Health Committee on May 9th, 2016

[Anita Huberman]

Well, I think what we're looking at right now is that Canada is burdened by what we believe is an inefficient system of public drug coverage. It does fall heavily on businesses. Surrey, as I mentioned, is a small and medium-sized business community, and small businesses are the least likely to offer drug coverage. Few entrepreneurs and independent contractors are covered by any drug benefit plan, so this harms the efficiency of our economy, because many Canadians are forced to choose where to work based on access to insurance rather than aptitude and passion.

Our assessment, our analysis, is that up to $5 billion is spent by Canadian employers on private drug benefits, and that's wasted money, because private drug plans are not well positioned to manage drug pricing or the prescribing and dispensing decisions of health professionals.

I want to underscore that businesses should not be making drug decisions; it's doctors and health managers who should be making those decisions.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you.

Can you quickly explain why case management is a mainly private concept? Do you not think that personalized medicine could be factored in under the national pharmacare plan?

We have heard from other witnesses that it's possible to do it publicly, as in other countries.

[Stephen Frank]

For personalized medicine, what were you referring to?

[Sonia Sidhu, Liberal, Brampton South, ON]

No, case management.

[Stephen Frank]

Oh, case management.

Well, our observation would be that we are doing it on the private side and it's not being done on the public side. It's an example of something you would lose if you were to nationalize drug coverage.

We do a whole bunch of things on the private insurance side that are not done by the provinces. Another example would be the use of preferred provider networks, whereby we leverage the pharmacy to a much greater extent than we have in the past. We negotiate cost savings for our plan members. We get enhanced services provided to them when they approach the pharmacy. There are lots of interesting pilot projects and things going on.

On the private side, Frank mentioned innovation and choice, so it's a very dynamic environment. It's not acknowledged as much as it needs to be. It's not as well understood as it should be. You risk losing that if you move to a system that doesn't have the incentives for that kind of innovation. I think that's one of the things we're cautioning against.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you.

My next question is this: if Canada decided to move forward with some form of universal public pharmacare coverage, what would your organization's effective role be in that?

[Stephen Frank]

You're saying if you—

[Sonia Sidhu, Liberal, Brampton South, ON]

If Canada decided to move forward with universal drug care coverage, what would your effective role be to support that? What would your organization's actual role be?

[Frank Swedlove]

Well, we don't think that's a good idea.

First of all, it would be a significant cost that the governments would have to cover on day one. As Mr. Frank has told you, we estimate that to be about $14 billion. How is that going to be paid for?

Second, it would be the end of offering any kind of choice in terms of the drug plans that are available. In our view, that would restrict access to many drugs for Canadians, and also it has been shown that the public sector takes longer to introduce drugs, so that would have an effect.

Also, the whole aspect of innovation and improvements, I think, would be put into question as they try to manage a very large, single universal plan that doesn't have any competition or any attempts to innovate, in our view.

[The Chair, Liberal, Bill Casey]

You're done.

Mr. Davies is next.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

Mr. Swedlove, you've mentioned cost a number of times. It's pretty much accepted at this committee, by witnesses that we've heard, that Canada pays the second-highest prescription costs in the world. We've had a privately delivered system, basically, for the last five decades.

If the private system is so efficient and works so well, why is it that today, in 2016, we have 20% of Canadians who have no coverage or are under-covered, and we're paying the second-highest prices in the world? Why is that?

[Frank Swedlove]

What I have stated many times is that what's not working well are the costs associated with drugs that Canadians have to pay. What we've proposed are some ways of dealing with that, such as changes in the PMPRB, which encourages high-cost drugs. There is also the lack of an ability for us to negotiate for lower-cost drugs using the entire Canadian marketplace. Those are things that could be done within the present system.

[Don Davies, NDP, Vancouver Kingsway, BC]

Why haven't they been done?

[Frank Swedlove]

I think that's a good question to ask governments: why they don't allow us to join the pCPA and why PMPRB continues to support high-cost drugs.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm going to challenge you a little more again on your assertion that a public system necessarily results in less choice.

When I go into a hospital, which is a public facility, and I need prescription drugs, I can get every single drug I need. I'm 53 years old, and I've never heard a story of someone going into a hospital and coming out of surgery or going into surgery who couldn't get a prescription drug. In fact, the stories we're hearing at this committee are the opposite: the problem is that people go into an acute care system in the hospital, get the prescriptions they need, come out of hospital, and then for a variety of reasons, if they don't have private coverage, can't get the prescriptions they need. Then they get incredibly sick and end up back in the acute care system, which is far more expensive.

Can you explain to me why, if the public health care system is unable to provide the full variety of prescriptions we need, this is not the experience we have when we go to hospitals, which are public institutions?

[Frank Swedlove]

I think it is accepted by everyone that the public plans are more restrictive than the private plans. If you're telling me that under the public plans people get more access to drugs and under the private plans they get less, that's totally inconsistent with everything I've heard.

[Don Davies, NDP, Vancouver Kingsway, BC]

You're talking about Canada, but it's also well known that Canada is the only country in the world that has universal health care coverage and does not have some form of universal prescription coverage.

If we compared Canada with Germany or Belgium or the Netherlands or Denmark or Norway or Sweden or France or Britain, would you still say that those countries, those populations are not getting the variety of drugs that we're getting in Canada under private plans? Is that your testimony?

[Stephen Frank]

I guess the obvious answer is that the countries you quoted have a mixed system. The German system is delivered privately, as is the Dutch. The Australians have a mixed system.

We would agree that we don't have universal access to drugs. We have gaps in Canada. That does not lead necessarily to the conclusion that there's a binary choice here of total privatization or of nationalizing. When we look globally, we see that most countries have a mixed system, just as they do in the provision of general health care.

Our view is that we need to work with the system we have. We need to make it better. We're proposing solutions that are relatively easy to implement that will have huge positive benefits. That's where we would suggest we should focus our effort.

[Don Davies, NDP, Vancouver Kingsway, BC]

Ms. Huberman, is there any jurisdiction in the world that you could point us to that you think might be a model Canada could look to for delivering the kinds of services your members are looking for?

[Anita Huberman]

I don't have an example; I leave it to the experts.

[The Chair, Liberal, Bill Casey]

Mr. Davies, you're done.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

[The Chair, Liberal, Bill Casey]

That brings to a conclusion our official question period.

I'm a little confused again. You're saying that a national pharmacare program would cost the government $14 billion. Many of the witnesses are saying that we as a country would save $6 billion. That's a $20 billion gap.

I know we're comparing apples with oranges, but can you reconcile those differences?

[Stephen Frank]

The difference is that individuals who make that claim are overestimating the administrative costs in our system and are assuming that there is a way to very quickly and immediately cut the price of literally thousands of drugs on the market. We're not aware of any way you can do that.

Dr. Carrie is right. The pCPA has negotiated about a hundred agreements so far. Depending on how you want to count them, there are 6,000 or 7,000 drugs in Canada. At 100 agreements over three years, it's going to take decades at that pace to work through this number.

The challenge is that there's the transition issue that you're going to have to think about. We believe there are significant savings if we start negotiating drugs collaboratively, and we want to start doing that. Let's start doing it and let's start realizing those savings.

If you want to start shifting $15.5 billion around in the system, I don't know how you can realistically say that you're going to take $7 billion, $8 billion, $9 billion of it out in any reasonable time frame. I think that's the challenge you need to present to some of these folks who throw those numbers around. We don't see how you get there.

[The Chair, Liberal, Bill Casey]

Thank you very much, everyone.

Thank you, Ms. Huberman, for joining us and for sitting there for two hours or an hour and a half. We appreciate it very much.

We don't have your brief yet; it's coming, and we're anxious to get it as well.

Again I want to thank the witnesses. You've brought us a lot of good information. There's a good chance we'll be back to you before we're done.

We're going to take a little break and then we're going to move in camera. We'll reconvene in a couple of minutes.

[Proceedings continue in camera]