As the only country in the world to boast a universal healthcare system that does not cover prescription drugs, Canada has been struggling with the concept of ‘national pharmacare’ for a number of years now, with fierce advocates on both sides of the debate.
Canada [has] some of the highest drug prices in developed countries globally, at 25 percent higher than the OECD average
Those in favour cite a number of dismal statistics. Due to public and private insurance systems varying across provinces and employers, a fifth of Canadians are left without any drug insurance. According to a government advisory panel, roughly 10 percent of Canadians fail to fill their prescriptions because they cannot afford to.
As a result of a fragmented healthcare system, federal and provincial entities lack the purchasing power to negotiate drug prices to the same extent seen in countries with single-payer systems like the UK, resulting in Canada seeing some of the highest drug prices in developed countries globally, at 25 percent higher than the OECD average.
According to the Canadian Institute of Health Information (CIHI), the country’s healthcare spending has grown another four percent in 2019, reaching CAD 264 billion – 11.6 percent of Canada’s GDP. Prescription drug spending was estimated at CAD 34.3 billion – around 12 percent of overall healthcare spending – in 2019.
The national pharmacare debate has been raging on in various guises over the years. University of Toronto Canada Research Chair in Health Justice Dr Nav Persaud shared that since the 1960s, five separate national commissions have recommended the inclusion of prescription drugs in Canada’s universal public health system. In 2010, the Pan-Canadian Pharmaceutical Alliance (PCPA) was established by provincial premiers so that provinces could participate in joint drug negotiations. In 2018, it was estimated that PCPA negotiations have saved over CAD 1 billion. Many stakeholders now argue that the COVID-19 pandemic has made this topic more urgent and relevant than ever.
According to polls, two-thirds of Canadian voters support a universal drug plan. Accordingly, in October 2019, Canadian prime minister Justin Trudeau made drug pricing a core tenet of his re-election manifesto and his minority government unveiled a multitude of reform amendments – a first in over 30 years, reigniting a national debate over the so-called ‘national pharmacare’ plan.
Eric Hoskins, former Ontario minister of health and long-term care, while chair of the federal Advisory Council on the Implementation of National Pharmacare in 2019, estimated that a fully implemented national pharmacare plan would save Canadians CAD 5 billion in the first year alone – and even more annually after that.
On the other hand, industry groups have sounded concerns over these reforms limiting Canadian patients’ access to new innovative drugs as well as discouraging investments in the Canadian life sciences sector, from clinical trials to manufacturing. In 2018, the Canadian pharma manufacturing sector employed around 30,000 people, having seen growth of 10.5 percent over the past ten years.
Industry stakeholders have also highlighted the global advent of new and innovative therapies such as cell and gene therapies as well as rare disease treatments. The Canadian innovative pharma association, Innovative Medicines Canada (IMC), has stressed that the PMPRB regulations would have particularly severe impact on the availability of many rare disease medicines, the clinical trial investment in Canada, and sustained growth of the country’s overall life sciences sector.
As a result, IMC and 16 of its member companies have applied to the Federal Court of Canada for judicial review of the published amendments announced by the Canadian government that would affect the way the Patented Medicine Prices Review Board (PMPRB) – which sets the price ceiling on patented drug prices using international benchmarks – makes its decisions. In addition, five IMC members – Merck & Co. (MSD outside Canada and the US), Janssen, Bayer, Boehringer Ingelheim and Servier – has also filed a legal contestation on the constitutional aspect of the PMPRB reform.
With complex and compelling arguments on both sides, it remains to be seen how this iteration of a perennial national debate will play out.
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