The Liberals promised in the recent federal budget to look into pharmacare and they lured Ontario’s health minister Dr. Eric Hoskins away from provincial politics to lead consultations on how to proceed. This may be mostly a ploy to thwart the NDP which, along with the labour movement, has been trying to build support for a universal, publicly–financed pharmacare program.
The Liberals under Jean Chretien promised in 1997 to expand medicare to cover prescription drugs. Chretien blithely ignored that promise after being elected. Now Eric Hoskins will consult and then report in the spring of 2019, just in time for the Liberals to make another promise going into the October election.
“Plan” or “strategy?”
But let’s leave politics and talk rather about design. When I heard Finance Minister Bill Morneau’s speech, I assumed that he was talking about a national, universal and tax-financed program. But less than 24 hours later he undercut that idea. Speaking to the Economic Club of Canada, he said that he was looking for a national pharmacare “strategy” but not a national pharmacare “plan.” He said that his preferred arrangement would “fill the gaps” left by the existing patchwork of private and public plans.
What Morneau likely has in mind, even before Hoskins consults Canadians, is to have the government subsidize private insurers to arrange drug coverage for those without it, rather than devising a universal plan akin to medicare.
The medicare analogy
The medicare analogy is one relevant to pharmacare. The architects of medicare in Canada include Tommy Douglas, whose CCF created a universal, tax-financed plan for health insurance in Saskatchewan in 1962, and Judge Emmett Hall whose royal commission report on health care in 1964 recommended Saskatchewan-style medicare for all of Canada. Douglas said a public plan for doctor and hospital visits was a good start but that public health insurance should eventually include much more. Hall, in his royal commission report, actually proposed universal pharmacare, vision and dental care.
It is instructive to follow Hall’s reasoning. By the 1960s, medical insurance plans, many of them owned by physicians’ groups, were providing private health insurance to millions of people, but only to those who could afford it. Hall found, however, that 40 per cent of Canadians either had no health insurance or had plans whose coverage he deemed inadequate.
When he sifted through the evidence, Hall decided it would be far better to have the federal government subsidize provincial health plans for single-payer, universal insurance than it would be to pay for a patchwork of private plans to include people without coverage. Both Hall and Douglas were also opposed to subjecting people to a belittling means test to decide who can and cannot afford to buy insurance.
Savings with pharmacare
In 2017, the Parliamentary Budget Officer (PBO) found that there were about 26 million Canadians covered by various drug plans, largely through their employers. About 700,000 people had no drug coverage at all, and another 3.6 million had inadequate coverage. A central question is how best to provide for these 4.3 million people. There are numerous private insurers who will want the government to pay them to do it, and they will therefore oppose a universal, single-payer plan.
Prescription drugs represent the most rapidly rising cost in the health care system. The PBO reports that Canadians spent $28.5 billion on pharmaceuticals in 2015. The PBO also says that on average Canadians pay 22 per cent more for patented drugs than do people in other countries belonging to the OECD. A universal, publicly-financed drug plan would allow for bulk purchasing by federal and provincial health plans, and the PBO estimates that could save between $4 and $11 billion a year. But it would also mean shifting much of the expenditure from individuals and employer plans to the public sector in Ottawa and the provinces.
Mobilize for it
There are billions of dollars at stake in profits for the pharmaceutical companies, and we can expect that they are lobbying aggressively against any a single-payer and universal plan. One of the threats they often make is to move their production elsewhere if they don’t get their way.
We will get universal publicly-financed pharmacare only if Canadians mobilize for it as they did for medicare and more recently for improvements to the Canada Pension Plan.