs that they need.
Jordan: So while those patchworks might be crazy, unwieldy and disorganized, do we have any idea how well they are working? Do we know that one national plan is something that’s badly needed, that Canadians are actually being left out in the cold?
Cormac: There has been a push for a long time for some sort of pharmacare plan nationally, and this is not a new issue to pop up, but the fact that we’re seeing a government of the day pushing this is new because we haven’t seen this for some time, this type of debate. There are some disturbing stats to go along with the report that came out from this advisory council on National pharmacare. They did some studying into the issue of the current patchwork system, and they say that 7.5000,000 people in Canada have either inadequate drug coverage or no coverage at all, and they cite other studies to show that almost 1,000,000 people had to cut their household spending on food, or heat, or rent to pay for their medication, and one in five households reported a family member who in the past year didn’t take a prescription medicine simply because of its cost. So when you hear those stats, it is quite disturbing. It sounds like a lot of people are affected by the sort of costs. So it definitely paints a bleak picture of the prescription drug situation that we have here in Canada when so many Canadians are struggling to pay for those, and a lot of those people, and this is again not a new issue, it’s been well talked about for a number of years. But a lot of those people who struggle are people who are recently retired, who lose their drug coverage under their employers that they used to have for years, and now all of a sudden they’ve got to find new ways to make sure that they get their prescription medication at a time in their lives where they probably need it more than ever.
Jordan: So if this is such a huge issue, and clearly I didn’t know those stats, I’ve been lucky enough to be covered under my work plan for my entire career. But if enough Canadians can’t afford these drugs, or are making drastic changes to their spending in order to afford them, why is it only now, in 2019 that there’s an actual push for this? Can you explain a little bit of the history and has this been tried before? Where are we on that?
Cormac: I believe, you know, conversations about a national pharmacare plan have gone back decades, back to the forties and the sixties. Actually, you know, when Tommy Douglas was sort of being the father of universal health care here in Canada, one of the conversations that did pop up at the time was pharmacare, and this is being called sort of the missing piece to the healthcare puzzle for Canada because, you know, prescription drugs are important, it’s a part of healthcare, it’s a vital aspect to our health and so it’s not a new conversation. We’ve been having these conversations for years. I think part of the issue is the cost. If you truly have a national pharmacare plan that has run through the federal government in association with the provinces who are responsible for healthcare in their jurisdictions, you know, it’s going to be expensive. It’s not going to be a cheap venture, so this has turned a lot of people off. But this advisory council has said that, you know, right now prescription drug costs are unsustainable, they’re going out of control, and so action needs to be taken now, and that’s why there’s a sudden push. Last year, Canadians spent $34,000,000,000 on prescription drugs. That’s a lot of money, and so the estimates that this advisory council came out with, I believe it’s by 2027 they’re expecting that to rise to $55,000,000,000, and so the advisory council says this is unsustainable. Action needs to be taken, and what their pitching to Canadians and to the federal government is a single payer universal pharmacare system for our country.
Jordan: So the report recommends a universal, single payer federal pharmacare program. What other options were on the table and how different is that program from some of the other ones that have been proposed or considered, and what would it look like?
Cormac: Well, there were two schools of thought on this about where this advisory council could go. It is expected that they could go the route that they did and suggest a national, single pair universal pharmacare program so that every Canadian regardless of where they live, has equal access to the prescription drugs they need. Or they could have gone a different route, which was the sort of fill in the gap approach, and that’s the approach that;The idea there is that basically, if you already have coverage through a public system or a private insurer like through your work, you’re not going to see any difference at all, that will maintain and continue. But if you don’t, if you don’t have any coverage or it’s completely inadequate, then maybe pharmacare could sort of kick in at that point, and help give those people a leg up so that they’re not, you know, paying out of pocket, or choosing between rent or groceries, and their prescription medications. So that was the other option that they could have taken, and the chair of this Advisory Council, Dr Eric Hoskins, and it should be noted right now that Dr Eric Hoskins was the former Ontario health minister under the Kathleen Wynne government, and he was tasked with this advisory council to sort of come up with these options. But he said they didn’t go the other route because the council feels that every Canadian should have equal access to the same prescription drugs, and right now, with a patchwork system that we have people in PEI have totally different coverage than people who live in BC so coast to coast, you’re seeing all these different plans, and if you just did a fill in the gap approach, that inequality would still persist across the country so some people with amazing private plans through their employer would have much better coverage than somebody who’s just getting, you know, the bare bones national pharmacare plan under the fill in the gap approach. And so what they wanted to do was just get rid of all the inequalities with a national pharmacare plan in which every Canadian would be able to basically make a co payment, and that’s the other big thing about all of this is not like all of your prescription drugs will be completely free. The pitches that they have co payments so that you are chipping in a little bit, and you know, a lot of people who have those employer driven private insurance plans will know that they get there, and you know the drug might cost 60 bucks normally, but you only have to chip in $6 because you chip in the 10% that it is out of pocket, and then the private insurance covers the 90%. Under this plan, there are two levels of drugs that would be classified, and then you would have to pay out of pocket a small amount to cover either of those drugs. First, essential medicines that would be about $2 per prescription. If it’s all other drugs that would be included on this national formulary, which is a long list of prescription drugs that should be covered under this plan, that would cost you about $5 per prescription, and they’re also suggesting that each household, and not just each person, each household has an annual limit of paying $100 per year, so you won’t pay any more than 100 bucks, and that’s again to get rid of the income inequality, to get rid of inequality across the country of different patchworks of plans, trying to make sure that everybody has the same access and that it’s an affordable access to these prescription drugs. But there does have to be some sort of offset because this is going to be an expensive program moving forward, with the advisory council saying it could cost up to $15,000,000,000 a year when it comes to the full implementation by the year 2027.
Jordan: So what is the timeline on this then? First of all, I assumed that the government, whoever wins the election, will have to implement it. But then, assuming we move forward, what are we actually looking at?
Cormac: So if these recommendations from the advisory council are accepted as they are, and whatever the government is after the fall, election decides, yep, we’re just going, we’re going plough through with this plan. Basically, the council is advising them to start doing all the administrative work right now. Some of it’s actually already begun in the last budget, in the spring budget, the Trudeau government created the National Drug Agency to create a list of drugs that would be covered under this, but also to negotiate with pharmaceutical companies to get a lower cost for those drugs. All that work should be done now. The plan, as it stands under this final report, is for the national pharmacare plan to begin by January 1st 2022. Now that would be a limited number of drugs, essential drugs that would be covered under that, and then slowly, it would gradually be growing over the following five years till 2027 where the counsel suggests that the government have full implementation of a pharmacare plan. It is a big undertaking to try and do this. There will be a lot of negotiations with the provinces, so there’s a lot of work that would have to go into this, and that’s why they’re suggesting a more phased in, gradual approach just because to implement everything right away might be a tall order.
Jordan: You mentioned that the government that wins the election would have to want to move forward with this and that Trudeau’s Liberals have already done some work here, so I am assuming they support the recommendations. But how were they received in Ottawa from both the Liberals and their opposition?
Cormac: That’s the funny thing. You would assume that the liberal government who asked this advisory council to come up with these recommendations would be accepting and all for every single one of them. But we haven’t heard that yet from the Trudeau government. The health minister came out and said, we accept the report, we appreciate the hard work, we’ll review it, and we’ll get back to you. So we don’t know exactly what their plan is at this point, whether they accept all the recommendations of this final report, and we’ll use this as the framework for their plan moving forward for their election platform or maybe they might decide, you know what? That’s not exactly what we were hoping for, and we think that this other approach might be better, whatever that may be. So we’re still waiting to see what the Liberals plan to do with pharma care, but there are other parties with other ideas on pharma care. The NDP saw this report and they took it as vindication for their position for years that the NDP has been calling for a pharmacare program. That’s not a new call from them, but Jug Mead Singh has said that he wants to do this way faster. The big problem for the new Democrats is the timeline on this. They don’t want to wait till 2027 for full implementation, in fact, they say they can get this done by the end of next year. So that’s a lot of fast track, and we are already talking about how administratively this will be a tall order. But the NDP says it can get this done a lot quicker than the timeline the advisory council has set out. The Conservatives, on the other hand, are not too pleased with the recommendations. They say that the added cost to this, which again by full implementation by 2027….
Jordan: Right, not insignificant.
Cormac: No it’s $15,000,000,000 a year. The adviser counsel argues that there will be savings that happen under this, and we can get into that later about how they work out the costing on all of this. But they say that this is money already being spent by Canadians in the $34,000,000,000 they’re spending every year anyway on prescription medication, so $15,000,000,000 by the feds is just the same money that would come. But the conservatives say that ;ook, this $15,000,000,000 a year that we’re going to have to pay for pharmacare that’s going to be through taxes. You’re going to get taxed more, it’s not going to be fair and they’ve got a better approach. And that approach is the fill in the gap approach that we had discussed earlier. They are looking…. and they haven’t released the full details of their plan, but their health critic did tell us in advance of the release of this report, that they are looking at that fill in the gap approach to give people help, and to help the most vulnerable who do not have any drug coverage, who are low income, who need that extra help, and they’re looking more at reducing the cost through bulk buying at a national level and creating a plan for those who need it the most. But allowing the current patchwork system of you know, current public private patchwork system to basically remain in place.
Jordan: Do we have any idea how much money we’re talking about here to the average Canadian?
Cormac: Yeah, so we’ve mentioned that you know, it’s going to cost the government about $15,000,000,000, and we’ve talked about how it costs $34,000,000,000 for Canadians to pay for their prescription drugs in 2018 alone. But the argument from the advisory council is, even though we’re going to see likely an increase in government spending on this, Canadian households and Canadian companies will actually save money under Pharmacare. They argue that due to the improvements under pharmacare, there could be a $5,000,000,000 annual savings, and that will result in about $350 per year in savings for Canadian families, and they say that business owners will actually save over $750 by not having to provide those private insurance coverage that we currently have in place. So there’s an argument being made that this will actually save money, and the $5,000,000,000 annual savings for the overall cost to our healthcare system is really about the trickle down effect of pharmacare, and so the argument is that if Canadians get access to the drugs that they need and you don’t have, like 7,000,000 people in our country struggling to afford their prescription drugs, they’re going to be healthier as a result of taking those prescription drugs. And because they’re healthier, we’re going to see less visits to the emergency room, we’re going to see less people having complications as a result that frees up time for doctors both at the physician level and in the hospitals. And as a result, it will lead to efficiencies in the health care system, possibly reduce wait times, but also just overall bring down the administrative costs of our current healthcare system. And so that’s the argument from the advisory council as to why we could see even a $5,000,000,000 annual saving from what the cost could be if we left the current patchwork system in place.
Jordan: With all the issues on the table, how big is this one likely to be? I mean, on the one hand, it seems like it kind of gets that fundamentally what we like to brag and think well of ourselves about in Canada, so it might be a big motivator. On the other hand, you mentioned that it is going to cost a lot of money.
Cormac: I think there’s been a big focus from all parties in the lead up to this election about affordability in Canada, whether that be housing, the carbon tax or pharmaceutical drugs. Everyone’s focusing on the pocketbooks of Canadians, which it often is at election time, but there is really a rallying cry right now about affordability. It’s been addressed by each party in different ways, and I think pharmacare will be a big, big piece of that discussion because this is a huge promise. If the liberals you know, let’s just hypothetically say the Liberals decide to just take the advisory council report as it is, and use that as their platform call. You know, that could mean every Canadian doesn’t really have to worry about the cost of their drugs when they show up at the pharmacy. They only have to worry about $2 or $5 which for some can be a lot depending on their medical needs as well. But at the same time, it might be a lot cheaper than what they’re currently going through but that could mean higher taxes in a way, and that’s the argument from the conservative side that you don’t want to pay higher taxes, and this is not the best approach. So I think we’re seeing two different visions come out of this pharmacare debate. But I think in the end, it’s something that a lot of people are worried about. There are a lot of seniors, we’ve got an aging demographic right now, a lot of people have lost their employment benefits that they once enjoyed, and so it’s going to be a big debate. The Canadian Association for Retired Persons came out in full support of the advisory councils recommendations, and that senior demographic in terms of voters….
Jordan: They vote!
Cormac: They vote and they tend to lean conservative, and so, with the conservatives taking a different approach on this, it’ll be interesting to see what their plan is because we don’t have all those details yet, either. We just have sort of a vague promise, but I think it’s going to end up being a big fight on this.
Jordan: I feel like I end every conversation with you this way now, but I guess we’ll see in October Cormac.
Cormac: Yes, indeed.
Jordan: Thanks a lot.
Jordan: Cormac McSweeney is our man on Parliament Hill, and that was The Big Story. If you want more from us, almost a year of big stories, you can find them at thebigstorypodcast.ca, and you can hit us up on Twitter @thebigstoryfpn, and we would love it if you’d rate us and review us on Apple Podcasts, or just check us out on Google, Stitcher, Spotify, subscribe for free. Thanks for listening. I’m Jordan Heath Rawlings, we’ll talk tomorrow.
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