The feds promised meaningful health care changes, but they keep bowing to industry pressure
Changes to price ceiling for patented medicines were supposed to be in place this month. That hasn't happened
The federal government — champions of affordable health care, who promised to usher in a new era of prescription drug coverage — has walked back on two important policy initiatives that would have helped Canadians afford essential medicines.
You probably haven't heard about the walk-backs because they didn't come with the fanfare that, for example, the government's launch of a pharmacare exploratory committee did. But the backpedalling indicates that the feds might not wrestle the steering wheel away from commercial interests after all.
Here's the background: the government caps the prices of patented medicines to prevent companies from gouging when there is no competition. The ceiling prices are set by the Patented Medicines Prices Review Board based partly on prices in the United States and Switzerland — countries that pay more than other high-income or developed countries such as Australia, Sweden and the United Kingdom.
Reducing price ceilings
According to a June 2016 discussion paper, the comparator countries used by the Patented Medicines Prices Review Board were slated to be changed in way that would have reduced price ceilings by about 20 per cent, thus making patented medicines more affordable for Canadians. The planned changes were overdue since the original processes were "designed to respond to realities of the mid-1980s."
In 2017, then-Health Minister Jane Philpott boasted about how the changes could save billions and she re-directed questions about pharmaceutical policy to the planned changes to the price ceilings. The official position of the government at the time was: first we get prices in order, then pharmacare would be addressed.
But after more than 18 months of consultations, the government has now halted the changes that were supposed to be in place this month. The executive director of the Patented Medicines Prices Review Board told me that they are no longer working towards that deadline and it's unclear what changes, if any, will actually be made.
The reason for the climb-down has not been stated beyond "conflicting views," but it seems obvious: the pharmaceutical industry was advocating against the changes because they stood to lose billions. Indeed, that was the whole point — to pay less for drugs. It looks like big pharma won and everyone else lost.
And it's not just the pharmaceutical industry that is winning. For-profit health insurance plans receive a public subsidy worth $2.8 billion every year. Non-taxation of these for-profit plans means that all taxpayers support a benefit that is realized only by those who have private insurance. Taxi drivers, factory workers, artists, and temporary workers often do not have private plans, but they pay taxes that support the private plans of lawyers, health professionals (like me), public servants and executives. This is unjust and it has been happening for decades with little objection.
In the 2016 budget, the federal government announced a review of the tax system to make it more fair. But, like the planned changes to price ceilings, the issue was dropped by the government, even after the Parliamentary Budget Office confirmed in May that scrapping the subsidy would save billions.
A Ministry of Finance spokesperson told me that "taxing employer contributions to health and dental plans is not part of the government's plan." When questioned by the opposition, the prime minister explained that the government was protecting the middle class. But what about the millions of Canadians without insurance who pay taxes that subsidize private insurance plans?
These are bad signs as the government considers how medicines will be publicly funded. The biggest barrier to pharmacare is that it will, if properly executed, save billions every year. But where people see savings, corporations see lost revenue.
A pattern is emerging: the government studies an issue for more than a year, finds a solution that will improve access to medicines and lower costs, then cancels any real change when industry objects. This approach gives the appearance of governing until people start to notice what is happening, and what is not happening.
So we still overpay for medicines and people cannot afford to take them. That will continue as long as the federal government surrenders to industry pressure. These two changes would have helped Canadians afford the drugs they need. Instead, we're still waiting for government action.