Thank you. My name is Ake Blomqvist. I am an adjunct research professor at Carleton University and co-author of the C.D. Howe publication called “Feasible Pharmacare in the Federation”, which we have submitted to the committee. I am a part-time health policy scholar at the C.D. Howe Institute, but I am also presenting on behalf of my co-author, Colin Busby, who is an associate director of research at the institute. He is responsible for the work on health care and was supposed to be the main presenter, but he was called away unexpectedly because of a sudden and very serious illness in his family, so I am presenting on his behalf as well.
I have been writing about health policy in Canada for some 35 years and very much support the view that we advance in the paper, which is that the most constructive thing the federal government can do for pharmacare today is focus on things it can do independently and in support of reforms that are already under way in the provinces.
We don't think that an attempt to create a universal public single-payer plan would be helpful at this stage. Obviously we share the view that too many Canadians still report not filling prescriptions or not completing treatment courses for financial reasons and we recognize that the prices of drugs in Canada are still very high by international standards. Also, there are major issues with the quality of prescriptions in various places. We think that the proposals to overcome these problems through a national pharmacare plan would create very major difficulties.
A stand-alone plan managed by the federal government would be unwise, we think, because it would result in less integration in the management of the overall health care system and less incentive to make cost-effective choices among drugs and other inputs in health care. A federal pharmacare plan, for example, could not influence doctors' prescribing behaviour, something that greatly impacts the cost and effectiveness of any pharmacare plan.
We also don't think that using the approach of conditional federal-provincial transfers would be a good idea. Trying to get the provinces to create a set of single-payer public plans would quickly deteriorate, we think, into a federal-provincial standoff about money. It would also be complicated by the fact that the existing public drug plans in different provinces are so different from one another.
Instead of a big push to revamp our mixed public-private system, we think the federal government should work with the provinces to continue developing the pharmacare initiatives that several of them have already started. Ultimately, we believe that provincial reforms are likely to lead to some form of universal pharmacare coverage everywhere in Canada.
To be a bit more specific, we advocate a strategy with several components. There are things that the federal government can do independently of a national plan to lower drug costs in Canada. It should be applauded for joining the pan-Canadian Pharmaceutical Alliance, but it could go further and take a leading role in that alliance. It could also make arrangements to include private insurers in the alliance to bargain jointly with the public plans.
The federal government could also reform the rules according to which the Patented Medicine Prices Review Board regulates prices. It could do so by incorporating the idea of value-based pricing.
Second, the federal government can work jointly with the provinces on strengthening the use of drug formularies that are used in the public plan and strengthening the role of economic evaluation in designing these formularies.
The third strand is that the federal government can ask the provinces, as we propose, to ensure that every citizen has access to a default plan with an upper limit on the percentage of income that a family has to spend on drugs. This idea could be pursued in a way similar to what the federal government currently does with respect to carbon pricing—setting a reasonable minimum standard for provincial plans and offering partial financial support for provinces that meet that standard.
In sum, we think there are several ways the federal government can speed up the process of pharmacare reform that is already happening in the provinces. We think this approach would stand a much better chance of achieving significant progress than the big bang approach that many advocate.
Canada has not done well in recent international rankings in health system performance. My personal view is that many of the shortcomings of our current system are due at least in part to our complicated model of divided federal-provincial jurisdiction over health policy. We think federal-provincial relations in health care are complicated enough already, and an undertaking to tear down and rebuild our system of pharmaceutical financing would just make them more complicated.
Thank you.