June 19, 2024

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Pharmacare’s design could further fragment and politicize Canada’s health system

4 min read

Over the last several decades, prescription drugs have become critical to preventing, managing and treating health conditions, yet Canada’s health-care system has not been updated to ensure that all Canadians can access outpatient medications.

After letting report after report recommending designs for drug programs gather dust, the Government of Canada is finally moving forward with testing “pharmacare” models.

While details about these models are lacking, both seem to entail piecemeal expansion of drug coverage following separate negotiations with each province. As a comparative health systems researcher focusing on Canada and the United States and former director of American public health insurance programs, I believe this approach risks incorporating several negative aspects of the complex and unequal U.S. health insurance system.

Proposed Pharmacare approach

On Feb. 29, federal Health Minister Mark Holland introduced Bill C-64 (Pharmacare Act) in Parliament stating government’s intent “to work with provinces and territories to provide universal, single-payer coverage for a number of contraception and diabetes medications” as a first step toward national universal pharmacare.

In subsequent comments, he referenced a federally-supported pilot project in Prince Edward Island as being under consideration for transfer to the rest of the country. This project “fills in the gaps” by expanding the list of drugs covered by that province’s 26 pre-existing public drug plans while also reducing plan participant co-payments.

Closeup photo of a woman's hands with a prescription bottle and two blue and white capsules
While it might seem that how drug coverage develops is a high-level matter for policymakers, the pathway the policy takes might shape how Canadians receive and finance their Medicare benefits in the future.

According to the minister’s statements and the legislative text, whichever model the federal government ultimately pursues will be implemented and funded through bilateral agreements with the provinces and territories.

The proposed pharmacare agreements could mirror the three-year Working Together bilateral agreements that the federal government recently struck with each province and territory to support their initiatives in four shared priority areas: family health, the health workforce, mental health and substance abuse, and health information technology.

If that is the case, each pharmacare agreement would authorize a set amount of funding for a set term in support of specific projects to expand coverage of prescription drugs and related products intended for contraception or the treatment of diabetes. It is unclear whether the projects would be initiated solely by the provinces, or whether the federal government would dictate ideas.

Since current provincial drug plans vary widely in the number of drugs and people they cover, the provinces’ projects could also vary widely in scope and cost if the federal government wants all provinces to cover all diabetes drugs and contraceptives and/or provide diabetes drugs and contraceptives to all residents by a set date.

Pharmacare could resemble ObamaCare

Pharmacare implementation could end up resembling that of the Affordable Care Act, known as “ObamaCare” — the statute enacted by former U.S. President Barack Obama in 2010 to expand public health insurance coverage, which many Canadians are familiar with due to widespread reporting of its rocky implementation.

More than 10 years after the Act’s initial deadline for all states to expand Medicaid coverage to low-income families, 10 states still have not done so, in some cases because they are insisting that the federal government fund 100 per cent of the costs in perpetuity and/or permit them to alter the coverage criteria. Some states are still engaged in legal proceedings against the federal government.

Meanwhile, millions of eligible Americans are not enrolled because they cannot understand or navigate the application process. Those who did receive coverage cannot carry it from state to state.

Prime Minister Justin Trudeau and two others sitting at a table
Prime Minister Justin Trudeau, centre, meets with diabetes health-care professionals as he visits the Peel Memorial Centre for Integrated Health in Brampton, Ont., on March 7, 2024.

Just a decade ago it would have been unimaginable for Canadians to believe that their health insurance system could experience the ideological conflict and inaccessibility characteristic of the American system, but several developments have made it possible.

Seven of the 10 provincial premiers are conservatives who increasingly challenge Prime Minister Trudeau’s Liberal government on ideological and partisan grounds, often fostering popular resentment against policies perceived to favour certain provinces. Several have challenged Health Canada by promoting private pay for medical imaging, surgeries and even clinical care in contravention of the Canada Health Act.

In addition, the federal government has demonstrated a new preference for rolling out new benefits incrementally in order to minimize their fiscal impact. It recently created a new dental care plan for seniors to fill another gap in Medicare services, with eligibility criteria and a provider recruitment strategy similar to that of the U.S. Medicaid program. It is proving to be unpopular with seniors and dentists due in part to the paperwork burdens it imposes upon them.

Preserving Medicare

Medicare has long been the pride of Canada and envy of other countries because its design requiring each province and territory to insure essentially the same services for all persons, including those moving from other provinces, has made it straightforward, efficient and fair to navigate.

It is worthwhile for Canadians to follow the pharmacare debate. While it might seem that how drug coverage develops is a high-level matter for policymakers, the pathway the policy takes might shape how Canadians receive and finance their Medicare benefits in the future.


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