Mac researcher urges Canadians to look at “real costs and benefits” of national drug program

A key barrier to adopting a national pharmaceutical program is that Canadian policymakers continue to think and talk about universal drug coverage as fundamentally unaffordable, despite growing evidence that such a plan would likely lead to cost savings and other benefits.

That’s the finding of a study by Katherine Boothe, an assistant professor in the McMaster’s Department of Political Science whose research looks at why, over time, Canada has failed to adopt universal, public coverage of prescription drugs.

“Canada is an outlier in terms of the exclusion of drugs from our public health system,” explains Boothe. “We’re the only OECD (Organization for Economic Co-operation and Development) country with a public health system that excludes pharmaceuticals.”

The study examined the history of the pharmaceutical debate in Canada and compared it to the experiences of the United Kingdom and Australia, which have public health care systems that include comprehensive drug coverage.

“Canadian policymakers started talking about pharmaceuticals as unaffordable in the 1940s – at the same time that the UK and Australia were adopting drug coverage programs – and at a time when, comparatively speaking, drugs weren’t that expensive,” she says. “So, this discourse started early in Canada and has continued ever since.”

But while a national pharma care program has historically been viewed as too expensive, Boothe says recent evidence suggests that universal coverage would actually lead to cost savings.

She says under the current system, Canadians are paying significantly higher per capita drug costs than those in countries with universal pharma care – in some cases, almost double. She says these costs would be significantly lowered if governments were able to negotiate prices as a single purchaser of drugs.

“There have been health and economic analyses conducted in Canada in the last couple of years that show what it might cost. It’s not an uncontrollable cost and it’s not an unaffordable cost,” she says. “It’s a matter of deciding as a society if this something that we value.”

Boothe says the current drug coverage system is facing increasing challenges and that an evidence-based debate on pharmaceutical policy reform is needed.

Employer-based drug plans are beginning to struggle under the weight of skyrocketing drug prices, she says, leading to increasing premiums and decreasing coverage. Then there are those that aren’t covered by public or private drug plans and have to shoulder the cost of their medication, or go without.

Boothe says adopting a universal drug plan would come with a hefty price tag ­– $3.4 billion, according to a recent estimate. Although she says the cost would be more than offset by savings in private insurance premiums and out-of-pocket spending, it would also represent a significant increase to government spending.

“There’s no question this would cost governments and maybe we decide we’d rather spend the money on daycare or bridges – that’s possible – but right now, we aren’t talking about the trade-offs. We’re just saying, ‘It’s unaffordable, we can’t possibly do that,’ she says. “Governments and societies make decisions about how to spend money so, having a real discussion about whether to spend the money is something we really need to do.”

Boothe’s research was initially completed for her 2015 book Ideas and the Pace of Change: National Pharmaceutical Insurance in Canada, Australia and the United Kingdom. She presented the research – updated to consider the policy implications for Canada in 2017 – at the Associated Medical Services (AMS) Symposium earlier this month. Read abstracts from the symposium.