Eight provincial health ministers recently organized a roundtable with healthcare professionals and academic experts to discuss how we should transform drug coverage in Canada, with several of them eventually calling for a national pharmacare program. But the question is, what kind?
Some of the suggested reforms were based on international best practices, which overwhelmingly emphasize a single payer universal public drug coverage system equipped with the institutional capacity to ensure value for money. The evidence consistently shows such a system would provide better access while substantially reducing costs.
Nevertheless, private insurers, the drug industry and some think tanks are advocating for the implementation of a Quebec-style hybrid, private-public drug coverage for the rest of Canada.
This won’t work for Canada because it no longer works for Quebec.
In 1997, Quebec created a drug coverage system making it mandatory for workers to enroll in private plans when they are available. Those for whom no private plan is available end up on the mandatory public plan. Thus, all Quebecers are covered by some form of drug insurance. Premiums can be very expensive, and patients still have to pay an out-of-pocket a maximum co-payment of 32.5 percent when purchasing prescriptions, which can add up to more than $1,000 a year.
What is the result of Quebec’s hybrid model? While access to medications improved when the plan was implemented, by keeping a fragmented system based on multiple public and private plans Quebec has not developed the needed institutional capacity to contain costs. Canada has the world’s second-highest per capita costs for prescription drugs (only after the United States), and Quebec has the highest costs per capita among all provinces.
Quebec’s system may have been a great step forward 20 year ago, it is not a model for the 21st century. While providing better access to prescription drugs, the system remains inequitable, inefficient and unsustainable, according to a recent report by Commissaire à la santé et au bien-être.
Inequity persists in the Quebec system because drug prices vary between public and private plans. The public plan tends to balance its budget by shifting costs onto the shoulders of private plans rather than containing its costs. Since insurance companies are paid as a proportion of spending, they rarely complain.
So who pays? Employers and employees end up paying steep premiums. This increases labour costs and reduces the competitiveness of Quebec’s businesses.
Mandatory private coverage is also not related to income, so the costs can be substantial for some, especially the working poor. I was shocked when a student working part time told me she paid $190 of her $514 net monthly income on drug premiums.
There’s also the systemic issue of institutional ‘skimming’ between “good” and “bad” risks. Seniors, people on social assistance, or unemployed people end up on the public plan while those with a “good job” (the wealthier and healthier population) enroll in private plans.
Then there’s the inefficiency. For decades, private plans remained fixed on the idea that a “good drug plan” covered all new drugs at any cost, even when a lower cost alternative was available.
Considering the majority of new drugs do not provide therapeutic benefits over existing therapies, drug plans without the capacity to evaluate cost-effectiveness become a major source of waste. A good drug plan also requires the capacity to negotiate with drug companies to obtain better prices.
Looking at the numbers, it’s surprising that all public employees in Quebec are required to enroll in costly private coverage, given administration costs account for 1.7 percent for Quebec’s public plan, yet 18 percent for private insurers. More than 30 percent of all people enrolled on private plans are public employees. This is a massive indirect subsidy to insurance companies.
In a presentation last November, former health minister Jean Rochon, who implemented Quebec’s drug regime 20 years ago, said that at the time such a hybrid model was the right thing to do. But he added the system is outdated and it’s time to tackle the new challenges relating to drug coverage.
The question, he said, is not “if,” but “how” we should implement universal public drug coverage for everyone.
Corporate lobbies and doubt manufacturers are working hard, however, to tout Quebec as a model for the rest of Canada – against the best evidence.
Marc-André Gagnon is an assistant professor with the school of public policy and administration, Carleton University.