The Health Council of Canada recently released two companion reports on the National Pharmaceuticals Strategy. Dr. Neil MacKinnon, contributor to the reports, discusses the NPS and its implications for plan sponsors.
What trends do you see in Canada’s pharmaceutical coverage?
In a 2007 international survey on health policy, the opinions of Canadians were compared to citizens in six other industrialized countries, including their views on drug use and affordability. Canada ranks poorly, in that Canadians are spending a lot of money out of pocket for prescription drugs. That’s certainly not a trend we’d like to see.
The cost of drugs is another problem. While the rate of growth has been slower in the past few years, drug expenditures have risen 38% since the NPS was first announced. So, while the promises made by the NPS have not been fully implemented, the situation has gotten worse over time.
The third trend involves problems with medication errors and safety. In a Commonwealth Fund survey in 2007, 17% of adult Canadians said they had experienced a medical error in the past two years. This translates to 4.2 million Canadians who have experienced a medical error—certainly a statistic that is sobering.
If you think about it, it’s alarming that in Canada, our second-largest and fastest-growing healthcare cost—pharmaceuticals—is outside of the medicare basket. In the private sector, the single largest healthcare factor is pharmaceuticals. And, for the most part, each province, each private payer is left to their own devices on how to control that cost.
How would the implementation of the NPS affect plan sponsors?
If implemented, many aspects of the NPS would have a dramatic impact on employers. For example, one of the nine promises in the NPS is a national common drug formulary. In [this] case, it wouldn’t matter which province you were in or if you were in a private or public plan; there would be one drug list that payers would agree on. We don’t currently have that, and how [the NPS] would enforce it or select the drug list remains a mystery. But if they were to go forward with that, it would significantly change the drugs that are reimbursed today.
Other initiatives that pertain to plan sponsors include lowering drug costs, especially the cost of generic products. Since the NPS was introduced, some provinces—notably Ontario, with Bill 102—have taken it upon themselves to introduce legislation to mandate those cost pressures. Since 2004, it’s been on a province-by-province basis. So if the NPS was renewed, you could expect to see more Pan-Canadian effort on negotiating with drug companies from a position of strength.
We now have provincial plans negotiating secret deals with drug companies to get better prices, and private plans are becoming worried that the additional costs are being passed on to them. If one province, like Ontario, has the power to make a deal like that, imagine if all the provinces came together and negotiated effectively.
How will private plans be affected?
Whenever there is a large impact on the public sector, the private sector is affected, both positively and negatively. Since 2004, the NPS has lost a lot of energy and political will, and we’ve seen individual provinces have a significant impact on the private sector. If there’s a renewed national approach to these problems, then the private sector should be at the table now—as opposed to waiting for the strategies to be implemented and feeling the implications down the road.
Does the NPS solicit recommendations?
No, I think most experts would agree it has done a poor job of engaging others. I’d say it’s up to plan sponsors to be proactive in approaching the NPS rather than waiting to be invited to meetings.
Is there anything that plan sponsors can do to influence the direction of the NPS?
When the report is released, to make sure their voices are heard, they shouldn’t be intimidated to speak up. I don’t see why the private sector shouldn’t be at the table—at least with observer status, if not as a fully engaged partner—given that the private sector picks up a significant percentage of prescription drug costs in Canada.
Jody White is associate editor of BenefitsCanada.com.
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© Copyright 2009 Rogers Publishing Ltd. This article first appeared in the February 2009 edition of BENEFITS CANADA magazine.