Perspective on the new National Pharmacare framework

The following are my thoughts on the recently announced National Pharmacare framework that keeps intact the supply and confidence agreement between the NDP and Liberals to June 2025. The Ontario Pharmacists Association's position on a National Pharmacare program is to ensure that all Canadians have access to their medications where and when they need it. No Canadian should go without their medications because of financial reasons. A recent survey demonstrated that an increasing number of Canadians are going without their medications due to financial reasons. In Canada, we currently have a mixed payor (coverage for medications) model with each province implementing a form of their own pharmacare coverage for access to medications. However, even with these programs in place, there are a number of Canadians that do not have access to medications. There are ways to improve coverage for programs like Trillium in Ontario and address the medication gaps without shifting people with good insurance coverage to a public plan and that should be the focus of any National Pharmacare program (often more drugs are covered in private insurance formularies than public programs like the Ontario Drug Benefit Program so moving from private to public coverage is actually covering less medications). We support universal access to medications in a mixed payor model that fills the gaps. Universal coverage can be achieved without implementing a single payor system that could potentially introduce other unintended consequences as we experienced in Ontario with the first introduction of the OHIP+ program.Read: Professional services and total compensation: A model shift?The draft legislation for a National Pharmacare program is still short on details but what we do know is that there are references to a single payor principle in the framework and it is going to start with contraceptive and diabetic medications. It looks as though these medications will be covered for all Canadians regardless of whether or not they have private or employer sponsored benefit programs. Here is an example:Let’s take a 35 year old diabetic patient on private insurance. They will now be eligible for coverage under a public coverage plan like ODB in Ontario just for that medication. What does this mean: it means the private insurance company saves a lot of money and it will do so on the back of current government savings and pharmacy. How does this work? Well we know from the first incarnation of OHIP+ in Ontario that pharmacy lost an average of $5 per dispense. How does this happen? The public plans like ODB pay a lower dispensing fee (ON has the lowest dispensing fee at $8.83) and the allowable markup is lower and based on Manufacture List Price (MLP) not Wholesale Acquisition Cost (WAC). Now, how does the provincial government lose money? Many of these medications have what are called Product Listing Agreements (PLA'S) which provide confidential rebates to government for listing their product on the formulary. If the federal government is paying for these and making it mandatory in every province it potentially removes the incentive for the drug manufacturer to negotiate and offer these rebates in each province. Since the majority of Canadians already have coverage for these medications (e.g. with private coverage and provinces like BC already covering contraceptives for residents) the only real winners out of this are private insurers and a small subset of non-insured diabetics. Previous estimates from the Parliamentary Budget Office (PBO) put the cost of a full single payor National Pharmacare program at approximately $30B annually—a number that is likely low. The more sensible approach here is to fill the gaps and provide coverage for Canadians with underinsured scenarios, such as unaffordable high co-pays or deductibles, and target the uninsured. This is how they constructed the Dental Care program.Read: 'An exceptionally important conversation’: Debating preferred pharmacy networks in the wake of Manulife backlashThe better approach is to target the taxpayer dollars where they are needed and work with each province to fund the gaps of their pharmacare programs. This addresses the problem and is cost-effective. This model worked more recently with a bi-lateral arrangement between the federal government and PEI government. The details on how this is going to be implemented have not been shared yet but it would appear that the provinces will continue to administer the programs under the current scheme with federal funding. How this will evolve from here remains to be seen but there are risks associated with the current approach: financially unsustainable for government, many Canadians will end up with LESS coverage, and pharmacies will be reimbursed less. This can be avoided if we take the power and politics out of driving the policy decision and focus on solutions that cover Canadians without coverage.Justin Bates is CEO of the Ontario Pharmacists Association.

Perspective on the new National Pharmacare framework

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