Health Committee on Oct. 19th, 2017

[Dr. Danyaal Raza]

We don't avoid costs by not having this program; we just downstream costs. In the case of my patients now who can't afford to pay for their medications out of pocket, who don't have an insurance plan, their diseases aren't going away; they're just being left untreated. For example, I have patients with diabetes who can't afford their oral medications, such as metformin. Their sugars aren't going away on their own; they're continuing to cause chronic health conditions and increasing their risk for heart attacks and strokes. Rather than paying for cost-effective medications now, we're waiting for these folks to develop heart attacks to present to the emergency department. Then we'll pay for incredibly expensive treatment and they'll suffer the health consequences.

[Don Davies, NDP, Vancouver Kingsway, BC]

Not to be melodramatic, but does anybody die in this country as a result of their inability to access medicines they need?

[Dr. Danyaal Raza]

People certainly die from complications of their medical conditions that often are untreated because they don't have access to—

[Don Davies, NDP, Vancouver Kingsway, BC]

Dr. Morgan, one thing I've said and I've heard in the House repeatedly from this health minister and the previous Liberal health minister is that we can't bring in universal pharmacare. We have to contain costs first. Then we can bring in pharmacare.

What's your comment on that?

[Prof. Steven Morgan]

This has been a long line: no pharmacare until there's cost control.

I think the evidence is fairly consistent, both in terms of the analysis that's been done by the PBO and independent academics and from the international experience, whether it's the VA in the United States, the U.K.'s NHS, Australia's PBS system, or New Zealand's PHARMAC, that there's no real cost control without pharmacare.

At some level we have to recognize that you ramp up to a system that will cover all Canadians. That's the way you actually ramp up the savings that we're talking about in these models. You can't realize those savings. Manufacturers will not give you 25% off on prices if a major payer in your system will pay no matter what anyhow. Essentially, there's no real cost control without pharmacare.

[The Chair, Liberal, Bill Casey]

The time is up. Thanks very much for the very last question—official question, anyway.

Now I have to ask the committee if they want to give us unanimous consent to have one more round of three-minute questions, because the bells are going to ring in a few minutes, and I need unanimous consent.

Do I have unanimous consent for three more questions?

[Some hon. members]

Agreed.

[The Chair, Liberal, Bill Casey]

Okay.

Just before we continue, we have one little bit of business. We do not have our agenda scheduled for November 2, November 7, and November 9. We already have antimicrobial resistance studies planned out. I just need the committee's permission to go ahead and invite the guests for that. We've already agreed on the meetings.

Now we'll start our round of three-minute questions.

We're going to start with Mr. Fraser. Welcome to the committee.

[Colin Fraser, Liberal, West Nova, NS]

Thank you very much, Mr. Chair, and thank you to the witnesses for being here. I'm not a usual member of the committee, so forgive me if I ask a question that has already been covered in the first round of your testimony.

With regard to copayments, Professor Morgan, specifically how does that work in other countries? What would happen if a person were not able to pay a copayment in a universal pharmacare-type system? Are there allowances for that in other jurisdictions that have the type of plan that we're discussing here today?

[Prof. Steven Morgan]

Most of the universal public systems that we would compare to—the U.K., Sweden, Norway, Australia, New Zealand—have fairly limited copayments, with the exception of Australia. Australia has about a $35-per-prescription copay for general beneficiaries. If you're disabled, low-income, or over 65, you pay what's called a concessional fee, which is significantly less.

Unfortunately, in countries that have high copayments for all medicines, such as Australia, patients do go without prescriptions, just like Canadians do when we face deductibles and co-insurance.

This is why countries such as the Netherlands and most health management organizations or health maintenance organizations in the United States and other systems use what's called tiered copayments. The stuff that is truly essential, proven clinically effective, cost-effective, and preventative is free.

The stuff that is more discretionary, or second-line therapies, may have copayments. Again, in most comparable systems those copayments are relatively modest unless it's truly a third-line therapy that patients shouldn't be taking unless they've gone through prior therapies. Again, in most of these countries that we would compare to that are universal, the rate of access barriers are very low, with 4% or less of their population reporting those problems.

[Colin Fraser, Liberal, West Nova, NS]

Okay. Thank you.

At the pharmacy itself, when a prescription is being filled under a type of universal pharmacare program, do you see any differences in how people are able to get their prescriptions filled right now under this type of scheme, where it's being paid for, rather than going through an insurance company or being out of pocket? Is there a difference when it's done through a copayment under the universal plan?

[Prof. Steven Morgan]

It would be very similar to the way that our drug benefit programs work in most provinces for populations that are eligible for public plans that exist today. Most of them they present their CareCard and pay their copayment. If they were exempt, they would pay nothing and get the prescription. It would be much like the systems today. In fact, I think it would build on the systems today, because the provinces would continue to run them. Some provinces even use third-party payers such as Green Shield and Blue Cross to do the processing for the provincial plans. That may not change.

[Colin Fraser, Liberal, West Nova, NS]

Okay.

I can ask Dr. Gagnon a question as well.

What challenges do you see in other countries? I know other countries have a type of universal pharmacare program. What challenges do you see in those types of systems that we would want to avoid here in Canada if we were to implement a pharmacare program here?

[Dr. Marc-André Gagnon]

There are a variety of regimes with

very different terms and conditions.

In the end, in terms of tiered copayment, for example, in France the problem is that you have complementary insurance. You have a system to promote or guide the use of the most cost-effective prescription drugs, but then you have complementary insurance that eliminates the work that has been done with these tiered copayments by reimbursing everything. This is one of the issues.

We need to absolutely avoid any type of co-insurance or deductibles based on the listed price of the drug, which reflects nothing now, because it's all about confidential rebates. Any co-insurance copayment based on the listed price should be avoided. At the same time, what is needed is a drug plan that is not an open bar and builds the institutional tools necessary to promote a more rational use of medicine. This is what we see in Australia, for example, with the NPS MedicineWise system. This is what we see in the Netherlands with the Institute for the Rational Use of Medicine. These would be the tools needed in order to make sure that this public drug plan works efficiently to the benefit of the whole population and monitors what's going on to make sure that we always have the highest standards in terms of prescriptions.

[The Chair, Liberal, Bill Casey]

Okay. Thank you very much.

Time is up. I'm going to have to keep everybody to three minutes.

Ms. Gladu is next.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

This question is for Mr. Frank.

My concern is if we take all of the private systems today and we roll that all into the public system, I assume then that all the people who work for Sun Life, Great-West Life, and all those different companies will lose their jobs.

Do we know how many people work in those industries today?

[Stephen Frank]

No, and I think this goes back to my comment earlier about administrative costs. We don't sell drug coverage. We have a sales force, an executive team, back office people, and they are supporting a whole suite of things.

To give you an analogy, if Canadian Tire stopped selling automotive supplies tomorrow, and that whole wing of the store went away, they're not going to fire every employee in the store, right? The business gets resized, but you still have to support everything else you're doing. It's hard to estimate what the effect would be. There would be some job losses there for sure, but the costs to the system don't go away. Most of the people would stay in place; they would just be redirected to other services that we would continue to offer to employers.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Okay. Very good. Thank you.

I think it was Mr. Gagnon who talked about how Canada has the second-highest prescription drug use in the world. If we think about the amount of money per capita that we're paying for our drugs, it's the most in the world. It might have been Mr. Morgan.

The example was that there are other places, such as Australia, New Zealand, and Norway, where the cost is much lower. I'm interested to know what they're doing differently. It can't be a volume leverage, because there are only 24 million people in Australia, five million in New Zealand, and five million in Norway.

How are they getting such a low drug cost per capita? Does anyone know?

[Dr. Marc-André Gagnon]

In terms of drug costs, there are two things: price and volume. On the issue of price, we're doing a bad job in terms of pricing, so we could reduce price. For that, basically a national formulary is the best tool to build bargaining power. In terms of volume, it's promoting a rational use of medicine. This is exactly what I mentioned with Australia, with the Netherlands, with the U.K., and with NICE, for example. These are the tools absolutely necessary in order to make sure.... There is an issue of under-prescription in Canada, there's an issue over-prescription, and there's an issue of misprescription as well, and we don't have any tools to act on these issues right now. A drug plan's purpose is not only to make sure that those who do not have access to the drugs they need will have access now, which is absolutely important, but it's also a way to promote more rational use of medicine, avoid over-prescription, and eliminate misprescription as well.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Someone made a statement that we don't know who the people are who can't afford insurance. Do we really not know? Is it not low-income people and seniors on fixed incomes?

[Prof. Steven Morgan]

I think it's safe to say we do have a fairly good idea of people who can't access medicines. It is people with lower income, and not having coverage is the most significant determinant of whether or not you are going to fill a prescription. In fact, a high-income person without insurance is more likely to not fill a prescription than a low-income person with insurance. This is a big issue.

I have a paper in the Canadian Medical Association Journal from this year, which the analysts might be interested in seeing, about the differences in volume in therapy purchased by comparable countries. It's not that big. The difference is in prices and the difference is in product selection decisions. It's about whether lower-cost options are being used more often versus higher-cost ones.

[The Chair, Liberal, Bill Casey]

Go ahead, Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Dr. Gagnon, you've already talked about the inefficiencies you see in the private system. You said that “$5 billion a year is wasted because private drug plans pay for unnecessarily expensive drugs and dispensing fees”, without any evidence of increased efficacy, I take it. You talked about “administration costs of for-profit private plans”. You've described them as “enormous: around 15%, while administration costs for public plans are less than 2%.”

Given these inefficiencies associated with private coverage, is a public single-payer pharmacare program, in your view, preferable to a mixed private-public system from a fiscal perspective?

[Dr. Marc-André Gagnon]

Yes, absolutely. The $5 billion in waste among private plans is a number by a pharmacy benefits manager, Express Scripts Canada. On administration costs, you mentioned $9 billion. Keep in mind that you have $5 billion in waste and you have $1.4 billion in tax subsidies, so basically this is public money spent for private regimes. You have the administration cost differences, $1.6 billion, and you have another 30% for the private coverage of public employees. If you do the math, we're beyond $9 billion.

[Don Davies, NDP, Vancouver Kingsway, BC]

On math, Dr. Morgan, you, in your 2015 study, did a range of best-, worst-, and mid-case scenarios.

You said:

Universal public drug coverage would reduce total spending on prescription drugs in Canada by $7.3 billion (worst-case scenario $4.2 billion, best-case scenario $9.4 billion). The private sector would save $8.2 billion (worst-case scenario $6.6 billion, best-case scenario $9.6 billion), whereas costs to government would increase by about $1.0 billion (worst-case scenario $5.4 billion net increase, best-case scenario $2.9 billion net savings).

If we brought in universal pharmacare, what do you think we would save as a country annually, after the rollout period?