The national drug insurance plan compromised by the financial context

(Ottawa) Liberals and New Democrats move closer to agreement on pharmacare bill, but a national plan may be further out of reach than ever after this week’s federal fiscal update .

The Liberals have promised to introduce and pass the bill by the end of the year as part of a support and confidence agreement, in which the New Democratic Party (NDP) supports the minority government during of key votes in exchange for progress on common priorities.

It’s now almost impossible for a bill to pass before the recess, but the NDP appears willing to offer some wiggle room on the terms of the deal if it means the Liberals table a plan for an education program. single-payer universal pharmacare.

“We’re more interested in making sure we’re doing things right, and so far we’re moving in the right direction,” NDP Leader Jagmeet Singh said Wednesday.

“But we are going to be resolute and firm in protecting Canadians,” he then warned.

The negotiations take place as Ottawa commits to installing new fiscal safeguards that would keep deficits below 1% of gross domestic product starting in the 2026-2027 fiscal year.

Economic challenge

Health Minister Mark Holland says the economic climate is one of the reasons negotiations with the NDP are taking so long.

Finance Minister Chrystia Freeland released a fall economic statement on Tuesday that highlights how little room the government will have to fund major new programs until 2027 at the earliest.

This is the first year the government currently expects to post a deficit below 1% of projected GDP.

Pharmacare was not mentioned in the government’s budget update, but that is not a surprise.

The law won’t necessarily force the government to launch a national pharmacare plan, so it shouldn’t cost the government anything in the short term, said Marcel Saulnier, a partner at Santis Health.

“I think that the current financial constraints are very significant and that the political issues, both at the federal level and between the federal government and the provinces, make the task difficult,” said Mr. Saulnier, who was executive director of an advisory committee on the implementation of a national pharmacare plan in 2018.

“I imagine they would be looking to create something more like a framework, that doesn’t necessarily have any money attached to it,” he said.

Still, legislation alone won’t make prescription drugs more available without additional federal investment, and he worries that financial constraints could prevent that from happening.

The Parliamentary Budget Officer (PBO) estimates that a universal, single-payer pharmacare plan would cost the public sector approximately $11.2 billion more if fully implemented next year, and that this amount would increase to 13.4 billion in 2027-2028.

The PBO also found that savings of $1.4 billion would be realized economy-wide next year if such a program were implemented, and that these savings could reach $2.2 billion in 2027-2028 , thanks to the improved purchasing power of a single-payer system.

Back to the drawing board?

Scotiabank economist Rebekah Young is skeptical that there will be enough fiscal space in the public purse to cover this additional spending unless the economic outlook changes.

“The path they have charted does not leave room for a full-fledged pharmacare program,” said Ms.^me Young during an interview Thursday.

“Maybe they go back to the drawing board and ask themselves if we can’t afford a universal pharmaceutical company, what’s the best thing to do? » she asked.

The Liberals promised to establish pharmacare during the 2019 election campaign and have taken some steps to make that promise a reality.

The government notably appointed a transition office to create a Canadian Medicines Agency and launched a national strategy on drugs intended to treat rare diseases.

Mr. Singh accused the Liberals of having submitted to their NDP partners a first draft of legislation that favored pharmaceutical companies. He said he would reject anything that did not commit to a single-payer system.

That commitment was solidified in October when party members passed an emergency resolution at their policy convention urging the NDP to withdraw its support for the credits and confidence deal if the Liberals do not commit to “a universal, comprehensive and entirely public pharmacare program”.

If the government intends to strike a deal with the NDP, it could always abandon the budget cuts it committed to this week, as it has done in the past, said Livio Di Matteo, professor of economics at Lakehead University.

“Most of the Canadian government’s spending plans at the federal level have not been limited by any deficit. They usually set guardrails and exceed them anyway,” said Mr. Di Matteo, a specialist in health economics and public finance.

Canadians will learn more about the potential cost of this initiative when the bill is finally tabled in the House of Commons.

The House is scheduled to adjourn for recess on December 15.

In a statement, Holland’s press secretary, Chris Aoun, said the minister’s goal remains to table the Liberal pharmacare bill this year.