On June 6th, 2019, Dr. Eric Hoskins, Chair of the Advisory Council on the Implementation of National Pharmacare, along with Mr. Vincent Dumez, Member of the Advisory Council on the Implementation of National Pharmacare announced the Advisory Council’s final recommendations and released the final report.
One key issue to bear in mind is Pharmacare may require “the constitutional formula” for approval (approved in 70% of participating provinces and territories, representing two-thirds of their combined populations). This is expected to raise questions if enough provincial support will exist to pass any legislation. And if passed, any province presumably still has the option to opt-out.
The report also proposes some significant financial numbers tied to a one-payer system.
The Council report suggests a National Pharmacare system would save 10% of drug costs.
- For the incremental costs of National Pharmacare, federal contributions should reflect the full incremental costs, projected to be $3.5 billion in 2022 and $15.3 billion in 2027.
- The proposed system proposes it will save households $350 on average and reduce costs for employers by $750 per employee.
The Council Identified 60 Recommendations
The report includes a total of 60 recommendations for implementing a National Pharmacare Program in Canada. The recommendations are extensive, identifying the landscape of drug coverage today, highlighting key challenges facing the Canadian drug prescription system, and proposing a pathway for implementing and financing National Pharmacare.
- Embodying Principles: Federal government to work with provincial and territorial governments to establish a universal, single-payer, public system of prescription drug coverage in Canada. The council proposes the five fundamental principles embodied in the Canada Health Act: Universal, Comprehensive, Accessible, Portable, and Public be applied to National Pharmacare.
- Copayments: Out of pocket costs to be contained and would not exceed $5 per prescription with a copayment of $2 for essential medicines. Additionally, an upper annual maximum of $100 per household per year is recommended. Additionally, those receiving social assistance, government disability benefits or federal Guaranteed Income Supplement benefit should be exempt from copayments.
- Implementation: Begin implementation in 2020. By January 1, 2022, the launch of National Pharmacare will begin with a list of essential medicines. The council recommends expanding the initial essential medicines list toward a fully comprehensive formulary no later than January 1, 2027.
- Canada Drug Agency (CDA): Agency recommended to oversee National Pharmacare and use clinical and economic effectiveness to support development of a national formulary. It is recommended the CDA negotiate prices and arrangements with manufacturers (something currently done through the pCPA).
- Biosimilars: Recommends requiring biosimilar substitution for innovator biologics.
- Expensive Drugs for Rare Disease: The council recommends the CDA establish a distinct pathway for the consideration of expensive drugs for rare diseases. As part of this framework the agency should work with clinicians and patients to gather structured real-world evidence on the impact of rare disease drugs and negotiate performance-based funding agreements with manufacturers.
- Financial: The council recommends the federal government provide long-term funding to provinces and territories. This includes the incremental cost of National Pharmacare. Allocation of the budget would be similar to how Medicare is currently set-up. A recommendation is made that inter-governmental financing arrangements requires the consent of the Parliament of Canada and at least 70% of participating jurisdictions representing two-thirds of their combined population.
- Private Payers: Private insurers would be permitted to provide coverage for copayments, as well as for drugs not on the national formulary.
Implications to Canadian Pharmaceutical Industry:
- What future lies ahead for the pCPA mandate if National Pharmacare comes to fruition; if it does continue the mandate may shift with a Canada Drug Agency taking charge of negotiations.
- The role of private insurance could significantly decrease, raising questions about access to treatments that are currently reimbursed through private plans, which can be better than public access. In the report, private insurance expenditures are forecast to plummet to $3.2 billion in 2027.
- National Pharmacare may have significant implications for innovative drugs entering Canada. With one health assessment body and one negotiation body (Canada Drug Agency) ensuring national access is the same throughout Canada, this centralized system may challenge opportunities to negotiate access on regional levels to address health care priorities of the provinces.
For more information, the Final Report from the Advisory Council is found here.