Canadians were promised universal pharmacare, What happened?

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Jordan Heath-Rawlings It began as a nation changing promise, and to be fair, so do most promises during campaign season, but when the liberal government first announced that it would begin, Investing in and planning for a national PharmaCare program, it was a huge deal. That would mean universal access to prescription medication for all Canadians, regardless of means. And when it became a key plank of the liberal NDP Supply and confidence agreement, it seemed just for a little while within reach, but then the lobbying started. And over the past couple of years, promises of a national PharmaCare program became instead a plan to significantly lower the cost of many prescription drugs for all Canadians. And then the lobbying continued. A plan was drawn up, then redrawn and redrawn, and now it’s still sitting there. And there have been resignations at the organization that helped design that plan amid accusations that the Liberals have caved to huge pharmaceutical companies. So what happened to Canada’s plans for PharmaCare or even just cheaper drugs? Was this impractical or was it just a retreat? What is still on the table right now? Would it make a difference to Canadians? And why haven’t the liberals implemented the reforms that were initially drawn up by the liberals? I’m Jordan Heath-Rawlings. This is the big story. Dr. Danyaal Raza is a family physician as well as an assistant professor with the University of Toronto’s Department of Family and Community Medicine. He recently co-wrote a piece in the Globe and Mail with former Minister of Health, Dr. Jane Philpot. Hello, Dr. Raza.

Danyaal Raza Hi Jordan.

Jordan Heath-Rawlings Thanks for joining us.

Danyaal Raza Thanks for having me on.

Jordan Heath-Rawlings Give us the lay of the land. I know everybody hears about the prices in the United States, but how do Canada’s prescription drug prices compare to the rest of the world and to our peer countries in particular?

Danyaal Raza Well, you know, we actually have some of the highest drug prices and actually drug. Costs in the world. You know, unfortunately, this is actually an area where we often medal, or we’re at least competing for a podium position.

Jordan Heath-Rawlings Hmm.

Danyaal Raza Uh, which is, you know, not a competition. We wanna win. We typically, depending on the year, have the third or fourth highest, uh, per capita drug costs in the world.

Jordan Heath-Rawlings So we are unfortunately an outlier. and where do prescription drugs sit in our universal healthcare system? How does it work in this country compared to, uh, other countries with universal medicine?

Danyaal Raza I think that’s a great question. And again, you know, this is not a great place where we stand out. We have the distinction of being the only high income country with universal healthcare system that does not include universal drugs. Uh, in fact, outside of doctors and hospitals, which is what Medicare covers, we really have a basically an American style system for drug coverage. About 60% of spending is, uh, private spending, which is a combination of out-of-pocket and private insurance, and about 40% is public.

Jordan Heath-Rawlings Do you think the majority of Canadians understand that or are they just part. Coverage through private means and, and don’t have to grapple with it unless they’re unfortunate.

Danyaal Raza I think that perhaps was historically the case, but as time passes and the cost of prescription drugs rises, more and more Canadians are dealing with this. You know, there’s a stat that’s already a number of years old that showed, uh, one in 10 Canadians just aren’t able to take medications, period, as prescribed, because of cost. That number is rising. We know with all the job losses that people experienced, uh, early on in the pandemic, that was felt by even more people. Right? There was even a, again, a pre pandemic study that showed there were a million people across the country who were doing things like, you know, turning down their gas to save on heating or skipping out on food purchase. Just to afford the prescription drugs they need to stay healthy. Uh, so this is a huge issue and it’s becoming a larger one. The longer we wait to, you know, address some of the issues here.

Jordan Heath-Rawlings This is a question I feel like I’ve asked a lot about various aspects of our healthcare system over the past few years, but h how did it end up like this?

Danyaal Raza You know, I think it’s a great, great question and, and you. It has to do with really how Medicare came to be. So if we, you know, throw our minds back to the, you know, sixties and seventies when Medicare first came to be in Saskatchewan and later across the country, you know, it really started to cover doctors and hospitals first, because back then when most people got sick, you know, they were going to hospitals, it was acute diseases. It was things like heart attacks and broken bone. Uh, but of course things change. It’s 2023. Chronic disease, things like diabetes and cancers are playing a huge role in the conditions we get and the treatments that we need, but our coverage hasn’t. Evolved to keep up. And it’s a shame because if we go back to the vision that Tommy Douglas, you know, the father of Medicare outlined for uni, our universal healthcare system, the first phase was acute disease doctors in hospitals. But he always envisioned a second phase where we would not only expand, Coverage to things like prescription drugs that focus more on chronic disease, but also rethink the way we actually deliver and organized care. And unfortunately, we never got to that second stage, and we’re seeing the consequences play out today.

Jordan Heath-Rawlings So as we speak, how are drug prices regulated in Canada and has there been any recent movement on that front?

Danyaal Raza Yeah, so you know, , this is like a bit of a soup of acronyms and, uh, policy wonky jargon, which I’m gonna do my best to avoid. So, you know, at the very basic level, when a drug company wants to sell a drug in Canada, it submits it to Health Canada. Health Canada approves it for use and sale in our country. And then there’s another body, which is a independent body of the government, but still, you know, a federal agency of sorts. It’s called the Patented Medicine Price Review Board, or the PPRB. And they basically set the prices for patented medication or brand name medication in an effort to, you know, control quote unquote excessive pricing.

Jordan Heath-Rawlings And so that’s how the prices are set. And then the question is, how much are people actually paying?

Danyaal Raza Well, that also depends on how you’re covered. So if you’re paying for medication out of pocket, then you’re paying the P N P R B list price. If you’re covered by private insurance and the costs that are shared between, you know, you, your, and your employer. Those costs are also the P P R B list price. But then for public plans it’s a bit different because public plans enter into confidential negotiations with drug companies. You know, using things like bulk buying and other leverage, they have to negotiate lower prices for people with public coverage. But unfortunately, those negotiations are, uh, often confidential at the request of drug companies.

Jordan Heath-Rawlings So we actually don’t know what those real prices. What has the board proposed over the past few years?

Danyaal Raza I guess, because we’re gonna get into a, a battle that’s been going on for a while here, but I want people to understand like what’s on the table that might help with this. This goes back to 2017, when then, uh, minister of Health, Jane Philpot, she introduced, you know, a pretty robust set of regulatory changes, uh, that would help lower the cost of prescription drugs. It was not universal PharmaCare, but many people saw it as kind of a prelude, you know, a set of conditions we needed to get there. And that was almost six years ago now. But we’re six years in, we’re three health ministers later, and a lot of folks, myself included, have seen these reforms slowly be stalled and diluted, and then really last month become mired in, in scandal. And you know, we’re not sure. We’re not sure really where they’re gonna go now.

Jordan Heath-Rawlings We’ll talk about the scandal in just a sec, but first give me a sense of, of what has gone on over those six years. When you say, like, stalled and diluted, give me some examples of, of what’s been going on.

Danyaal Raza So, the initial set of reforms basically had, you know, three regulatory changes to, uh, help bring our drug costs a little bit closer to international norms. But, you know, anytime we drink, bring down drug costs to make them more affordable for Canadians, it’s going to affect the bottom line. Some of the brand name pharmaceutical companies and even private insurance companies. So they’ve been fighting these changes really tooth and nail. And in the past six years, we’ve seen four kind of delays or requests for additional consultation. We’ve seen a court challenge. And it’s knocked down these three major changes to really one that just remains. And even on that one change, we’re continuing to see delays. And most recently, minister Dulo, the current minister of health, intervene in ways that some folks have called inappropriate to delay things even further.

Jordan Heath-Rawlings This was reported by an outlet called the Breach last month. Can you explain, uh, what’s going on with that and, and why it would be inappropriate and, and the results of it? This is a real mess.

Danyaal Raza I think that’s the right word to describe it. So, you know, the PMPRB is an independent agency and it’s supposed to operate at arms length. From the federal government, but what the breach reported is that in the fall, minister Dulo acted outside of his typical role as a minister and personally interfered in the process to ask for a delay in suspension of the reform process when there were, you know, only a few days left in this final round of, of consultations, and when the breach broke this story last month. Uh, just one week of that story last month, you know, just within one week of that story, I think it was the very next day, one of the p and prbs board members issued or made public their resignation letter. They described this intervention as one that fundamentally undermined the board’s independence and credibility and as the minister, you know, basically interfering in a way that was, you know, largely indistinguishable, inform and substance from industry talking points. And then, you know, just a day or two after that, the executive director of the P M P R B also resigned from, uh, from the organization as well. So it’s, you know, obviously raised a lot of questions. I don’t know if I expect you to have an answer to this one, but I kind of feel like I have to ask it. You know, this reform came from Minister Philpott and now according to reports, you know, it’s the current minister that stands in the way, which would make sense to me if we’d had a change in government somewhere in there. But this is the same liberal government, same prime minister.

Jordan Heath-Rawlings Why would this happen?

Danyaal Raza Yeah, you know, any policy change like this, there’s gonna be, you know, winners and losers and this would cut into the, uh, profit margins of brand name pharmaceutical companies, and you know, very likely the private insurance industry as well, you know, since last March when the liberals and the NDP signed their confidence and supply agreement, we’ve seen a quadrupling in lobbying on Parliament Hill because, you know, for for many of us, you know, when we saw the agreement being signed, it, you know, introduced or reintroduced a bit of optimism into not just the PMPRB changes, but you know, the much broader issue of, uh, universal drug coverage. So there’s a lot of, you know, opposition, um, to this, even though there is, you know, a considerable amount of support from many policy corners and of course from patients in civil society as well, what is the argument against it and the one made by, uh, pharmaceutical companies in particular, because I can’t imagine they’re just coming to the table and saying, Hey, you can’t do this. It’s gonna cut in our profits. What are they saying and, and how legitimate. You know, the argument that they’ve been making is that if you bring down the, you know, prices and revenue for drugs in Canada, that it’s going to impact, uh, their ability to invest in research and development domestically here. And they’ve been saying this for, you know, a very long time for, you know, at least 50 years, whenever, uh, the issue of drug prices come up. But you know, we have the benefit of time and experience, not just in Canada, but in other countries as well, to see how this plays out. So for example, Britain, Sweden, France, these are just some countries in Europe, all of whom have lower drug prices in Canada and all of whom also have higher rates of, uh, research and development than we do. And even for the low rates of, you know, pharma funded R&D in Canada, we’ve actually seen those rates fall. When the PR and PMPRB changes were first introduced in 2017, you know, industry was investing about 4.4% of sales into, into research. And in 2021 had gone down to, to 3.4.

Jordan Heath-Rawlings And you know, what do these numbers mean, right? Like what do we anchor these two?

Danyaal Raza Well, we anchor them to an agreement that industry and government reached for R&D expenditures of 10%. So we are, you know, now a third of that.

Jordan Heath-Rawlings As this plan kind of sits here and festers and, and I guess is diluted as well. What’s it costing Canadians? Can we quantify the money that we are spending that, that we wouldn’t be if this had been passed in a timely manner?

Danyaal Raza When the reforms were first introduced in 2017, you know, in their full undiluted form, they would’ve saved, uh, Canadians over 8 billion in a 10 year period. So pretty substantial. Obviously being changed now and the amount that would be saved would be a fraction of it, but it’s still pretty substantial. And you know, what I would add is it’s also a really important test of government’s ability to push through a set of reforms that would, you know, challenge the status quo that benefits, you know, some industries in Canada at the expense of others. And you know, it really needs to pass. Smaller test so that we can see that the government’s serious about, you know, the bigger policy goal, which is of course universal PharmaCare.

Jordan Heath-Rawlings So what needs to happen next to get this moving? You mentioned the supply and confidence agreement. I think anybody who was hoping the N D P would hold the liberals feet to the fire on this has to be wondering like, where do we go?

Danyaal Raza Yes. You know, that’s a question I, I, I not infrequently ask myself. And you know, the reason being is I think if we leave them to their own devices, I don’t think we’re going to see, you know, a genuine effort or genuine policy change to control drug prices or to expand access. Their hands really gonna have to be forced here. So, you know, the NDP has an opportunity to do that through the confidence and supply agreements, you know, in that agreement was a plan for a Canada PharmaCare act by the end of this year. But of course, you know, what’s in that act is a, is a huge question, right? Will it be something that resembles meaningful change or will it be, you know, a shell of what many advocates have been calling for? But the other opportunity here is there’s been, you know, growing desire from civil society, even many employers, because remember, you know, if you’re, you know, making cars or if you are, you know, like at a coffee shop and you wanna be a good employer, you are often outsourcing to, you know, private insurance benefits for your employees. And, you know, you don’t know what drugs are worth covering or not, right? But increasingly drug costs are becoming a larger and larger item in labor costs. And so we’ve seen many employers, especially small businesses, raise their voice for, you know, some help. We talked about the numbers in the political fight.

Jordan Heath-Rawlings If this happened, what would it actually look like to Canadians? How would they encounter the new policy and what kind of role would it play in their lives?

Danyaal Raza You know, even if we don’t achieve universal PharmaCare, if we were to have robust drug price controls, it means that, number one, if you don’t have coverage and you’re one of the 1 million Canadians who are, you know, trying to save on gas and lower heat costs or skip food purchases, you’d have to do less of that in order to afford your out-of-pocket expenses for prescription drugs. If you had high copays or high deductibles through your private plan, uh, those could potentially go down. If you are an. Your labor costs could go down as well. And you know, if you are one of the provincial governments with a public plan, then with a lower list price, it also makes it a little bit more, a little bit easier to negotiate fair drug prices when you enter into these negotiations with drug companies.

Jordan Heath-Rawlings Last question. This has kind of been a frustrating discussion to have, and I can hear a little bit of the frustration in your voice, but it does also maybe feel like we’re closer than we’ve ever been. Like, when you look at the big picture, are you optimistic?

Danyaal Raza This is a tough question to answer because right before Covid 19, you know, came to town, we were, we were so close, we were, you know, within a hair’s breath of not just this but universal PharmaCare. The pandemic has derailed things and shifted priorities. We’re not as close as we were in 2019. We’re still closer than we have being in a very long time, but ultimately, you know, Whether we get there or not, I think it’s gonna depend on the success of external pressures, folks coming from civil society, from opposition parties who care about this, to force the government’s hand so we can finish the unfinished business of Medicare.

Jordan Heath-Rawlings Dr. Raza, thank you so much for your time today. Thanks for having me on Jordan.

Jordan Heath-Rawlings Dr. Danielle Raza, family physician and assistant professor with U of T’s, department of Family and Community Medicine. That was the big story. For those who aren’t aware today, Tuesday, March 28th is budget Day in Ottawa, so we will get a chance to see if the liberals decide. To address the issue, if not of PharmaCare, then at least of lower prescription drug prices. We should know the answer by the end of the day. You can find the big story at the big story podcast.ca and talk to us on Twitter at the Big story fpn. You can email us hello at the big story podcast.ca and call us and leave a voicemail, 4 1 6 9 3 5 5 9 3 5. Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow.