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Sep 18, 2018

National pharmacare has to overcome intergovernmental hurdles. Can it?

September 18, 2018

How much Canadians pay for prescription drugs depends very much on where they live. Middle-income residents of Prince Edward Island facing an expensive drug treatment has to cover the first $4,400 with their own money – then their provincial pharmacare program pays for the rest. But if they live in Manitoba, they pay $3,063 before provincial coverage kicks in. In British Columbia, they only pay $2,150.

The unevenness in who is covered, for what kinds of drugs, and for how much, is one reason many believe it’s time for a federal pharmacare program – one that fills in the gaps in existing provincial programs and treats all Canadians the same.

But the differences in coverage across provinces are the main reason introducing national pharmacare will be so difficult. The federal government has to decide not only what kind of program to launch, but how to manage the ways that program interacts with the pharmacare programs we already have.

If the federal government had set out to include prescription drug coverage within Canada’s public health system 40 or even 20 years ago, the task would have been simpler. The canvas then was still more or less blank. New federal program spending would neither have duplicated nor worked at cross-purposes with provincial activity.

Now the canvas is a rich mix of sometimes clashing colours – a combination of mandatory coverage in Quebec; targeted coverage for seniors, youth or low-income families in provinces such as Ontario; and benefits for those facing very high drug costs in provinces such as British Columbia.

If the federal government had set out to include prescription drug coverage within Canada’s public health system 40 or even 20 years ago, the task would have been simpler.
The problem is not so much that some provinces might balk if the federal government opts for an approach to pharmacare that doesn’t mirror their own. The problem is that, if the federal government seeks only to fill the gaps to ensure no Canadian is left without some form of coverage, some Canadians (and some provinces) are going to benefit a lot more than others.

For instance, a decision to simply extend coverage to every Canadian who currently has none would see the federal government spend $90 per capita in Alberta, $40 per capita in Ontario, and nothing in Quebec. This is a political non-starter. There is no way the federal government can establish a program that rewards provinces where gaps in coverage are wider and penalizes those that invested earlier or more comprehensively.

For a national pharmacare program to succeed, all corners of the country must be brought along for the ride. That does not mean that the program must look identical in all provinces. While potentially more messy and complicated than a simple gap-filling exercise, embracing Canada’s federal nature offers a way forward.

The principles we already rely on to manage the flow of funding between the two orders of government can be drawn on to guide us on pharmacare. Insisting on equity across provinces without imposing uniformity, for instance, is one such principled approach. A national pharmacare program could allow for asymmetry (with, for instance, Quebec keeping its existing program while a new federal program picks up the slack elsewhere), as long as the federal government is prepared to compensate those provinces that are funding their own programs. Or the federal government could negotiate a new national standard for pharmacare across the country, provided it was prepared to minimize the risks to provinces by committing to a funding escalator that would match the expected increase in drug expenditures as Canadian society ages.

The door to national pharmacare therefore remains open, despite the complexity that the federal government faces in layering a new program over numerous existing ones. The only thing the federal government can’t do is ignore the potential interactions between a new federal program and existing provincial ones, and in particular, ignore the risk that a poorly managed rollout will introduce inequities in federal treatment.

Inevitably, this will make any of the options under consideration more expensive. It will not be just a question of adding new federal dollars on top of existing provincial ones, but using federal dollars to compensate some provinces to avoid inequitable treatment. But departing from this principled approach to managing responsibilities and risks in the federation would make a national pharmacare program that delivers what Canadians expect extremely difficult to achieve.

Published in The Ottawa Citizen

Release Date

September 18, 2018


Andrew Parkin
Erich Hartmann

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