Universal Drug Coverage In Canada's Health Care System

•• Identifies the issue (~1 pg)
•• Identify topic and clearly explain the issue.
•• Discuss the relevance to the Canadian health care system, health of Canadians and/or to the nursing profession.
•• Background (~1-2 pg) • Provide background on the issue and its relevance.
•• Clearly articulate topic in the introduction and logically link to Canadian health care system
•• Provide background information that gives context for the analysis.
•• For Canadian Data – see CIHI, StatsCan, ONA, CNA, RNAO policy documents as a starting place.
•• Stance (~1 pg) • Clearly articulate stance on the issue
•• Identify various stakeholders’ stance and priorities (i.e. nursing, federal government, provincial government, interest groups, patients, etc.)
•• Critical Analysis (~2 pg) • Discuss and examine points of congruence or divergence
•• What are the gaps?
•• Strategies - what actions have been taken or what actions should be taken?
•• Conclusion/implications to nursing (~1-2 pg) • Discuss implications to practice, policy, and/or research.
•• What are the next steps?

Challenges Facing Canada's Health Care System

Canada's medical system is dynamic. The medical system was founded based on principles of portability, universality, public administration accessibility, and comprehensiveness and it faces more challenges due to its expensiveness. The healthcare system is assigned to the provinces, and the national government only retain the responsibility of members of the state and the armed forces. It faces a major challenge in terms of access by Canadians. The healthcare system faces a major challenge in providing access to medicine to Canadians. A suitable solution will be a universal drug coverage program.

Prescription drugs are not consistently covered across the country and many citizens cannot afford the prescriptions they need. According to statistics, about $30 billion dollars was spent in 2016 to fill more than 60 million prescriptions (Canada & Hoeppner, 2010). Pharmacare would be a suitable solution to this. The system would provide a universal insurance coverage for all prescriptions. Apart from insured health services such as hospital care, pharmacare falls within that group in many developed countries. Drug prices have continued to rise in making many Canadian homes have to choose between paying for prescription drugs and paying for other basic necessities. In 2018, an Advisory Council on the Implementation of National Pharmacare famously known as the Council was established to provide advice on how to implement national pharamacare in an affordable manner.

Medicine is an integral part of the healthcare system. Canada's universal health care system is unique from that of other developed countries such that prescription used outside the hospital is not covered. From the onset of Medicare in the 1960's, the intention was to eventually cover medicine. However, a challenge in reaching a consensus presented itself. This was mainly due to a variation in public policy and economic as well as fiscal conditions. The absence of coverage presents a major challenge. Studies conducted note of a major disparity. The Standing Committee on Health recommended the establishment of a universal single-payer drug prescription system.

In Canada, basic Medicare covers prescription given only in hospitals. Coverage of medicine outside hospital varies. For example, many Canadians and their dependents are covered under an employer-funded private benefit plan. Out-of-pocket pay is very common among low-income, self-employed and part-time employee Canadians.

Prescription coverage varies depending on the province and territory, across the coverage of the region depends on age-group and income group. Some combine both. Its organization presents serious challenges to Canadians, according to the Conference Board of Canada, an estimated 95% of Canadians are qualified for prescription coverage. Affordability presents a serious challenge due to annual maximums, co-payments and deductibles.  This has resulted in additional doctor visits and admissions (Law, 2018). Furthermore, it has led to more premature deaths among working-class Canadians (Lopert, Docteur, & Morgan, 2018). 

Prescription Drugs in Canada

Expenditure on drugs has grown significantly from an estimated $2.6 billion in 1985 to 33.8 billion in 2017 (Canadian Institute for Health Information, 2017).  Canada spends more than almost any other country in the OECD member countries on prescription drugs. The combined coverage in Canada is not suitable for innovative drugs. A large burden is placed on households, employers and governments due to increasing costs.  According to the Patented Medicine Prices Review Board, Canadians spend 20% more than the OECD median on innovative medicine. The Patented Medicine Prices Review Board (PMPRB) allows the federal government to assert price controls on innovative drugs. The government seeks to give PMPRB the means of protecting consumers from hiked brand medicines by amending the Patented Medicines Regulations. Through the pan-Canadian Pharmaceutical Alliance, the federal government works with the territories and provinces to reach terms on lower prices for generic drugs as well as innovative medicines. It is estimated that savings worth $1.28 billion were attained by CPA.

Over a decade, the number of drug products on the Canadian market with an average annual cost per patient of more than $10,000 has tripled. This necessitates the improvement of affordability of prescriptions.

As drug costs continue to rise, employer-funded benefit plans encounter a number of challenges. Some employers may take up the increased costs while others have their employees take up a greater share through co-payments, deductibles and annual or lifetime plan maximums or may choose to limit salaries and health benefits. This results in an increase in individual contributions to their prescription costs (Lopert, Docteur, & Morgan, 2018). As Canada's population continues to age and chronic health conditions become more pervasive higher costs will be experienced by the federal, provincial and territorial governments. This will lead to reduced drug coverage as well as other health and social benefits.

Cooperation among the stakeholders is essential to come up with a more consistent drug coverage program. Canada can obtain useful lessons from other countries. Some have mandatory private (regularly not-for-profit) insurance systems that are regulated by the national government like Germany. Others like the UK have systems that cover prescriptions through taxes. Some provide prescription at low costs to patients but at a small fee. Each system has its own merits and demerits and it is essential to evaluate each.

Some of the issues that may arise include the individuals or groups to be covered. The purpose of Medicare was to ensure that access to services is based on need not ability to pay for all Canadians.  One of the main aims of the coverage is to ensure that their equity in access to services.

Expenditure on Drugs in Canada

There are currently different provincial and territorial drug plans providing coverage to millions of Canadians. While a large number of businesses provide private drug coverage as well to millions. Both plans have different rules on the eligibility for coverage by individuals, the amount to be paid by patients for prescription and the drugs covered. For example, in some jurisdictions seniors pay hundreds of dollars in deductibles and co-payments while in others they pay a small flat charge for each medication. Affordability of prescription drugs presents a huge problem for many Canadians. Affordability presents a serious challenge due to annual maximums, co-payments and deductibles. This presents a huge challenge in the health of many Canadians. Possible solutions to the challenge include a universal coverage for medication that would look like that offered for hospital or medical care (Canada & Hoeppner, 2010). This would result in individuals covered under a private plan being immensely under a public plan.

Another approach would be to provide a basic safety net above a certain threshold such as 5% of household income. This is to ensure that no Canadian goes into debt or sells his/her property to pay for medication. The approach would allow for governments to vary the threshold depending on what the budget allows. However, it would be less effective at reducing costs and improving equity.

Another approach would be to leave the current public and private plans as they are and placing more public funding and regulations in place to seal the loopholes in the system. Also, Canadians would obtain either public or private coverage. If standards are not developed, the techniques could lead to the preservation of current inequities and efficiencies.

Another issue is determining what drugs are to be covered. The main idea is to have under similar terms and conditions, a comparable list of prescription drugs. To enhance effective management, many drug plans develop a list of drugs that are qualified for reimbursement along with their criteria for use. Thousands of drugs are in the market and new ones continue to be availed yearly. Many of them are expensive. Drug plans eventually make the utmost use their limited budgets to achieve the best possible outcome. The challenge is greater in public drug programs which are accountable to taxpayers. Private drug plans are more flexible and usually provide a wide range of prescription drugs.

Public plans rely mainly on the Common Drug Review conducted by the Canadian Agency for Drugs and Technologies in Health, to decide which drugs are suitable for reimbursement. Numerous private plans provide reimbursement for most new drugs that arrive in the market regardless of whether they are proven eligible. This is known as an open formulary. This is due to employers who mainly sponsor the private plan as a means to attract and keep employees since they offer more choices. There is a variation across the country in relation to high cost and specialized medicine. This is becoming very frequent.

Issues with Employer-Funded Benefit Plans

Possible solutions include the creation of a national formulary that would have the same effect. It could be applied to both public and private drug plans. Furthermore, Canadians could also have access to drugs not approved for reimbursement through national pharmacare.

Another way is to focus on essential medicines. This is especially those in primary health care. Individual public and private plans could top-up the list of prescription to be availed. This would approach would not cover the full basket of prescription drugs regularly covered in a healthcare system. Moreover, the challenge of newer, high-cost drugs won't be addressed.

Another way would be to concentrate on most frequently prescribed drugs. The allowance could be made to allow for a top-up on the list of drugs on the national formulary. It would however not address the challenge of higher cost prescription drugs.

Also, a comprehensive approach could be applied allowing coverage for a larger list of drugs. This could entail higher costs but ensure higher equity in coverage and ensure a greater purchasing power across a wide range of drugs.

Another issue would be the payments for the plan.

It is essential to come up with a mechanism of cost-sharing among governments, the private sector and individuals. A major issue to be ironed out is if Canadian households will pay a share of the cost of prescriptions through co-payment, deductibles and annual payments. If so, what would be the cost?

Depending on the design of pharmacare, implementation could represent a major change in drug spending from the public to private hands. It would also strengthen the buying power allowing for negotiation of lower drug prices.  

Whether by full cost at the pharmacy, taxes that fund the public plan or premiums for a private plan, many individual Canadians and employers pay high cost for medicine. The contributions may change depending on the model. Co-payments for prescriptions, either a small flat fee or a percentage of the cost, is a means of catering for the cost. Numerous employers back drug coverage for employees and dependents.  They could do so by either a public or private plan.

Impacts on Canada's economy, ability to pay, administrative and compliance costs for taxpayers and governments together with competitiveness should be considered when deciding a means to raise revenue.

In the formulation with a national pharmacare system, it is essential to obtain the views of key stakeholders such as:

Individual Canadians. Patients form a central part of the system. It is important to get their viewpoints as they experience the healthcare system. The difference in ideas and concerns may differ depending mainly on income bracket and gender.

Provinces and territories. They have a large experience in providing public-plan drug coverage to their population. It is essential to obtain a unique point of view from each jurisdiction. Assessment of different models and options is essential to establish the impact of implementation.

Indigenous governments and representative organizations. Despite their area of residence or level of income, over 830, 000 Indigenous clients (First Nations and Inuit) are covered through the Non-Insured Health Benefits (NIHB) Program. Through a partnership with the Canadian government, Indigenous people are continuously leading in the formulation and implementation of their own healthcare system. Aiding in self-determination and improve health results are the key implementation of a national pharmacare program.

Healthcare providers. Prescription and dispensation of drugs are mainly done by Healthcare institutions and clinicians. Clinicians such as pharmacists and nurses have a vast knowledge and experience and thus are essential to the implementation. It should be noted that they may favour approaches that improve access to drugs for patients and may repel alterations that infringe on prescriber autonomy or choice. 

References

Canadian Institute for Health Information, (2017). Information Sheet: Drug Spending at a Glance

Canada, & Hoeppner, C. (2010). Federal poverty reduction plan: Working in partnership towards reducing poverty in Canada : report of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities. Ottawa: Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities.

Conference Board of Canada, (2017). Understanding the Gap: A Pan-Canadian Analysis of Prescription Drug Insurance Coverage.

Lopert, R., Docteur, E., & Morgan, S. (2018). Body Count: The Human Cost of Financial Barriers to Prescription Medications.

Morgan, S., Daw, J., & Law, M. R. (2013). Rethinking Pharmacare in Canada. SSRN Electronic Journal. doi:10.2139/ssrn.2303892

Patented Medicines Prices Review Board, (2017). Alignment Among Public Formularies in Canada Part 1: General Overview.

Patented Medicines Prices Review Board, (2017). Annual Report: 2016.