Prescription drugs are seen on shelves at a pharmacy in Montreal, March 11, 2021. The Liberal government’s pharmacare bill, which envisions supplanting the private insurance market for a public one, is largely a solution in search of a problem.Ryan Remiorz/The Canadian Press
Canada’s universal health-care system is sometimes called unfinished because it didn’t include prescription drugs when it was created five decades ago.
There is merit to the idea that including drugs then would have been a good idea. In that alternate history, Canada would now have a universal pharmacare system, similar to many other developed nations, such as Australia and New Zealand, that provides broad access and controls costs.
But that is not the world in which we live. In the Canada of today, around 40 per cent of prescription drug spending is covered by various federal and provincial insurance plans, around 40 per cent is covered by private insurance and about 20 per cent is paid out of pocket.
It is also a Canada that has pressing health care challenges – as this space enumerated at length in our recent An Unhealthy Debate series – and where the billions of dollars a universal pharmacare system would cost could be more urgently directed to overcrowded emergency rooms or family doctors’ offices.
The Liberal government’s pharmacare bill, which envisions supplanting the private insurance market for a public one, is largely a solution in search of a problem.
The bill, which passed third reading in the Senate on Thursday, is the first step toward creating a universal, public health insurance plan for pharmaceuticals.
At first, Health Minister Mark Holland suggested it would merely offer another choice to Canadians. The Liberals even castigated Conservative Leader Pierre Poilievre for suggesting that a public plan would supplant private ones.
But Mr. Holland made the government’s intentions clear in a recent letter to senators, in which he said the bill would lead to the creation of a public plan and “all residents would be covered by pharmacare.”
Such an approach would add at least $11-billion a year to the federal books this year, according to a costing from the Parliamentary Budget Officer (PBO), on top of the government’s estimated deficit of nearly $40-billion.
And for what? Replacing a large part of the private market that works fine for many Canadians?
The federal government chose a much smarter tack in its dental-care plan, which this space has supported. It was aimed at filling in insurance gaps by providing means-tested coverage for Canadians who did not have coverage.
Ottawa could offer targeted support to the estimated 5 per cent of Canadians who have no drug coverage.
It’s not even clear Ottawa needs a major new bill to do that. In testimony at the Senate committee studying the bill, University of British Columbia professor and pharmacare expert Steven Morgan said Ottawa could expand coverage in key areas, such as contraception, through negotiations with the provinces. (Prof. Morgan, who supports universal pharmacare, suggested the bill needed to be radically rewritten because of its incredible vagueness on how Ottawa would set up such a system, which is a whole separate issue.)
The government’s 2019 report chaired by doctor and former Ontario health minister Eric Hoskins rejects a fill-in-the-gaps approach for pharmacare because, he argues, a single national insurance body would have the best leverage in negotiating prices with pharmaceutical companies.
The PBO estimates that economy-wide savings on drug spending would have been $1.4-billion in 2024-25 under a national pharmacare plan. But, again, we would be spending $11.2-billion in federal funds to get there.
Meanwhile, the government has other major new social spending programs that need attention. The dental-care plan, which began rolling out this summer, has been making changes to respond to concerns from dentists and dental hygienists who were reluctant to support it. That is good and should continue, as the program rolls out to all remaining eligible Canadians next year.
The Liberals’ child-care plan, though, looks to be on shakier ground. It has made remarkable progress on reducing daycare costs for many families. But it is no way universal, as thousands of promised new child-care spaces have not materialized and many young families still struggle to find a spot. Ottawa and the provinces need to focus on fixing the program as funding agreements enter their final stretch.
There is enough on Ottawa’s plate on health care and beyond. Adding an expensive public insurance plan, especially on the eve of an election, is a project better left unfinished.