While the concept behind the federal government’s universal pharmacare plan is well intentioned, the program would make a larger impact for employers by focusing on high-cost and specialty drugs, says Pam Martin, vice-president and senior consultant at Baynes & White Inc.
In theory, the way that the government is rolling out the program in small chunks, beginning with coverage for diabetes medication and contraceptives, is great, she says, noting the fact that the program would be accessible to anyone with a health card should help lower employers’ health benefits costs because they wouldn’t have to cover those medications under their plans. “That means they can reinvest in other things because . . . drug pricing is ridiculously high right now, because claims are high.”
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In particular, biologics are extremely expensive, so an increasing number of Martin’s employer clients have added or are considering adding a maximum amount to their drug plan to reduce costs, which means employees have to come up with the rest. It would also be helpful if the government added high blood pressure medication and cholesterol-lowering medications or high-cost drugs such as biologics or drugs for rare diseases, she says.
The newly formed advocacy group Smart Health Benefits Coalition has had ongoing discussions with the federal government on the best way to efficiently roll out the program. While the coalition agrees it’s important to give coverage to Canadians who don’t have a private health benefits plan, the organization notes 27 million Canadians already have access to coverage for diabetes and contraceptive medications under an employer-provided health benefits plan.
There’s an opportunity for the government to repurpose those dollars that would go towards individuals who are already covered and reallocate it to those without coverage, says Carolyne Eagan, president of the Benefits Alliance and spokesperson for the Smart Health Benefits Coalition. The program could also opt to increase the list of medications listed on the formulary during the initial rollout, she says, noting it would benefit more Canadians if the program added more drugs for diabetes and contraceptives, as well as drugs for other health conditions, such as high-cost drugs or drugs for rare diseases.
A recent case that caught Eagan’s attention involves an individual who has two daughters with Crohn’s disease. The annual cost for one of their medications is $55,000 and another is $27,000. While they’re lucky that one of their parents has an employer-provided plan that pays 100 per cent of the cost, the reality is, if that were to change to 80 per cent, it would be challenging for them to come up with the additional 20 per cent.
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The federal government should focus its attention on the out-of-pocket costs, even if through a program that allows for income testing, she says, adding that when these children graduate from university, they’ll lose their parents’ benefits coverage and that will be their most pressing consideration as they seek employment.
Earlier this month, during a parliamentary committee studying the federal government’s pharmacare program, Health Minister Mark Holland said the government is open to adding more medications to the list of drugs covered by the program, according to a report by the Canadian Press.
Holland’s comments came after Conservative health critic Stephen Ellis asked the minister why semaglutide — a class of type 2 diabetes medication — wasn’t included on the list of drugs covered by the legislation. Holland said the current list represents an “absolute minimum,” and the government is open to adding to it based on negotiations with provinces and recommendations from the committee.
Indeed, Eagan believes the negotiating process with the provinces will be key. “We recognize this is a negotiation for each province to decide [whether to] go ahead and implement as proposed or [to] decline [participation]. In the event of declining, . . . we would suggest . . . that there be a way for the provinces to come back and still get the funding and implement [a program in a manner that] makes sense in their programming.”
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But, she also notes it’s important for provinces that opt into the program to have a transparent process in place to help Canadians understand how its success is measured.
It will also be critical for the government to continue facilitating talks with organizations that encompass a range of perspectives within the health-care space, she says. While the Office of the Parliamentary Budget Officer estimates the first phase of pharmacare will increase federal program spending by $1.9 billion over five years, it also notes this estimate assumes any medications that are currently covered by provincial and territorial governments, as well as private insurance providers, will remain covered on the same terms.
According to the Canadian Press’ report, Stephen Frank, president and chief executive officer of the Canadian Life and Health Insurance Association, said although Holland has stated Canadians with existing drug plans can continue to use them, the actual text of the bill is “ambiguous” and “has no mention of workplace benefit plans.”
“Read in its entirety, the bill could result in practical and even legal barriers to our ability to provide Canadians with the drug benefits that they currently have.”