A SINGLE, NATIONALLY MANDATED
FORMULARY WOULD REQUIRE
EVERY EXISTING PROVINCIALLY
FUNDED AND EMPLOYER-FUNDED
PLAN TO BE DISSOLVED.
coverage, either through their employer
or through the government.
There are several approaches for the
government and its advisory council to
consider. Some advocacy groups subscribe to the “single national
mandatory formulary” approach, where all Canadians are on the
same plan, but a more achievable approach to national pharmacare
is likely best.
A single, nationally mandated formulary would require every
existing provincially funded and employer-funded plan to be
dissolved. The reaction from stakeholders, namely pharmaceutical
companies, pharmacies, insurance companies, advisors and
unions, to name a few, would be spirited resistance.
Employer-sponsored, or private, drug plans emerged around
1997. Until then, most private health insurance in Canada was
offered through not-for-profit mutuals and cooperatives. Following
some regulatory changes in 1997 and 1998, for-profit companies
quickly grew to account for about 80 per cent of the private health
insurance market in Canada. In 2017, private insurers are estimated
to have spent more than $11 billion on prescription drug
costs in Canada.
Hence, private drug plans have been in place for decades and
more or less provide employees with comprehensive access to
prescription drugs at varying coverage levels (i.e., co-payments).
To dissolve them would disrupt benefit plans across the country
– many of which are public sector unions, with 100 per cent coverage
of all drugs – and without a clear plan of what is set to replace
them, it’s not clear whether this change would be an improvement
for people on private drug plans.
Additionally, this kind of national pharmacare program would
require agreement (or possibly a government mandate) from all
provinces and territories to disband their own provincial programs
and devolve all of the authority and funding to the federal
government. As it stands, each province funds its provincial drug
program for its own residents, based on its own formulary and
decision-making model. Having endured significant backlash in
Ontario during the government’s reforms, this approach would
take tremendous political capital to achieve.
Disruption and industry backlash aside, there are other problems
associated with this kind of national pharmacare plan. The
main economic argument made in favour of national pharmacare
is that a single buyer – in this case the federal government – would
result in significant buying power or leverage over pharmaceutical
companies and thus a lower price for drugs. This is a valid point.
That said, people tend to forget the importance of overall drug
spending and, in turn, reduce the role of consumers. New drugs
sherryyates / 123RF Stock Photo
26 ❚ APRIL 2018 ❚ HR PROFESSIONAL