$100,000 less a year: What pharmacies could lose on average with a fully public pharmacare

Giving all Canadians access to the medications they need is, on the surface, a great idea. But pharmacies could suffer a significant financial hit if the universal pharmacare promised by the federal government is rolled out as a fully public, single-payor program, leaders at the Neighbourhood Pharmacy Association of Canada said at a recent online session. At the same time, Canadians could end up with even more limited access to medications if a wholly public pharmacare plan fails to deliver a formulary as comprehensive as what private plans today offer. “Private plans typically have more robust formularies than even the most robust public plans,” said Neighbourhood Pharmacy CEO Sandra Hanna, who spoke at the April 14 session alongside the association’s vice president, Shelita Dattani. “Analysis conducted a couple of years ago comparing public and private coverage . . . found that 7.7 million Canadians are currently taking medicines that are paid for by their private plans but would not be paid for by their provincial formularies.” That translates to about 20% of Canadians who could lose access to the medications they rely on if private coverage was replaced by a fully public plan, she added. Pharmacists and pharmacy operators could also lose out in a big way because a fully public plan will likely mean lower dispensing fees and markups than what private plans currently pay. Read: NDP expects phased in approach to national pharmacare promise in deal with Liberals “We’re looking at private plans that typically have dispensing fees of between $10 to $13 versus public plan dispensing fees which might be anywhere from $6 to $12,” Hanna, told Pharmacy Practice+Business. On an aggregate level, this difference between private and public dispensing fees could add up to revenue losses of about $1 billion a year, or an average loss of $100,000 per year per pharmacy. “That could be equivalent to one less pharmacist they can afford to hire, or hundreds of reduced pharmacy hours because they can no longer afford to operate at the same level as they do today,” said Hanna. “A fully public plan will place a lot of strain on pharmacy and it doesn’t make sense because you’d be moving people from a plan that covers more medications to a plan with less coverage.” According to the Canadian Life and Health Insurance Association, 26 million Canadians have drug coverage through private supplementary health plans, which account for about 35% of drug spend in Canada. A small percentage of the population—between 2% to 15%—have insufficient or no drug coverage. Read: Pharmacare proposal raises some serious questions What would make more sense than a wholly public pharmacare for all Canadians, said Hanna, is a plan that fills in this gap in coverage. “We can still achieve coverage for all by building on a mixed-payor system that we already have in place today and prioritizing that 2%-to-15% gap who do not have coverage or don’t have access to coverage, or who require additional coverage,” said Hanna. Read: A deep dive on Dr. Hoskins' pharmacare proposal This mixed-payor system would come at an estimated cost of $3 billion to $5 billion, compared to $20 billion for a fully public system, she said. While the recently announced federal budget confirmed the government’s commitment to national pharmacare, it skimped on the details of what this program would look like. Hanna urged pharmacists to educate themselves on the issue so they understand the implications of potential program structures. “This is important for patients as well, because the more we can educate ourselves the better we can answer our patients’ questions about pharmacare,” she said. “I also encourage pharmacists to talk to their MPs and MPPs to share their concerns.” Read: Expert panel recommends single-payer pharmacare plan for Canada

$100,000 less a year: What pharmacies could lose on average with a fully public pharmacare

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