Amalgamation always seems like a good idea. After all, we do it with municipalities in order, we believe, to prevent duplication and save money.
I don’t know much about municipal amalgamation, but joining forces for the same reasons has been suggested with something I do know about – pharmacare programs. Canada has at least 16 separate drug public plans – each of the provinces, plus ones for the RCMP, veterans, aboriginals and others, as well as hundreds of private drug plans.
Wouldn’t it also be easier – and cheaper — if we just had one national drug plan?
Earlier this summer, at least eight provinces got together to discuss a national drug plan. I agree that cost-efficiencies, a better ability to negotiate drug prices and other economies of scale makes it a compelling idea. Yet, if done poorly, a national drug plan could be an utter disaster, characterized by waste, political coverage decisions and even more irrational and unsafe pharmaceutical use than we’ve got now.
Let’s take a major new drug to see how we might fare with a national drug plan. The diabetes drug Januvia (generic name: sitagliptin) globally earns about $6 billion per year for its manufacturer, Merck. It costs about $3.50 per pill in B.C. and lowers blood sugar on par with older, cheaper diabetes drugs.
Proponents of a national drug plan would assert that with the buying power of one big agency we’d negotiate much better prices for Januvia. Instead of paying $3.50 per pill maybe we could get it for $2 a pill, which is about what Australia pays seeing as it has national buying power. Sound good?
Of course, but only if Januvia had advantages over older, cheaper diabetes drugs. Sadly, independent experts say that drugs like Januvia are less effective than older diabetes medications.
For my tastes, the first priority of a national drug plan shouldn’t be price, but evidence.
If the best available evidence suggests that a new, more expensive drug like Januvia is in the “not better or worse than comparator drugs” category, you’d need strict rules in place to make sure the drug was only covered for the subset of people who can’t tolerate other diabetes drugs. You’d use the money you saved to expand coverage for drugs that are cost-effective so that more Canadians can be covered for high drug costs.
While taxpayers in Ontario and Quebec pay tens of millions a year for Januvia, the B.C. government recently made a hard decision not to kowtow to lobbying pressure when it decided BC Pharmacare won’t pay for Januvia. Why? Both because there is little evidence the drug could extend the quality or the length of a diabetic’s life and the fact that Merck refused to lower the price to bring it on par with the other DPP-4 inhibitors. That’s the kind of spine that would be essential in a national drug plan.
Yet if you look at other federal health-related organizations (Health Canada, CIHR and CADTH) you will find little national spine. We have a watchdog that doesn’t bite, a national health research funder that encourages Canadian researchers to “partner” with drug companies and a technology evaluator that takes money from drug companies in the form of ‘fees,’ thus making them beholden to the very industry they are supposed to assess.
Any national pharmacare program would need an absolute firewall to protect it from the inevitable politics of drug coverage, otherwise you’d be left with even more irrational and expensive drug coverage decisions.
Municipal amalgamation and a national pharmacare program both sound great in theory. But in practice? While I am usually optimistic about doing things collaboratively and working for efficiencies, I’d hate to see Canada accidently create a national form of institutionalized drug coverage that can’t make hard, politics-free and evidence-based decisions.
Alan Cassels is a pharmaceutical policy researcher and author.
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