The Canada Pharmacare Act: What do we know, and what do we need to know?
Ottawa is buzzing with anticipation of the introduction of the Canada Pharmacare Act and other measures, expected on Thursday, February 29.
Details of the Liberal’s pharmacare program have been leaking out slowly since NDP leader Jagmeet Singh announced that his party was satisfied with the Liberal plan last Friday, securing his party’s support for the minority Liberal government for another year.
The Canadian Health Coalition, founded in 1979 and comprising citizens, frontline health care worker unions, community groups, students and public health experts, has been campaigning to extend Medicare to include prescription medications for two decades. Here are three questions we’ll be watching as the new program is rolled out.
- How many people will be helped?
The pharmacare program will provide free prescriptions for two classes of medication: contraceptives and diabetes treatments.
According to Action Canada for Sexual Health and Rights, which has advocated for the inclusion of contraceptives in pharmacare, 1 in 5 Canadians have insufficient or no drug coverage. This lack of coverage disproportionately affects marginalized communities with young people, 2SLGBTQ+ people, undocumented people, immigrants, and people of colour most likely to have difficulty accessing contraception or see their choices constrained.
People in some provinces already receive free prescription contraception through provincial plans, and the new federal program will top-up provincial plans to an equivalent level of coverage currently provided by British Columbia for those provinces that join the program.
For diabetes, almost 1 in 10 Canadians aged 20 years and older have been diagnosed with disease, according to Statistics Canada, and three quarters of them use medication to manage their condition. NDP Leader Jagmeet Singh says the new program will cover medication for Type 1 and Type 2 diabetes.
The Canadian Press reports all provinces cover 80 per cent of out-of-pocket costs for youth with Type 1 diabetes, but the coverage for adults with Type 2 diabetes varies widely – from zero per cent in Nova Scotia, New Brunswick and Alberta to a high of 62 per cent in Ontario, data from Diabetes Canada show.
It means that depending on their location, households can be out thousands of dollars a year for diabetes medicines and supplies. It’s unclear whether associated medical devices will also be covered.
- Is it a “single-payer” system with universal coverage for everyone, regardless of income or private insurance?
In their “Delivering for Canadians Now” deal with the NDP in 2022, the Liberals promised, “continuing progress towards a universal national pharmacare program.” But it soon became apparent that there was disagreement on the definition of universal between the two parties (despite the fact the Canada Health Act makes it clear it includes every resident of Canada).
Public health advocates and grassroots NDP members rallied around the “single-payer” model recommended by the 2019 Liberal-appointed Advisory Council on the Implementation of National Pharmacare led by former Ontario Health Minister Dr. Eric Hoskins, while opponents in the pharmaceutical and insurance industries and the business-wing of the Liberal party wanted to limit the program to those without private coverage through an inadequate fill-the-gaps model, currently used in Quebec.
Focus has since shifted to “single-payer” language where prescription medicine coverage is provided by provincial governments through existing plans such as the Ontario Health Insurance Plan (OHIP) or Medical Services Plan (MSP) in British Columbia, both of which are universal programs and eligible for federal Canada Health Transfer funding under the Canada Health Act.
Watch for the Liberal pharmacare program to be single-payer in all but name, focusing instead on cooperation with provinces, which is de facto single-payer. Any mention of means testing based on income, or carve-outs for those with private insurance coverage would cross a red line for the NDP.
However, the companies will take solace in the fact that the program only covers two classes of drugs, and there is no guarantee that if other classes of drugs are added in the future they will be similarly covered through the “single-payer” model (though it would be very likely).
- How much money will be devoted to the program, and what accountability measures will be put in place?
The Liberal pharmacare program may actually exceed their “Delivering for Canadians Now” commitment to the NDP in many ways, particularly by including financing for the two classes of drugs covered by the plan. The original agreement simply required a framework for pharmacare, but now the government will have to provide funding to province to create an even playing-field of coverage for contraceptives and diabetes drugs across the country.
It’s been estimated that the cost for the new federal program will be between $1 and $2 billion, assuming all provinces join the program. The impact of limiting the program to only two classes of drugs has reduced the cost of pharmacare significantly from estimates of much more ambitious programs.
In 2019, the Advisory Council on the Implementation of National Pharmacare recommended a national formulary – a comprehensive, evidence-based list of prescription drugs covered by pharmacare – that will ensure people across the country have access to the drugs they need to maintain their physical and mental health. The incremental public cost to cover essential medicines in 2022 would have been about $3.5 billion, according to Hoskins.
In recent years, studies have put forward much higher cost estimates. The Office of the Parliamentary Budget Officer estimated in 2023 the incremental cost to the public sector (that is federal and provincial governments combined) is estimated to be $11.2 billion in 2024-25, increasing to $13.4 billion in 2027-28.
However, the same PBO study estimates single-payer pharmacare will also reduce over-all drug spending through bulk purchasing, with drug expenditure savings in 2024-25 to be $1.4 billion, increasing to $2.2 billion in 2027-28.
The road ahead
As many people will point out, the anticipated Canada Pharmacare Act will be a positive first step – but hardly the last step to achieve the national universal pharmacare program that was recommended by the Advisory Council on the Implementation of National Pharmacare, and indeed promised by the Liberals in the 2019 election campaign.
Efforts will be required by advocates to continue to expand the classes of prescription medications from two to a national formulary of essential medicines. Furthermore, single-payer coverage for drug coverage beyond the initial two classes is not guaranteed, and will be resisted by proponents of a “fill-the-gaps” approach favoured by corporations.
The battle will not be limited to Ottawa. Certainly, some provinces are more likely than others to cooperate with the federal government, such as British Columbia, Manitoba and the Atlantic provinces, but Alberta and Quebec have already stated their intentions to seek equivalent per capita funding while opting out of the program. Provincial health coalitions are mobilizing to urge their reluctant governments to take part in pharmacare.
After many years of campaigns for universal pharmacare by public health advocates such as the Canadian Health Coalition, and concerted efforts by corporations to derail such efforts, this pharmacare deal is not the end, but an important beginning.
