If Justin Trudeau granted the wishes of the New Democratic Party (NDP), Canadians would have a brand new national drug insurance plan for Christmas. But there are less complicated and less expensive ways to meet the very laudable objectives of the New Democrats.
Their idea of 100% nationalizing drug insurance in Canada, because that’s what we’re talking about, is not the best solution to the current problems. And the side effects are likely to hurt.
There is no evidence that the system will be better managed by a gigantic bureaucracy than by insurance companies which, despite all the criticisms that can be made of them, have the merit of being in competition.
If the past is any guide to the future, the launch of a national drug insurance plan could well turn into a nightmare.
Talk to federal officials protesting across the country on Monday. Everything has been going wrong since the transition to a new insurer, Canada Life, four months ago. This is without counting the setbacks of the Phénix pay system which is still struggling to regularize 242,000 files eight years after its implementation.
So, imagine if the federal government took control of the drug insurance of 40 million Canadians! It’s scary.
Beyond logistics, we must also talk about the bill for a national plan which could cost the public $13.4 billion in 2027-2028, according to the Parliamentary Budget Officer (DPB)1. Canada does not have the means to pay the bill, in a context where rising interest rates are swelling its deficits and forcing it to tighten its belt.
And even if Ottawa had the means, let’s not forget that the provinces already have their own drug insurance system. Why would the federal government trample on their area of jurisdiction? We don’t need another constitutional dispute.
Especially since we said it from the start: there are simpler and less costly ways to achieve the NDP’s objectives.
We agree that all Canadians should have access to the medications they need, without putting their financial health at risk. Currently, 2% of Canadians are not insured and 10% are not sufficiently insured.
But in Quebec, drug insurance is compulsory for everyone. Those who do not have access to a private plan are covered by the public plan of the Régie de l’assurance santé du Québec (RAMQ). The annual premium is a maximum of $731 and policyholders never pay more than $100 per month (less for those with low incomes).
First suggestion. Instead of creating a new plan from scratch, Ottawa could make drug insurance compulsory for everyone, as is the case in Quebec and other provinces, by providing uniform conditions that would allow the less fortunate not to be suffocated by the amounts to be paid.
Furthermore, supporters of a national regime argue that the creation of a single organization would make it possible to negotiate better prices for all Canadians. These economies of scale, which the PBO puts at 2.2 billion per year, are not to be disdained. But it is not necessary to create a national regime to achieve this.
Second suggestion. Ottawa could simply centralize the negotiation of drug prices for all plans in Canada, both private and public. This strike force would make it possible to lower prices for everyone.
This would be a great step forward in Quebec, since the current system is unfair. In theory, the price of drugs (of the molecule) is the same for everyone. Except that the government is taking advantage of its negotiating strength to conclude secret agreements with pharmaceutical companies which paid it rebates of $924 million last year, according to the RAMQ annual report.2.
This is unfair for private policyholders who are not entitled to these juicy discounts.
Let’s talk about one last extremely important issue: the astronomical cost of exceptional drugs.
Treatments costing half a million dollars per year are no longer so rare and put enormous pressure on private plans. Some policyholders find themselves having to pay a premium of more than $3,000 per year, four times higher than that of the RAMQ. Again, this is not fair.
Third suggestion. The federal government could nationalize coverage for very expensive drugs in order to spread the risk among all Canadians.
No, the current regime is not perfect. But there are several ways to improve it and harmonize it across the country.
Currently, the federal government has neither the financial resources nor the political capital to impose a cookie-cutter solution on the provinces which already cover 44% of drugs in the country, while Ottawa has practically no no expertise in the field3.
Let’s be realistic. Our health system is cracking everywhere and the pressure will increase with the aging of the population. In this context, let’s fix what doesn’t work, instead of dreaming of new things that cost a lot of money for nothing.
The position of The Press
Instead of a cookie-cutter national solution, Ottawa should act surgically to ensure that all Canadians are covered by drug insurance without emptying their wallets.