The risks that come with a national pharmacare program

The push for a national pharmacare system is back in the news, and Canadians are sending mixed messages. According to two recent surveys, a majority of Canadians support the implementation of a universal prescription-drug program, even if most don’t seem to want to pay for it.

An opinion poll conducted by the Angus Reid Institute found that 91 per cent of Canadians support “the concept of a national ‘pharmacare’ in Canada, that would provide universal access to prescription drugs …” But they may not be ready to pick up the tab. The survey also found that 70 per cent are against increasing the GST to 6 per cent – from the current 5 per cent – to pay for the program. If you’re not willing to pay for something you want, that may be a sign you don’t really want it that badly.

Those who are pushing for a national, government-run pharmacare program see it as a necessary measure to control the growth of pharmaceutical expenditures.

What these supporters fail to mention is that such programs keep spending in check by rationing access to new drugs, rather than by being more efficient.

Foreign experience can teach us much about the dangers of adopting a monopolistic drug insurance plan in Canada. The United Kingdom is among the countries that have pushed this line of reasoning the furthest. As a result, U.K. patients for many years had to do without drugs that were approved and recognized as effective and available all across Europe. These restrictions have in all likelihood played a role in the U.K.s’ lower cancer-survival rates compared with most other industrialized countries.

New Zealand, often held up as the ideal model to emulate, provides another cautionary tale. Of all medicines registered between 2009 and 2014, only 13 per cent were added to the list of products that are funded by the country’s public insurer, Pharmac. According to a recent study, 75 per cent of New Zealand general practitioners said they had wanted to prescribe an unfunded medicine in the previous six months. Some New Zealand patients have even emigrated to Australia to access required medical treatments for multiple sclerosis and HIV infection.

Some argue that a government-run pharmacare program would improve access to prescription drugs for the most needy, but international comparisons suggest otherwise. According to a study by the Commonwealth Fund, in 2013, 8 per cent of Canadians with below-average incomes said that they had not filled a prescription or had skipped doses in the previous year because of cost. Although there is room for improvement, this is on par with Germany (8 per cent) and is notably better than France (11 per cent), Australia (14 per cent), and New Zealand (18 per cent) – all countries with national pharmacare programs.

Canadians should be wary of replacing our mixed system with something like what exists in the U.K. or New Zealand. Socializing a larger part of drug spending through a single-payer pharmacare plan would give more power to government and its bureaucrats to make decisions on behalf of the insured. Policies that restrict access to new medicines would be applied across the board and would penalize all Canadians in the same way.

But it seems many Canadians already realize this. According to a recent online survey conducted by Abacus Data for the Canadian Pharmacists Association, 80 per cent of respondents support the idea of a national prescription-drug program. But only 31 per cent favour replacing our current mixed public-private systems, managed by the provinces, with a national, government-run pharmacare monopoly.

While Canadians realize that improving access to medicines for everyone is a worthwhile goal, they are not ready to settle for drug-insurance coverage that is of lesser quality than what they currently enjoy.

Yanick Labrie est économiste à l'Institut économique de Montréal. Il signe ce texte à titre personnel.