Canadians are fortunate in that the vast majority of us have access to some form of prescription drug coverage. Unfortunately, that doesn’t mean that every Canadian can afford the medicines they need. That’s where the push for a national pharmacare plan comes in. Lilly believes a new plan should be aimed at these gaps in coverage – without undoing the successes of the system we already have in place.
To determine the best path forward, we must understand the current environment related to access to drug coverage in Canada, and how this may impact individual affordability.
In its simplest form, the drug coverage “gap” includes two elements:
1. Uninsured: Canadians who lack any form of drug coverage; and
2. Underinsured: Canadians who may have drug coverage, but still face financial challenges in accessing the drugs they need.
This “gap” is the central problem that a national pharmacare program must fix.
A recent report by the Conference Board of Canada found that more than 34 million Canadians are estimated to be eligible for some form of prescription drug coverage. That leaves 5.2 percent of the Canadian population uninsured. Interestingly, it noted that nearly 4.1 million Canadians are eligible for public or private coverage but are not enrolled in either type of program. These findings suggest that most of the Canadian population is eligible for either public or private coverage for prescription drugs in each province or territory.
Research published in Canadian Health Policy offered similar good news about the state of coverage in Canada. In this study, Brett Skinner found that out of a total population of almost 36.3 million people, over 13.1 million Canadians were covered under a public drug plan and nearly 23.2 million Canadians were covered under a private drug plan. He concluded that “Canada has achieved universal population coverage under its pluralistic system of private and public prescription drug plans.”
Even when an individual is enrolled in a public or private drug plan, they may be required to pay for drugs that aren’t covered, required premiums, deductibles or co-payments, or annual or lifetime caps. This can lead to significant out-of-pocket costs, depending on how their drug plan is designed.
Research from the Canadian Health Policy Institute found that most of the financial challenges Canadians face related to drug coverage were a result of underinsurance within existing public drug plans. On average, federal and provincial public drug plans covered only 25% of the 479 new drugs approved by Health Canada from 2008-2017. What this means is that, for the estimated 8.5 million Canadians who depend on a public drug program alone, there is a real possibility that a drug they are prescribed may not be covered and they would need to pay out-of-pocket for it. Public drug plan deductibles and co-payments can also be a financial burden. Families who rely on public drug coverage are often exposed to progressive income-adjusted deductibles, co-payments and/or premiums before qualifying for full public drug benefits. Depending on a person’s level of income, this cost-sharing can be problematic.
Like Canada, public drug plans in other OECD countries, and even plans that are considered “universal,” do not cover pharmaceutical expenses entirely. The insured must pay a significant portion of costs, often through required patient deductibles and co-payments, and it generally accounts for a larger share of the total public spending on prescription drugs in those countries than it does in Canada. For example, out-of-pocket expenses represent over 40% of total drug spending in Australia, Norway, Finland and Sweden, all countries with public drug insurance plans that cover their entire populations.
And, while Canadians enrolled in private drug plans generally have access to significantly more drugs, they may still face financial challenges. Some private plans mimic public drug plans and restrict the number of drugs covered; others may have limits on how much of the cost will be reimbursed, or annual or lifetime spending caps.
What does all of this mean?
First, a significant portion of Canadians benefit from some form of drug coverage. This is good news.
However, there are still individual Canadians who struggle with affordability because they lack any drug coverage or have inadequate coverage. Lilly believes that a national pharmacare plan should focus on addressing this coverage gap for Canadians who need help the most.
We’re committed to working with government and stakeholders to find solutions for Canadians that build on the successes of our current system of public and private drug coverage. A number of solutions may be required. One size will not fit all. We’ll look at this in greater detail in an upcoming blog.
To see our full response to the pharmacare consultation, click here.