The case for a national drug plan -

The case for a national drug plan

The country’s current mishmash of health coverage is leaving too many Canadians out in the cold

The case for a national drug plan

Photographs by Simon Hayter

On June 7, Maclean’s hosts “Health Care in Canada: Time to Rebuild Medicare,” a town hall discussion at the National Gallery of Canada, in Ottawa. The public forum is held in conjunction with the Canadian Medical Association and broadcast by CPAC.

Garrett Shakespeare is 22. He lives in North Vancouver where he supports himself as a lifeguard and swimming instructor at the local recreation centre. Many nights you’ll find him working as “DJ G-Ratt,” spinning electronic music and mixes at Vancouver nightclubs. Shakespeare exists in a world of chronic pain caused by an exceptionally rare and fatal blood disease, paroxysmal nocturnal haemoglobinuria (PNH), in which his red blood cells are attacked by the body’s immune system. There are, perhaps, 80 or 90 people in Canada similarly afflicted. Without treatment, about one-third of patients die within five years of diagnosis, and half die within 10 years, says the Canadian Association of PNH Patients. Shakespeare was diagnosed 11 years ago. And he is just one example of the many ways in which Canada’s health care system is neither universal, nor equitable, as far as our drug policy is concerned.

What is the life of a guy like Garrett Shakespeare worth? Should he be allowed to live if it costs $10,000 a year? What if $50,000 is the price of his life? How about $500,000? Is Garrett Shakespeare’s life worth $500,000 a year?

Not in British Columbia it isn’t. The provincial Ministry of Health Services concluded that at $500,000—the annual cost of Soliris, the one drug almost certain to restore his health, if taken for the rest of his life—treatment is “not cost-effective.” He is, in other words, expendable. “It’s pretty hard to hear that,” says Shakespeare, who has the misfortune to need a drug that Forbes magazine describes as the most expensive in the world. (Alexion Pharmaceuticals, creators of Soliris, said the cost is justified by the expense of developing a drug for an extremely small market.)

If Shakespeare lived in Quebec or Ontario, he might receive Soliris on compassionate grounds, as have some PHN sufferers, though the policy is inconsistently applied (in 30 other countries, the drug would be paid for). His plight shows the toll too many Canadians pay for the political failure to draft a national, universal pharmacare policy, or at least a national, catastrophic drug insurance plan for those who must choose between their health and financial ruin. Canadian drug policy is a mishmash of private employee-employer-paid health plans, as well as public drug coverage that varies by province based on differing criteria of age, income, drug type, and degree of compassionate whim.

Paying for cancer drugs is another, more typical concern. Three-quarters of newer cancer drugs cost more than $20,000 per course of treatment if they’re taken at home, where they’re not covered by medicare. Provinces do have differing catastrophic drug plans that pay a portion of those costs (if they’ve approved the drugs), but the deductibles run into many thousands of dollars. A poll by the Canadian Cancer Society last September found 74 per cent of Canadians support a publicly funded catastrophic insurance plan to pay the full cost of cancer drugs. Eight in 10 favour a federal program to eliminate provincial differences in their cost and availability. “The lack of a national approach to drug coverage is resulting in a disturbing shift from universal health care to health care by postal code and pocketbook,” said the society’s Aaron Levo.

The result, for a country that prides itself on a public, universal health care system, is a drug policy that is neither. Growing drug costs account for the second highest share, after hospitals, of scarce health care resources. An estimated $26 billion was spent on prescription drugs in Canada in 2010, says a report last month by the Canadian Institute for Health Information. Nationally, the average annual increase in public and private drug spending was almost nine per cent between 2000 and 2005. While that slowed to an average 4.8 per cent since 2009, it still outstrips inflation.

Yet, just 60 to 70 per cent of Canadians are covered by health insurance. The unemployed, and those whose jobs don’t include private drug plans, shoulder much of the cost themselves. In New Brunswick, for example, just 33 per cent of drugs used are paid for from the public purse, the lowest in the country. And some three to four million Canadians a year do without drugs they were prescribed because of the cost. It is little different than the much derided U.S. system, says Marc-André Gagnon, an assistant professor at Carleton University’s School of Public Policy and the author of a recent study, “The Economic Case for Universal Pharmacare.” Canadians are almost as dependent as Americans on inefficient private drug plans, and the premiums they and employers pay are almost as high. “We get the same results as the United States,” says Gagnon, “a lot of waste, a lot of inefficiency and a lot of people who aren’t covered.” (Meanwhile, most European countries, and Australia and New Zealand, have models that provide universal pharmacare, and more success at containing drug costs.)

A further source of pain is the fact that Canadian drug prices are among the highest in the world. For some 300 popular generic drugs, they were double the cost of similar U.S. generics, and five times that of New Zealand’s, notes a study released in May by the University of British Columbia Centre for Health Services and Policy Research. Ontario has taken a lead since 2006 in shaving the price it pays for generic drugs. By next year it will pay only 25 per cent of the cost of brand-name equivalents. There would be annual savings of $1.3 billion if all provinces similarly squeezed their suppliers. There’s even more room to cut, says Michael Law, one of the report’s authors—enough savings to pay for all cancer drugs used in Canada, or to underwrite a catastrophic drug plan, the authors conclude.

In 2004, the premiers lobbied to include a national pharmacare plan in the health accord that set health funding levels for the next 10 years, but it was traded away in closed-door negotiations with the federal government. The Canadian Medical Association (CMA) and the Canadian Nurses Association are among those urging that a national pharmacare program be included when federal and provincial first ministers negotiate the funding for a new health accord in 2014. As an editorial in the CMA Journal said this spring: “We cannot pretend to have universal public health care or expect the benefits inherent in such a system while it excludes the medications necessary to prevent and treat illnesses.”

Gagnon’s study says universal pharmacare would actually save billions, especially if the federal government dropped its policy of keeping drug prices high to promote pharmaceutical investment and jobs. Stripping away those incentives, coupled with the efficiencies of a universal drug plan, could create a fairer system and save almost $11 billion.

Garrett Shakespeare downs powerful steroids every morning to ease the pain. They’re eroding his bone density and causing other troublesome side effects. He goes for blood tests most weeks, makes regular visits to a blood specialist, and trips to hospital for blood transfusions or saline IVs laced with morphine to dull the pain.

Last month, he buttonholed B.C. Premier Christy Clark, and in a three-minute meeting handed her a letter making his case again for Soliris treatment. “She said she’ll get me an answer soon,” he says. In the meantime, he waits and worries and wonders why a man should have to beg for his life in a wealthy country—a world leader, he was led to believe, in universal health care.

The Ottawa forum will be moderated by Maclean’s Ken MacQueen, with opening remarks by Dr. Jeff Turnbull, CMA President. The panel includes Nadine Henningsen, Executive Director of the Canadian Home Care Association; Irwin Elman, Ontario’s Advocate for Children and Youth; Scott Dudgeon of the Neurological Health Charities of Canada; and John Geddes, Maclean’s Ottawa Bureau Chief.


The case for a national drug plan

  1. A national drug plan? Good luck while Harper’s PM!

    As for the cost of generics being so much higher in Canada: It may partially be because of all their legal costs. Drug companies spend huge amounts of time in the courts. For example, a quick search I just did in a legal database turned up 50 decisions in 2010 involving Apotex. The same search using Novopharm turned up another 24.

    Maybe the federal government should look at ways to reduce the number of lawsuits the drug companies file, and demand that they pass the savings on in lower drug costs. It would not only save the drug companies time and cost, but would reduce the workload in the court system (which in turn should save taxpayers money and help with their deficit reduction plan, as long as no other group steps up to fill the void).

    • Good for you Keith, another hit at Harper…let’s face it, nobody has looked a a national drug plan.  In Alberta, anyone can join Blue Cross for a very reasonable amount of money.  Then each prescription costs no more than $25.   People on welfare and disability already get their medications for free.  Certain stores are also much cheaper – Walmart for one; Superstore for another.  They charge next to no dispensing fees.  Sometimes also, it is much cheaper to buy the medication in a higher dose and cut the pill in half (if it is not enteric coded).  For instance, 30 tabs of the 20 mg pill might cost 40 dollars and 40 mg of the same number of pills might cost 60 dollars.  You buy the 40 mg bills and get twice the number for a substantial savings.  I cannot comment on the lawsuits but I did coment on this particular young man in a lower thread.

      • another hit at Harper

        OK; my comment was snarky, but it’s still the truth. Harper’s stated goal (which I agree with) is to reduce the deficit. Harper is also on record as not being terribly in favour of public health care (there, I disagree). While he has softened that position over the years, it is highly unlikely he would increase the existing coverage and bureaucracy, given the increased government costs that would go with it.

        As for Blue Cross and similar plans, “reasonable” depends on perspective, I guess. There are plenty of working poor who would have a hard time coming up with the premiums – and then there’s the whole “pre-existing condition” thing.

        I have diabetes; still non-insulin-dependent; I also need medication for cholesterol. It would cost me several hundred a month in meds if I didn’t have work-supplied coverage. Unless things have changed in recent years, if I were to lose my group coverage and switch to individual coverage like Blue Cross, I’d be paying higher premiums plus I’d be stuck covering all costs for anything that could be construed as diabetes- or cholesterol-related.

        As the article says, when it comes to drug coverage, we’re no better off than Americans; maybe a bit worse. Blue Cross-type coverage is too costly and inadequate for many.

        Am I in favour of a national drug plan? I don’t know; I’d have to see what was on offer, at what cost to the taxpayer. If the plan brought drug costs under control, and was capable of being fully funded with a marginal tax increase (i.e. revenue-neutral for the government without putting a major dent in my pocket) then I might be on board.

        But given the stated policies of the current government, any discussion of a national drug plan is purely hypothetical for some years yet.

        • I did reply but my comment was lost.  What I wanted to say was that this blue cross plan thru the Alberta Govt does not even ask about pre-existing illnesses.  If you are poor (making less than 21 thousand for a single or 39 thousand for a family with kids) you pay only $41 or $82 per month in premiums plus a max of $25 for each prescription.  Also, Alberta has no healthcare premiums so the fees are in fact reasonable and you can still claim what you pay for prescriptions on your income tax.  People who are severely handicapped and have difficulty working full time can get their meds paid for thru a program called AISH.

          • Interesting; I didn’t realize from your first comment that it was a provincial plan administered by Blue Cross. The price still seems a bit steep for the income ranges you mention (over 2.5% of gross income at $39,000) – but still better than the alternative (no coverage).

            Any idea what the participation rate is for those eligible? Hopefully, reasonably high; if not, the question arises as to whether the low participation rate is due to the cost or a lack of interest. I’d guess the former but I can easily see it being presented as the latter should someone want to end the program.

      •  Do you know if the AB Blue Cross plan covers the drug that Garrett Shakespeare needs?

  2. I will be the first to admit that this is a very sad story, and I feel for the guy. I hope, though, that this kind of thing wakes us up to have a adult conversation on fixing health care in Canada.

    “What is the life of a guy like Garrett Shakespeare worth? Should he
    be allowed to live if it costs $10,000 a year? What if $50,000 is the
    price of his life? How about $500,000? Is Garrett Shakespeare’s life
    worth $500,000 a year?

    Not in British Columbia it isn’t. The provincial Ministry of Health
    Services concluded that at $500,000—the annual cost of Soliris, the one
    drug almost certain to restore his health, if taken for the rest of his
    life—treatment is “not cost-effective.””

    It is horrible to think about, but we will have to sit down, and decide this question. Also, we need to do all we can as a country to get the drug costs down. Lets be blunt, what if it was a mixture of a lot of expensive drugs, and it cost $3,000,000/year? Would we say okay then? It sounds bad, but we need to come to terms with the fact that we have unlimited needs, and limited ability to pay for them.

    This will only get worse in the future, as the population ages, and newer ways become available to keep people alive. Lets get serious and fix the system now, so we can have stability in the future.

    I expect that some people will be upset with my views, and I pray that nothing like this ever happens to the people I love, but I am being a realist. The worst thing about it is, if he were rich, he could buy it himself. Do you think it possible for him to ‘raise’ that every year in donations? What if he had a FB site? If the premier doesn’t allow him to get the drugs, I would like to be part of any fundraising he does.

  3. This article is being a bit dishonest by profiling a sick 22 year old as a case for a national drug plan.  The real face of pharmaceutical consumption is a 70-80 year old senior taking chronic doses of multiple medications to stay alive or maintain a quality of life.  There are going to be more of those people, and less 22-year olds, in our country’s future in the next couple of decades. 
    The system is bankrupt as it is – even if you just kept the current level of health-care coverage in Canada, it will consume the entire budget of most provinces within a couple of decades.  And you want to add pharmaceuticals on top of this too?  We’re a low birth rate country dependent on immigration.  At some point, people, even very poor and desperate people, will decide it’s not worth immigrating to Canada and having the lion’s share of whatever wealth they create confiscated to pay for our old people to live an extra decade.  Already 35% of young male immigrants leave the country after attaining residence. 

    • “The real face of pharmaceutical consumption is a 70-80 year old…”It’s not, really. It’s a 50 year-old on anti-rejection drugs for a kidney transplant, (roughly $30,000/annum) or a type 1 diabetic on insulin and testing his/her blood 5 times a day. ($3500/annum). That 80 year-old you’re referening is mostly taking dirt cheap blood pressure meds, generic lipitor and oral anti-diabetic agents and stool softeners. Many provinces actually break down the most popular drugs and devices by billing amounts and make the data public. By exercising a bit of pressure, Ontario has already cut 500 mill/year from generic drug costs. Imagine the power of onne central buying agency, and how much that would save.

  4. And the most effective argument against your proposal comes from your own profile of this young man. 

    “$500,000—the annual cost of Soliris….. (Alexion Pharmaceuticals, creators of Soliris, said the cost is justified by the expense of developing a drug for an extremely small market.)”

    So on the one hand, you have a drug that’s developed by a pharmaceutical company for an extremely small market, and the only way for them to make this cost-effective is to charge an arm and a leg.  Or, as you propose, they can simply not be allowed to set their own price: 

    “universal pharmacare would actually save billions, especially if the federal government dropped its policy of keeping drug prices high to promote pharmaceutical investment and jobs. ”

    So on the one hand, you have a young man who can’t afford an expensive drug that will keep him alive.  On the other hand, your proposed solution will ensure that such a drug is never developed in the first place.  The only difference is that under the latter option, we’d feel better about ourselves. 

    • You have a lot of hands. :)

      That is true. If we ‘forced’ drug companies to lower their prices, they can just as easily stop producing the drug. Also, will they be as active in researching new ones, knowing that they might end up losing money to sell it?

  5. It is time that we (the people and the government) told pharmaceutical and medical companies what their products are worth and what we are going to pay for them. They (the pharmaceutical companies and purveyors of medical instruments and equipment) seem to think that they can demand whatever exorbitant price they can dream of, since the costs are carried by the state.

    They claim research and development costs, etc. but these costs can be recouped over decades. Once a drug is on the market, it can remain in use for over a hundred years, or longer, depending on its efficacy. Even when a generic is developed, many continue to use the proprietary version. And if one drug does not make a profit, another will. That is how business works. Sometimes some goods are sold at lesser value while others at greater, for an end result of profit.

    • Once a drug is on the market, it can remain in use for over a hundred years, or longer, depending on its efficacy.

      Uh, generally once a drug comes off patent, which happens I believe after 25 years, the profitability of the brand name drug falls of hugely.  Yes, people can still buy the brand name Prosac, but your company’s drug plan will only reimburse you for the lowest price generic equivalent.  So you buy the generic.

      • The patents in Canada last for only 20 years.  In fact one drug, Olanzepine was introduced in 1991 and removed by judge’s court order in 2009, after 18 years.  Drug plans refuse to pay for the brand name if a generic drug is available.  The pharma companies often create their own generic drugs so they will keep a piece of the pie of the medication they developed.  They will also create variations of the original a long-acting original which will then be patented for another lengthy period of time.  One positive about the pharma’s with the brand-name meds is that they often have “compassionate programs” for people who have no medication coverage and can’t afford the medication.  They will provide the meds for several months until the person can alter there circumstance.  Is it possible this young man could get a compassionate supply of the medication and then relocate to one of the provinces that provides the medication under its healthcare plan? 

  6. If we give this man his drugs at $500k/yr, that works out to what? 2-4 high-level surgeons?  How many people would they save in any given year?  More tellingly, how many people will die for the lack of availability of those surgeons year in and year out.

    We can’t afford to simply pay the private prices. Of course, that brings up the screaming about how drug companies won’t bother developing drugs if they can’t set the prices. This is hogwash.  Most of the development of modern pharmaceuticals is done by organizations such as the NIH and publicly funded universities. Pharmaceutical companies typically come in and just grab the low-hanging fruit. And once developed, the cost of production is minimal, and legal screwing around can extend patents for generations (literally.. double the dose, halve the frequency, and add a new “filler” agent, and that’s excuse for a 20yr extension on a patent)

    They won’t stop developing new drugs because that’s what they do. That’s where they make their money in handling the patents of these new drugs, and they don’t know if a drug is going to be profitable or not until they see what it actually does.  Remember, aspirin is now repackaged as a heart medication — not because that’s what they intended to do with it, but because that’s what publicly funded universities noticed was going on with it, and Bayer took that research and their patent and ran with it. 

    Also, remember that more than half of a pharmaceutical companies operating costs are on *marketing* these days, not drug development.

    • Thwim, here is a link to the HIV drug “pipeline”, which shows new drugs in development for the treatment of HIV.

      You can clearly see that the development of each drug is sponsored by a private company.  You can also see the status of each drug: which trial it’s on.

      Believe it or not, this “pipeline” of drugs may be whittled down to as little as one or two drugs approved for human use.  The drug company doesn’t just pay for the drugs that work, Thwim.  They also pay for the 20 other drugs that looked promising in computer simulations but then killed mice, or looked promising in genetically modified mice but killed the lab dogs, or went to human trials but caused unexplained liver failures.

    • I hate to break it to you Thwim but publicly funded universities do studies to test the efficacy and safety of the drugs with funding provided by the drug companies; they are not developing the drugs.  They do, however work on the development of vaccines, again with funding provided with by drug companies.  I  worked on a vaccine study ordered by the federal govt. run out of the offices of the provincial health region, funded by the drug company.  Yes, the Province gave the drug company a deal on the rent and our salaries but the drug company picked up the tab.  Public universities don’t have the money to pay for all this expensive drug development or the years of studies that need to be done.

  7. Keith, The Blue Cross plan I was referring to doesn’t even ask about pre-existing conditions.  However,  they will not pay for certain expensive new meds but then the hospital sometimes does not have those meds in their formulary either.  This Blue Cross plan  is through the Alberta Govt. Health & Wellness Dept.  It has 4000 meds in its formulary, most are generic.  It is offered  to all Albertans who have no medication coverage at the following premiums:
    for singles: $63.50/month; families: $118.00/month.

    If people are poor (singles who make less than $20,970/yr; families without children who make less than $33,240; and families with children less than $39,250;)  the price is $44.45 per month for a single and $82.60 for a family.

    The person/family then pays 30 percent for their prescription with a max of $25.00 per prescription.  As I said earlier, anyone judged to have a severe disability by their physician already gets their meds for free. Also, remember in Alberta, we pay no healthcare premiums.
    Let’s not forgot that even if you work and get your meds that way, you pay for the benefits with deductions from your paycheque, not to mention union dues, etc. etc.

  8. It would be much cheaper to treat him with what Dr. Shute spoke to almost sixty years ago. Vitamin E. Lack of vitamin E causes hemolysis and PNH is hallmarked by hemolysis.

    “1. The action of alpha-tocopherol phosphate (aTPO4), an anticoagulant,on PNH hemolysis was studied by both in vitro and in vivo means. It wasfound that the addition of aTPO4 to the modified Ham test inhibited lysis ofPXH erythroeytes. During the intramuscular administration of aTPO4, thesusceptibility of the erythrocytes to lysis by fresh acidified serum progressivelydecreased. These cells, after incubation w’ith the serum, gave a positive Coombstest.””Fatigue in PNH is related directly to chronic hemolysis”