Good afternoon. Thank you for having me here today.
By way of introduction, I am Steve Morgan. I am a tenured full professor at the University of British Columbia. Over the past 20 years, I have published 105 peer-reviewed pharmaceutical policy research studies and 43 reports on pharmaceutical policy for governments, research centres, and think tanks in Canada and abroad.
My remarks today draw on that research and on the years of research and consultations that went into the production of the report “Pharmacare 2020: The Future of Drug Coverage in Canada”, which was published last summer. That report provides a clear, principled, and evidence-based vision of what pharmacare should be for Canada.
Specifically, it recommends that federal, provincial, and territorial governments work together to implement a universal public pharmacare program that has a predefined and transparent budget with which prescription drugs of proven value for money, from a public health care system perspective, are made available to all Canadians at little or no direct cost to patients.
The “Pharmacare 2020” recommendations have been reviewed and endorsed by 281 of Canada's leading university-affiliated experts in health care policy and clinical practice, including 12 members of the Order of Canada. I say this to assure the members of this committee that those recommendations are rigorous, credible, and widely respected by disinterested experts from across Canada.
The first point I'd like to make in my remarks today is that such a model of pharmacare is an essential yet missing component of Canada's universal health care system.
The United Nations and the World Health Organization have declared that health is a fundamental right and, as a consequence, that all governments are responsible to ensure their citizens have access to necessary health care, including medically necessary prescription drugs. All member states of the United Nations, including Canada, have effectively ratified several declarations to that effect over the past 30 years.
Consistent with those recommendations, nearly every developed country has achieved universal health coverage, and every developed country with such coverage also provides universal coverage for prescription drugs, all such countries with the exception of Canada, that is.
Canadian medicare, our public system that provides universal equitable access to medically necessary hospital and physician services, effectively ends as soon as a patient is handed a prescription to fill. From there, the drug coverage in Canada is an uncoordinated and incomplete patchwork of private and public drug plans. Approximately 10% of Canadians have no drug coverage at all. A further 11% have ineffective drug coverage involving high deductibles and co-insurance that imposes ongoing financial burdens and creates known barriers to accessing necessary medicines.
A 2015 survey by the Angus Reid Institute found that more than one in five Canadians report that they or members of their households have not taken medicines as prescribed because of costs. Almost one-third of working-age Canadians report such barriers for themselves and for their family members.
This was not supposed to be the case. On clinical, ethical, and economic grounds, comprehensive public drug coverage has been recommended by national commissions on the health care system in Canada dating as far back as the 1960s. Twenty years ago, the National Forum on Health recommended that Canada establish a universal public pharmacare system just like medicare.
Government did not act on this recommendation. At a 1998 national conference on pharmacare, the then health minister, Allan Rock, summarized his government's thinking by saying:
In an ideal world, were the slate clean and money not a factor, few would doubt that a first dollar publicly-funded, single payer...system would be the best outcome. It would be the least expensive to society as a whole. And it would be the most fair. It would also follow through on the original recommendation of Emmett Hall's 1964 Commission on Health Care: namely, that the national plan be expanded, over time, to include, among other things, prescription drugs. But, we do not, of course, live in an ideal world, with that clean slate and unlimited money.
Thus, despite the government's acknowledgement that a public pharmacare system would be better, fairer, and less costly overall, Canadians were told that a private-public mix of insurance would have to suffice. Things did not get better. Just five years later, the 2002 Romanow commission called once again for pharmacare.
Romanow specifically recommended that the federal, provincial, and territorial governments begin work immediately to specifically bring carefully selected medicines into Canada's universal first-dollar public health care system. But once again, policy-makers argued that government couldn't or shouldn't act on those recommendations. Over the years that followed, we were told that the private and public mix of drug plans would be fine, because governments would offer catastrophic coverage for all Canadians. Yet, contrary to those assurances, access barriers have remained and drug costs have increased substantially, despite having catastrophic coverage in almost all Canadian provinces.
Our lack of action on comprehensive public pharmacare is unacceptable and, to be perfectly clear, Canadians are literally dying as a result. A 2012 study by researchers at the University of Toronto estimated that in Ontario alone, over 700 diabetic patients under the age of 65 died prematurely each year between 2002 and 2008 because of inequitable access to essential prescription drugs. If those numbers are correct, that is like a plane full of Canadians crashing every year, perhaps every month, while governments refuse to take action because of concerns about costs and politics.
This brings me to my second message today. Universal public pharmacare is the economically responsible thing to do on behalf of Canadians. The existing private-public mix of pharmaceutical insurance in Canada fails because it is neither universal nor integrated with the rest of our public health care system.
No country with a universal public health care system finances its system of universal drug coverage through a separate private insurance system. The reason is simple. In countries with publicly managed health care, including Canada, universal public drug coverage allows for prudent expenditure management at a societal and health system level. Such integration of systems consolidates purchasing power and best aligns the incentives of providers and managers of health care by integrating the management of pharmaceuticals with the management of other components of the health care system. Countries that do this achieve far better access to medicines than any province in Canada does today, and they do so at considerably lower costs.
Canada spends 30% to 50% more on pharmaceuticals than 24 of the OECD countries, including many with health care systems comparable to ours. These other systems achieve pharmaceutical savings through more cost-effective medicine use and greater purchasing power, which translates to lower prices.
Though provinces have done well to coordinate their pharmaceutical price negotiations in recent years, provincial drug plans are far from having the power of a single-payer system. A universal public pharmacare program would dramatically increase Canada's purchasing power in the global market for pharmaceuticals and enable careful evidence-based selection of medicines by system managers, prescribers, and patients. Credible estimates based on conservative assumptions about policy outcomes indicate that this would save Canada approximately $7 billion per year.
This brings me to my third and final message for you today, and that is that the transformative change that is required in Canadian pharmacare depends on federal involvement and financial contributions. This is a familiar story in Canadian health care policy. Every major stage of Canada's universal medicare system was brought about through federal cost-sharing that helped provinces to afford the changes needed and helped provinces to overcome political opposition that stood in the way of progress. Pharmacare will be no different.
On their own, provinces may not have the resources or purchasing power needed to implement the prudent pharmacare system. Regardless of size, all provinces will certainly need help to overcome the predictable opposition that comes from select industries that profit from the private-public mix of drug plans in our system and the resulting high prices for medicines in this country. As they have repeatedly done in the past, pharmaceutical sector interests will oppose a universal public pharmacare program, because such a system will almost certainly achieve better outcomes at, importantly, lower costs.
The pharmacare reforms that Canada needs, therefore, require the truest test of political leadership: ability to champion the legitimate but diffuse interests of ordinary Canadians, dare I say middle-class Canadians, over the concentrated and thus powerful interests of specific actors. This is not to say that governments that take action won't find support from the Canadian public. On the contrary, the 2015 Angus Reid Institute survey mentioned earlier found that 87% of Canadians support adding prescription medicines to our publicly funded Canadian medicare system.
I will conclude by noting that it is important for this committee, indeed this government right up to the Prime Minister, to realize that now is the time for pharmacare reform. Canadians have been waiting for pharmacare since it was first recommended in the 1960s. Evidence suggests that decisions not to implement universal public pharmacare is costing us billions of dollars, and worst of all, hundreds of lives every year.
Unlike past eras when pharmacare was on the policy agenda, there is currently political alignment of a majority of governments across Canada that would support the broad goals and objectives of pharmacare reform. Such policy alignment is a once-in-a-generation opportunity for Canadians, and it may not be present by the next time a federal election comes around. Thus, now is the time for action. Now is a once-in-a-lifetime opportunity for political leaders wishing to leave a lasting positive legacy in the Canadian health care system.
With that, I would note that I wish your committee well as you study this issue and contribute to such a positive legacy for all Canadians.
Thank you.