The Decibel - What to know about Canada’s new Pharmacare bill

Episode Date: March 4, 2024

The Liberal-NDP supply-and-confidence deal has passed another test. The two parties managed to table a pharmacare bill before the March 1 deadline. But the compromise legislation is a limited program, supplying universal, single-payer coverage to only two classes of drugs.Marieke Walsh, the Globe’s Senior Political Reporter, explains how the program will work and how much it will cost.Questions? Comments? Ideas? Email us at [e-mail]

It's taken some time, but the federal Liberals and NDP have finally come to an agreement on a PharmaCare bill. You know, over the last, you know, eight months or thereabouts, you know, they were very vigorous conversations. They were very hard conversations. There were many moments where I think both of us wondered if we would get here today, but we did. And it's a testament. That was Health Minister Mark Holland. He was the lead negotiator for the Liberals. His NDP counterpart was health critic Don Davies. For far too long, millions of Canadians have struggled

to afford the prescription drugs they need to stay healthy and in some cases, even alive. And they have faced among the highest prices for prescription drugs in the world. Today, that changes. The Globe's senior political reporter, Marika Walsh, is here to explain what exactly this new pharma care program delivers and at what price. I'm Mainika Raman-Wilms, and this is The Decibel from The Globe and Mail. On Thursday last week, we actually got to see the legislation. So what exactly does the bill deliver? So in a way, it depends on who you ask. The NDP will say that this is sort of the first step towards a universal single-payer

pharmacare system in Canada. But when you read the fine print in the bill and when you see what the government says about it, what the bill delivers is really sort of things to think about if a future pharma care system were to be implemented in Canada. It talks about the principles, it talks about a single payer system, but in no way does it guarantee its implementation. And in fact, it doesn't set any timeframe for the implementation or funding of a universal pharma care program. What it actually does is funds a program to fund two categories of drugs through the concept of a universal single payer system. Okay. So that is a careful distinction, an important distinction that we

want to make sure we have here. There is no universal single payer pharmacare system that is coming to Canada through this bill. However, there is going to be that type of coverage for two categories of drugs that are very relevant to many people in Canada. And that the NDP are saying is sort of the proof point that single payer universal pharmacare system could work in Canada if there's the political will to do it. OK, and we're going to talk about the medication in just a sec. But I just want to talk really about kind of the broad strokes here, Marika, because the NDP has said that this was a piece of their arrangement with the Liberals that had to happen. They have the supply and confidence agreement. They said that the Liberals need to get going on this pharmacare legislation. And we know they gave the Liberals a deadline of the end of 2023 and then extended it to March 1st. But why has this been such a priority for the NDP?

The concept of a pharmacare program in Canada has been long championed by the New Democrats. And it's been something that Liberal governments and Liberal parties have from time to time promised and then dropped from promises over and over and over again in the last few decades. And that's why it was in the initial deal that the NDP struck with the liberals two years ago as one of the concessions the liberals had to give to prop them up in the minority parliament. But it's also why the NDP grassroots essentially gave Jagmeet Singh his marching orders last fall and said, this is our red line. You need to deliver this pharmacare program that was promised in the deal. Otherwise, you need to pull out. All right. So let's talk about the policy here. And let's

actually get into the medications that are covered here, Marika. What do we know about, well, what is covered? So all of this is still subject to negotiation with the provinces on what is actually implemented. This is something that's in provincial jurisdiction. So the federal government now needs to convince the provinces to get on board with this. What is being described as almost a pilot project now or a proof of concept is the federal government funding the coverage of two categories of drugs. And those are drugs that fall under contraceptives or under diabetes medication. So what is proposed is that for contraceptives, people would no longer have to pay or rely on private benefits plans to cover the cost of contraceptives. And the ones that are covered, it's quite broad. The liberals and NDP are proposing

that the birth control pill, copper and hormonal IUDs, injections, implants, rings, and morning after pills all be covered by the public purse rather than the individual purse. The second is diabetes. And the government wants to help cover the costs of medications for the most common types of diabetes. So that would be type one and type two diabetes. And so of course, the headline there is covering insulin. Another drug that they talk about covering is metformin.

And then they also talk about setting up a fund to help cover the costs of some of the devices that people use who have diabetes. So that includes insulin pens, insulin pumps, and supplies such as insertion sets and insulin cartridges. So that gives you sort of the broad strokes of what we're looking at for this initial idea of coverage of universal single-payer pharmacare. Some people will be very happy because they fall into those categories, but this is not universal. It does not cover everybody who suffers from

chronic disease or who relies on prescription medications. And that's why you can see that while it's not being sold as a pilot program, it is in some ways sort of a test run of a broader system that could come down the road, but is not being promised to come down the road. Yeah. Okay. So it's very targeted, right? So it's covering the cost for contraception and for diabetes. But basically for people who this does apply to, this could be a real big change for them because the government is now going to be covering the cost of those medications. It absolutely could be. And I think that it's something that people who do have private insurance maybe don't

really understand the impact of or take for granted. So about one in five Canadians does not have access to private insurance and has to pay out of pocket. And it is significant. You know, if you have an IUD, you could be paying out of pocket up to $500. If you rely on the pill, you could be paying about $300 to $400 a year. And the data from Statistics Canada, from polling firms shows that people are skipping their medications or alternating days where they take their medications to try and make those medications

stretch longer. It's always interesting to see when readers are responding to you and actually emailing you about a story and when you don't hear from them. And I've heard from several people who live with diabetes who have wanted to just point out the extreme costs that they are forced to deal with because of their chronic illness. And they say things like it changes which province they decide to live in based on which plans exist in the provinces, because different provinces have different level of coverage from the public purse for these individual chronic diseases. And it also determines what jobs they can accept, because they can't necessarily have the flexibility to accept a job that doesn't have private health insurance because

they simply can't afford it. But I think there are still serious questions about implementation, how fast this will happen, how it actually rolls out compared to what is actually being promised. Because even the health minister last week really said like he doesn't even know yet how this will interact with the private health care plans that are already out there. So there is still a lot to figure out. And they have a very short window to do it before the next election in about a year and a half. Okay. Yeah. And I think an important point here is we should start talking about money, because obviously a program like this

is quite expensive. How much will this program cost? The minister gave a very rough estimate of about $1.5 billion. That's billion with a B annually. But he said that it's so early that they really don't actually, they were very hesitant to release the number because it could change. He said it could go left or it could go right. It's going to depend on which provinces actually play ball and take part. It's going to depend if the government ends up paying the same amount or the same share of cost to a province who opts out of the deal. So there is a lot of question marks around the federal costs, but also because there's already some provincial coverage for some groups of people, for example, younger people or people who are

low income who don't have a private health insurance plan or seniors, there is already this patchwork of coverage that is publicly funded through other governments that then needs to be sort of woven together with the federal coverage to figure, who pays for what share and how that all shakes out. Yeah. And has the government said where that money is going to come from? Like, I guess I'm wondering if it's going to be in the upcoming budget that we're expecting in the next few weeks. The minister suggested that it won't be in this budget. Maybe we would see, you know, very small levels of funding. But he really talked about next year's budget in terms of seeing the full costs of the implementation, because they do need time to negotiate with the provinces to get

their ducks in a row to have that rollout. That timeline is really important because for the NDP, they need to be able to show to voters and to Canadians why they are sticking with this deeply unpopular government and helping them stay in power. And the NDP believes they can make that justification, make that argument with Canadians if they can deliver on these kinds of policies for Canadians. So they really need to see for their own political calculations, this program get into place. And of course, the NDP would like to see this program grow. And so we have the numbers for this pilot program, as you say, which is $1.5 billion annually. But do we have a sense,

Marika, for comparison of how much a full universal pharmacare plan would actually cost in Canada? It's a bit tricky. Obviously, the idea that it would be $1.5 billion for just two categories of drugs hints at how big the cost could be. But because there are already other programs that cover some drugs and some populations in different parts of the country differently, what happens is that there's the total estimated cost of universal pharmacare, and then there would be sort of the net cost if you subtract out all of the costs that already are paid for drug programs provincially and federally. So what the parliamentary budget officer said is that a universal national pharmacare system would cost somewhere in the high 30 or 40 billion a year once

it's fully implemented. But because there are already so many drug programs that are publicly funded provincially and federally, the net cost would be about $13 or $14 billion. So a substantial amount of money either way. And it really explains why the liberals are not willing to promise that, because it would really tip the scales on the books. We'll be back after this message. How does the government, I guess, justify this expense when there are other parts of the health care system that, you know, really could use one point five billion dollars each year, right? Like we've been talking about emergency rooms being overcrowded, long wait times for surgeries. I guess, Marika, what's the rationale for spending this money on pharmacare? So there's two rationales. One is politics and one is policy. And that critique

has been something that Jagmeet Singh, the NDP leader, has frequently had to respond to. And essentially his rebuttal, and it's also included in sort of the briefing documents from the federal government, is that not taking medications also has a cost for the healthcare system. So for example, if you have untreated diabetes, you risk amputation, you risk blindness, and you risk going to the hospital very sick and relying on a much more sort of resource intensive care from the healthcare system than you would have if you just had access to your insulin and other diabetes medication. And so the argument they're making resource-intensive care from the healthcare system than you would have if you just had access to your insulin and other diabetes medication.

And so the argument they're making is that by paying for medications, you're actually reducing the pressures in other parts of the healthcare system. You no longer need the surgical unit to do an amputation, plus all of the impacts on that person after that were to happen. Critics will say, you know, it would be better to have sort of a fill-in-the-blank system where you're not trying to figure out changes in coverage for all of the people who already have private health plans, and instead you're focusing your efforts and your resources and therefore less money on the people who don't have the coverage. The politics is that this was mandated through a political deal to keep the liberals in power. It's what the liberals agreed

to, to have certainty to avoid a snap election in a minority parliament. So one of the things that makes a national pharmacare program tricky is, of course, this is a healthcare program. And as you alluded to a little bit earlier, Marika, health care is the domain of the provinces, right? So we have kind of a patchwork of systems really across the country dealing with this. So how is the federal government going to make this pharmacare plan happen? We have very little information about how this will actually work on the ground, how this will interact with the private health care plans that are already out there that already cover these drugs for the people who have that drug coverage. We have seen that the provinces have either sort of stayed muted on it or said

they were interested in playing ball with the government on this or said, alternatively, they want to opt out. So Quebec has already said they want to opt out. And they do already have a broader pharmacare program than some other provinces do. So that might be sort of one reason to give the government coverage to justify doing that. That's what they did with the child care agreements, for example. I think it's really interesting to note, though, that when we started talking about pharmacare sort of like a week ago when the deal was initially struck, and then in the first few days of last week before we had all the details, Alberta said they wanted to opt out. But then by the time that we got the legislation on Thursday, it no longer said it wanted to opt out. It softened

stance and said it's focused on getting its fair share for Alberta. And it's possible that actually speaks to the fact that this could be popular for many people if they actually see it in place. And interestingly, the Edmonton and Calgary Chambers of Commerce came out in favor of Pharmacare and asking Alberta to play ball with the federal government. Once this kind of program is in place, it's hard to argue against it. And I think that's what the NDP are banking on. Yeah. And you've touched on the fact, Marika, that different provinces kind of have their own pieces of Pharmacare programs. I want to ask you specifically about PEI, Prince Edward Island, and what's happening there, because there is already kind of a program with the federal government in that province.

Tell us about that. Yeah. So in 2021, the federal government announced this pilot program with PEI in which the federal government would help to pay some of the pharmacare costs of people who did not have coverage already and to to also reduce co-pay costs in PEI because they're higher than other parts of the country. And Health Minister Mark Holland, in an interview with CTV last week, described the PEI pilot project as a fill-in-the-gaps program. And then he described this rollout of coverage for contraceptives and diabetes medications as a second pilot program, as sort of the alternative version in which it would be a universal single-payer system. And he told CTV News that essentially they would now look to see how it works and which one

actually is better. It's important to note that the government's own panel recommended universal single-payer national pharmacare, but the Liberals have been really reticent to actually implement that. The NDP has not called this a pilot program, right? NDP leader Jagmeet Singh said on Thursday… It's single-payer. It specifically indicates single-payer. It points to the Canada Health Act numerous times and the Canada Health Act principles. So it is absolutely, we've achieved the single payer universal pharmacare that we wanted in terms of framing. So those last few words are doing a lot of heavy lifting in terms of framing, right?

So yes, they've set the frame on what universal single payer pharmacare system would look like in Canada. But the point is, it's not there yet. And it's not being yet. And it's not being promised in this legislation. It really is a focus on contraception and diabetes. Okay, so the government is now going to have to go to the provinces and strike up individual deals with each province, just like they did with with $10 a day childcare. But but the childcare deals took some time, right? Marika, do we have any sense of when this program could be implemented? Mark Holland talked about the 2025-26 budget.

So that would be not this budget, but next budget where we would see the funding rolling out. And so that would be a suggestion of when it would be implemented. They almost have to implement it by then because it's the last budget before an expected federal election. And for there to be any political payoff from this promise of pharmacare, they need to be able to show people that it's in place and that it's doing something for them. So they have about a year and a half before the next election. So Marika, what are the next steps here then? So there's two tracks that will have to be implemented for this to actually happen. The first is that the legislation needs to pass the House of Commons. It's already quite delayed and there's no exact timeline for when it will be passed, although some people have suggested by the end of the spring

sitting. And once that legislation passes, it starts a few processes behind the scenes that would essentially get the civil service to have its ducks in a row if pharmacare were to ever be promised and implemented by future government. So it would create a national formulary and it would also strike a committee of experts to advise the government on next steps and how this program would actually work. And then sort of the rubber hitting the road and where Canadians will see the most impact is in the negotiations that have to happen between the federal government and the provinces. And then there's also the question of how the rollout of this drug coverage impacts private health insurance plans. And you said a formulary there, and that's basically looking at the list of the next set of medications that would be included in this plan.

Yeah, if it were to ever happen, exactly. Just lastly here, Marika, there was a lot of talk last week about how historic this moment was. Today is truly a historic day. That's why our government took historic action on bulk purchasing. The melding of principle and pragmatism resulted in this historic day today. What is the significance of this piece of legislation? There's a few different ways you could look at the significance. From my vantage point as a political reporter, the first one is the bare-knuckle politics of it.

By striking this deal, the liberals who are deeply unpopular and marred in multiple controversies right now can live to see another day in a minority parliament. And they are on track to have a very long minority parliament if this deal stays in place. And so the fact that the NDP and the liberals found a compromise, the NDP, the win is that they actually have funded drug coverage that was not initially promised by the liberals in their deal with NDP two years ago. So that's the win that the NDP will point to. And for the liberals, it's really the fact that they didn't actually implement National Universal PharmaCare.

So the impact of this promise on the federal books is much less down the road than it could have been. And they have the certainty and stability in a minority parliament that most other parties who are governing a minority government don't get to enjoy. And given how low they are in the polls right now, that's what they're banking on, that this will buy them time to improve their political fortunes. And then, of course, the significance of it is that for the people who suffer with chronic diabetes and for people who struggle to pay for their contraceptives, they now have a light at the end of the tunnel that this will change. What happens after the next election and how the conservatives would

deal with it if they did form government, I think raises a lot of questions about what actually will result in this program. You know, will it even really take off before it's canceled or will it become so popular that you can't cancel it politically as whatever the future government is, whatever the color of the next government is. Marika, it's always great to have you. Thank you so much for being here. Thanks so much, Manika. That's it for today. I'm Manika Raman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrian Chung is our senior producer,

and Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.