A deep dive into the assumptions suggests drawbacks to public universal coverage
The federal director of the Canadian Taxpayers Federation has added his voice to the dissenters against the implementation of pharmacare, arguing that a plan based on all-public coverage would entail more significant costs than assumed.
Referring to a report by the Parliamentary Budget Office (PBO), Aaron Wudrick noted that the estimate of $4.2 billion in savings for Canada’s 2015-16 fiscal year, had the hypothetical plan been in place at that time, overlooks important details.
“For starters, modelling any new big social program on our creaking health care system should set off alarm bells,” he said in a commentary piece published on CBC News. He noted that provincial governments already sink between 34% and 43% of their entire budgets into the healthcare system, which is facing rising costs, increasing wait times, and the challenge of an aging population.
“Tacking a massive new drug plan onto a system already under tremendous strain would be unwise,” he said.
The range of drugs covered under a universal program would also likely inflate current costs, Wudrick added. Private drug plans tend to cover more drugs than existing government plans, and tend to approve new drugs more quickly; to offer the same breadth of coverage already enjoyed by 23 million privately covered Canadians, an all-public national plan would have to be based on the same or a similar formulary.
“[M]any prospective discounts have likely already been achieved thanks to the pan-Canadian Pharmaceutical Alliance,” he said, arguing that the bargaining-power advantage of a national plan may not be as significant as proponents hope. Pointing to Quebec’s universal system, where drug-plan utilization is 35% higher than the rest of Canada, Wudrick also suggested that the PBO’s assumed 12.5% increase in drug utilization under a national program is an underestimation.
“In short, hiding the ‘sticker price’ of drugs may induce Canadians to use far more of them, leading to a much bigger bill for Canadian taxpayers,” he said. “While it's certainly true that there are gaps in the current system … it doesn't mean wiping out the entire market of private sector drug coverage is the best solution.”
