Universal pharmacare plan could cost the feds billions

Hidden deep among the headlines from the 2018 budget announcement by the federal Liberal government Tuesday was a plan to roll out a universal pharmacare plan.

It’s a bold initiative, but one that begs some serious questions.

The first questions which come to mind are how much is this going to cost and where is a government that is already projecting an $18.1-billion deficit going to come up with the money?

“It’s a really important issue,” Finance Minister Bill Morneau told reporters before the budget was tabled on Tuesday. “It’s, in our estimation, just not acceptable that a significant subset of the population doesn’t have access to pharmaceutical products.”

According to the Liberals, an estimated 10 per cent of Canadians cannot afford their prescription medication. That figure is backed by the Canadian Labour Congress (CLC), a national trade union centre that has long been pushing for a federal pharmacare plan.

“Today, the only place where all Canadians are covered is in the hospital,” the CLC has previously stated. “Canada is the only developed country in the world with a universal health care program that doesn’t include a universal prescription drug plan.”

But the costs of this plan could be astronomical.

“After accounting for the formulary, the expected increase in consumption, increased market share of generics, and the potential savings from price negotiation, PBO (Parliamentary Budget Officer) estimates this Pharmacare program would have cost the federal government $20.4 billion if it had been implemented in 2015-16, or 83 per cent of actual 2015-16 drug expenditure for pharmaceuticals listed on the RAMQ formulary.”

That estimate was in 2016. Imagine what it would cost now.

Ontario’s former health minister, Dr. Eric Hoskins, resigned his position the day before this 2018 budget was delivered in order to take charge of this proposal. But where will it go? And can it work?

Hoskins thinks it can.

“This is really about putting Canadians first and addressing that challenging issue of affordability and access and equity,” Hoskins told reporters on Tuesday.

Hoskins’ advisory council has been tasked consulting with experts, provinces, territories and Indigenous groups to create a report and provide recommendations on how to implement the proposed program.

“This is something that I’m so passionate about,” Hoskins added.

“I’m really gratified to have the opportunity.”

But NDP Leader Jagmeet Singh has his doubts. He thinks the Liberals are playing politics, nothing more. His party had a proposal on the table earlier this year.

“The government voted against that plan,” Singh told reporters on Tuesday afternoon. “So it doesn’t show a true commitment to actually implementing pharmacare.”

Singh blasted the government for not doing more to hasten the implementation of such a “vitally important” program.

“What the government’s proposing is not a plan — this is a fantasy,” he said.

“We don’t see even a single dollar of investment in a plan to implement pharmacare… This government is just announcing a study, and a study that has no funding behind it.”

So is the government’s pharmacare plan just political grandstanding or is this thing for real?

Brett Skinner, Chief Executive Officer of the Canadian Health Policy wrote this in the Financial Post way back on Oct. 5: “A government-run pharmacare monopoly will cost taxpayers dearly without any clear benefit for patients. It will reduce access to the most innovative medicines for the 24 million Canadians who currently have employment-based private drug plans, without improving benefits for the 11 million Canadians who are currently eligible for public drug programs.”

It should be clear that this proposal in the 2018 budget faces a lot of challenges. And when a government is struggling with an $18.1-billion deficit, it makes it just that more important that all its estimates come in on target.

This pharmacare plan has many projections but no clear cut, firmed up figures. And if it’s anything like Trudeau’s “the budget will balance itself” prediction of a few years ago, Canadians are in for a rough ride. A universal prescription drug plan, even with the fancy roll out at Budget 2018 is no sure bet. It may be just the same kind of bet Trudeau made when he announced the budget would balance itself.

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Jeff Wilkinson

About the Author: Jeff Wilkinson

Jeff Wilkinson  is a Senior Politics Reporter at Debate Report covering provincial and national politics, . Before joining  Debate Report, Jeff worked on several provincial campaigns including Jack Layton. Jeff has worked as a freelance journalist in Toronto, having been published by over 20 outlets including CBC, the Center for Media and VICE.com.

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