THE STANDING SENATE COMMITTEE ON SOCIAL AFFAIRS, SCIENCE AND TECHNOLOGY
EVIDENCE
OTTAWA, Thursday, September 19, 2024
The Standing Senate Committee on Social Affairs, Science and Technology met with videoconference this day at 11:30 a.m. [ET] to study Bill C-64, An Act respecting pharmacare.
Senator Ratna Omidvar (Chair) in the chair.
[English]
The Chair: My name is Ratna Omidvar. I am a senator from Ontario and the Chair of the Standing Senate Committee on Social Affairs, Science and Technology.
Today, we are continuing our study of Bill C-64, An Act respecting pharmacare.
Before we begin, I would like to go around the table and have senators introduce themselves, starting with the deputy chair of the committee, Senator Cordy.
Senator Cordy: Welcome. I’m Jane Cordy, and I’m a senator from Nova Scotia.
Senator Moodie: Rosemary Moodie, Ontario.
Senator Senior: Good morning. Paulette Senior, Ontario.
Senator Burey: Sharon Burey, Ontario.
Senator Osler: Gigi Osler, Manitoba.
[Translation]
Senator Cormier: René Cormier from New Brunswick.
[English]
Senator Bernard: Wanda Thomas Bernard, Nova Scotia.
[Translation]
Senator Brazeau: Hello. Patrick Brazeau from Quebec.
Senator Seidman: Hello. Judith Seidman from Quebec.
[English]
Senator Dasko: Donna Dasko, senator from Ontario.
[Translation]
Senator Mégie: Marie-Françoise Mégie from Quebec.
Senator Boudreau: Hello. Victor Boudreau, a new senator from New Brunswick.
[English]
The Chair: You won’t remain new for long. It will change.
For our first panel, we welcome the following witness in person: Marc-André Gagnon, Associate Professor, School of Public Policy and Administration, Carleton University. By video conference, we welcome the following witnesses: Steven G. Morgan, Professor, School of Population and Public Health, University of British Columbia, as well as Matthew Herder, Professor of Law and Medicine; Director, Dalhousie Health Justice Institute, Dalhousie University. Thank you for joining us today.
We will begin with opening remarks from Professor Gagnon, followed by Professor Morgan and then Professor Herder.
You will have five minutes each for your opening statements, followed by questions. Professor Gagnon, the floor is yours.
[Translation]
Marc-André Gagnon, Associate Professor, School of Public Policy and Administration, Carleton University, as an individual: Hello, everyone. My name is Marc-André Gagnon and I am a professor of public policy at Carleton University. I would like to say hello to the students from my social policy class whose homework is to watch the Senate proceedings right now.
Over the past 15 years or more, I have written more than 150 articles, chapters or reports about pharmaceutical policy in Canada.
In order to better explain the discussions on pharmacare reform, I have provided the committee with a detailed policy statement outlining the structures and weaknesses of pharmacare in Canada right now, the issues involved in the various types of reforms proposed, as well as an analysis of Bill C-64, which I consider problematic.
I am sick of hearing people or think tanks with obvious conflicts of interest quoting each other and repeating each other’s disinformation about the issues involved in pharmacare. The policy statement provides an objective review of the academic literature on the issues. I have no conflict of interest other than sometimes, as a patient, I am disheartened to see the inefficiency of our system, which too often rewards waste.
The data is clear. A universal, public pharmacare program, as recommended in the Hoskins report, would not only give all Canadians better access to prescription drugs, but would also significantly reduce costs and promote the more appropriate use of those drugs. None of that can happen with a patchwork of public and private systems. We need a universal, public system, as recommended in the Hoskins report, and the Trudeau government has promised to follow those recommendations.
When Bill C-64 was introduced in February, I finally saw the first few steps toward implementing the Hoskins report recommendations. Finally, we would be laying the groundwork for a more rational system, even if it was a very modest start for contraceptives and diabetes products only.
I was disappointed though. The budget in March did not include sufficient funding for public coverage of the products mentioned, and the Parliamentary Budget Officer’s analysis indicated that the system would cost just a fraction of the cost of those products because it assumed that private insurance plans would continue to cover the cost of those prescription drugs, which is highly unlikely. Let us be clear: If public coverage is offered, the private plans will transfer the costs to the public plan and will simply stop covering drugs that are already covered by the public plan, unless the private plans are forced to continue covering them.
In short, Bill C-64 no longer appeared to provide the framework for a universal public plan, but rather relied on the preservation if not the requirement to maintain the private plans. In a CPAC interview, Minister Holland even confirmed that Bill C-64 allowed for a province to take an approach to fill the gap rather than offering universal public coverage.
Bill C-64 is still unclear, causing a lot of confusion. It is based on the idea of national universal pharmacare and on the recommendations of the Hoskins report, but it opens the door to doing the opposite by delivering a public-private hybrid systems like the one in Quebec, where everyone is covered, primarily by private plans that are mandatory.
What really concerns me is the possibility that Bill C-64 is dishonest: Will it be used to establish the opposite system to what it claims to establish? It isn’t clear. Unless this confusion can be cleared up in some other way, I propose two amendments to the bill, not to try to improve it, but rather to close a gap that would leave the door open to dishonesty.
Here is my first amendment. “Pharmacare” must be defined not as a prescription drug insurance plan, but rather as a public prescription drug insurance plan.
Here is my second amendment: There has to be a definition of the term “universal” that refers to the universality of social policy, meaning that 100% of Canadians are entitled to the services provided by the plan, on the same terms.
With the current form of Bill C-64, universal pharmacare could mean that everyone will be covered by a range of public or private plans, or even that private coverage could become mandatory where available. With the suggested amendments, universal pharmacare will mean a public pharmacare insurance plan available to everyone in Canada, as the Hoskins report provides. Then we can finally lay the groundwork for an effective and suitable plan, one that will provide good value for money.
I will be pleased to answer your questions.
[English]
The Chair: Thank you, Professor Gagnon. Colleagues, the brief is currently in translation and will be sent to you as soon as it is ready.
Professor Morgan, the floor is yours.
Steven G. Morgan, Professor, School of Population and Public Health, University of British Columbia, as an individual: Thank you, senators, for allowing me to present today.
As senators, you know this is not the time to be studying options for national pharmacare. This is the time for ensuring that legislation about the implementation of national pharmacare is clear, consistent with the program’s objectives and without substantial flaws — especially given that this is potentially landmark legislation.
I would argue that Bill C-64 is none of those things. It is notable that the preamble of Bill C-64 reiterates the current government’s repeated promise to implement the recommendations of the Hoskins advisory council and the many previous commissions and reports that have also recommended a national pharmacare program which is universal, evidence-based and, importantly, publicly administered, just like medicare. However, as written, the bill will not deliver on that promise.
You have all read Bill C-64 carefully, so you know it is surprisingly terse for a bill that is as important as this one is. For scale, Canadians already spend more than $3 billion a year on diabetes treatments alone. A fulsome national pharmacare program could cost more than $30 billion a year. That is not to say that Canada should not implement such a program because, if well designed, a national pharmacare program would save Canadians more money than it costs governments to run while fulfilling our obligations as a nation to ensure that all Canadians have equitable access to appropriately prescribed essential medications without undue financial burdens on their households or workplaces.
You heard the minister testify yesterday that every word — indeed, as he said, every syllable — of Bill C-64 was contested and debated. That is, Bill C-64 was written under duress as the Liberals and the NDP attempted to salvage their supply and confidence agreement. The result is a bill that is dangerously ambiguous. You know, for example, Bill C-64 refers to “universal, single-payer, first-dollar coverage,” but it does not even attempt to define those terms.
You also know that Bill C-64 does not state that a national pharmacare program should be a public program. Indeed, just yesterday, we even heard the federal health minister refuse to commit to public administration, saying that he is “ambivalent” about whether national pharmacare should be publicly administered. He then went on to say that this is his opinion and that “. . . it’s not a settled matter.”
Ponder that for a moment as you reflect on the fact that Bill C-64 concerns what many believe will be the biggest health reform since the establishment of Canadian medicare in the 1950s and 1960s. As written, Bill C-64 leaves critically important decisions about program design to the discretion of the federal health minister. It allows the minster to exercise that discretion — however she or he wishes — in bilateral negotiations with provinces and territories, and it would permit different program structures across the country.
That kind of flexibility not only politicizes what should be evidence-based decisions about health care delivery for all Canadians, but it is also very dangerous in the context of pharmaceutical policy.
Canada needs a clear and coherent national framework for managing this extraordinarily important but complex component of Canadian health care — one that involves some of the world’s most powerful corporate stakeholders and very serious, truly global challenges regarding the reasonableness and transparency of pricing.
Bill C-64, therefore, needs amendments. It should be clear that the program to be created by Bill C-64 right from the outset, with the coverage of select contraceptives and diabetes treatments, will be a truly universal public program. It should be clear that the program to be created by Bill C-64 will not vary across this country at the whim of the federal health minister or at the behest of any particular province.
A universal and public pharmacare program with clear, meaningful national standards will prove Canadians are stronger together. That is what Canadian medicare does. That is what Canadians deserve from a national pharmacare program. As this bill is currently written, that is not what Bill C-64 will deliver. Thank you.
The Chair: Colleagues, Professor Herder’s opening comments are being distributed to you.
Professor Herder, your five minutes, please.
Matthew Herder, Professor of Law and Medicine; Director, Dalhousie Health Justice Institute, Dalhousie University, as an individual: Thank you for the opportunity to appear before you today. I am a professor of law and medicine at Dalhousie University. All of my research concerns pharmaceutical law and policy and is geared toward one goal: improving access to essential medicines.
For that reason, I support the introduction of universal, single-payer, publicly funded and publicly administered pharmacare in Canada. I cannot imagine two more important classes of medicines than diabetes treatments and contraceptives around which to start building a system of national pharmacare.
As written, however, I cannot support Bill C-64. The proposed legislation is flawed in two fundamental ways. First, it does not include clear, consistent criteria or standards for implementing pharmacare. The closest the legislation comes is in clause 6 of Bill C-64 where the federal Minister of Health is empowered to:
. . . make payments to the province or territory . . . to provide universal, single-payer, first-dollar coverage — for specific prescription drugs and related products intended for contraception or the treatment of diabetes.
But those criteria are not defined within the four corners of the legislation; moreover, such coverage hangs on the minister having already entered into a separate agreement with the province or territory in question.
Bill C-64, as my colleague Dr. Morgan notes, sets up a series of bilateral agreements to be negotiated in the future between the Government of Canada and the provinces and territories, which is likely to lead to variations in — and not universal access to — essential medicines across the country.
That kind of uneven, fragmented system is not the kind of system envisioned by the government’s own advisory council led by Dr. Eric Hoskins, nor is it a system that is capable of reducing expenditures on prescription drugs, which are the fastest growing and second-highest line item of provincial spending on health care in Canada.
Bill C-64’s second fundamental flaw lies in its failure to articulate, within the four corners of the bill, the powers, functions and governance structure of Canada’s Drug Agency, or CDA.
As drafted, the bill simply refers to the CDA as a body from which the federal Minister of Health may seek advice about, for example, the cost-effectiveness of drugs, and the minister is directed to request that the CDA help develop a national formulary and national bulk purchasing strategy. It does not give the CDA any real legal authority about which medicines to include in the formulary or to implement a national bulk purchasing strategy.
In short, under Bill C-64, all of the authority to create and implement pharmacare remains in the hands of the political actors, in particular the federal Minister of Health. Yet we know that decisions on which medicines should be a part of pharmacare must be informed by a careful and rigorous appraisal of the safety, effectiveness and relative value of prescription drugs to public health or unmet medical needs, including rare diseases. It is the CDA, not political actors, that is most equipped with the necessary expertise.
The absence of any details in Bill C-64 about the CDA’s authorities and responsibilities — about how it is to be governed so as to ensure that it is both protected from undue influence by political and other powerful outside actors, yet transparent and accountable to Canadians who will depend on its decision making — is a troubling omission from the legislation.
In view of these two fundamental flaws in Bill C-64, I have drafted several amendments to the proposed legislation, which I have appended to my opening statement for your consideration.
At this stage in the legislative process, I suspect there is little appetite for entertaining such a sweeping set of amendments. My intention in sharing them, though, is to show what a serious piece of pharmacare legislation needs to encompass in order to stand a chance of providing equitable and affordable access to essential medicines in Canada.
Further, in my view, it is open to this committee to conclude that Bill C-64 was passed by the House of Commons in error by virtue of the fact that its provisions do not actually support a system of pharmacare characterized, at bottom, by universal access to essential medicines. It’s not too late. The committee can remedy this by integrating clear criteria directly into the bill about what pharmacare must look like in Canada and by removing language in Bill C-64 that puts pharmacare off to future negotiations.
I have highlighted these essential amendments to Bill C-64 in the appendix accompanying my statement. I urge the members of this committee to give them strong consideration. Thank you.
The Chair: Thank you very much, Professor Herder.
We will go to questions, colleagues. I suggest four minutes for the question and the answer. We will start with Senator Cordy, the deputy chair of the committee.
Senator Cordy: Thank you very much. This has been very interesting and helpful to all of us on the committee. My first question is to Professor Morgan.
You spoke about the necessity for the program to be clear and universal and that it not vary across the country. These were bilateral agreements between the federal government with each of the provinces, and health care is always challenging to administer from the federal government. The provinces and territories like to get the cheque, but don’t want to be told how to spend it. Many years ago, significant amounts of money went to the provinces for purchasing medical equipment, and one hospital purchased a ride-on lawn mower, which was used for the hospital, but it certainly didn’t fit my definition of medical equipment. That’s what happens when you have this kind of relationship between the provinces and the federal government.
How do we make sure that despite agreements between the 10 provinces, three territories and the federal government, there are not differences with how the programs are run in the provinces and territories? You made a very noble comment.
Mr. Morgan: It’s an excellent question, and I remember the days of the health accords of the early 2000s when they were delivering funding to the provinces that was spent on things that weren’t necessarily health care.
As it relates to national pharmacare, we already have a clear blueprint for implementation, which is the Advisory Council on the Implementation of National Pharmacare’s recommendations. They clearly specify that we should create a national formulary of medicines that would be co-funded by the federal government with any province that wishes to have financial assistance in providing universal public coverage of funding for those medicines.
The co-funding question is open to debate and discussion. To start the program with contraceptive drugs and the select diabetes treatments, perhaps the federal government would like to put all the money on the table, like it did with the COVID-19 vaccines and treatments like PAXLOVID. Having a dedicated national formulary of medicines that provinces can opt into as the minimum standard of coverage for their province — but with federal funding — is a way to make sure coverage actually exists and is constant across Canada.
Senator Cordy: Thank you very much. That sounds very simple.
Dr. Herder, you mentioned in an op-ed in Policy Options that the minister must ensure that the committee of experts must be free of any conflict of interest. I raised this with the minister yesterday who assured me that all would be well with the committee, but I share your concern that if the committee is not working then the whole program is not going to work well. How do you envision the committee of experts working?
Mr. Herder: That’s a great question. I think a couple of things have to happen. I was pleased to hear the minister’s comments that this was the goal: to prevent conflicts from complicating that process. In addition to existing protections like the federal Conflict of Interest Act, it should be written into the legislation that the committee should be constituted by folks who have relevant expertise, and that includes people who have lived experience as well, not just experts, because that is expertise too — their own living experience with a condition or disease. But they should be conflict-free. They must not have close relationships with parts of the pharmaceutical industry or insurance industry that stand to benefit from giving a particular form of feedback or advice to that committee. I think it is critical to build that into the bill to ensure there is an appropriate balance of expertise, both academic in relevant scientific disciplines and living experience as well.
Senator Seidman: Thanks for all your presentations today. My question is for Professor Morgan and Professor Herder. I understand that you are Canada’s leading experts on pharmacare systems and have been engaged in this work for decades, including providing advice to Health Canada as part of the Advisory Council on the Implementation of National Pharmacare. Given your recent article in the Canadian Medical Association Journal, or CMAJ, entitled “Pharmacare Act does not prescribe universal, public pharmacare,” and given your comments today, I hope you might respond to Minister Holland’s comments to this committee yesterday that the meaning of terms like “universal” and “single-payer” are open to interpretation. I would like to know how you would define the terms “universal” and “single-payer” as they relate to pharmacare. Do you believe these terms can accurately describe a mixed system?
The second part of my question is that Minister Holland told the committee yesterday that the bill represented a stage-gate, incremental approach to achieving universal, single-payer pharmacare, suggesting that passing this bill without amendment was the only way to achieve that objective.
Your recent presentation to us and your commentary in the CMAJ seems to suggest that the bill poses a risk to the establishment of a true universal, single-payer system by cementing a mixed model, patchwork system into law. Are you concerned that this bill could impede this objective in the long term? Thanks. Perhaps I’ll start with you, Professor Herder.
Mr. Herder: Thank you for the question. I’m very concerned. I think the core point that Dr. Morgan and I were trying to make in that article and in our testimony today is that the bill is fundamentally ambiguous. While I certainly support the goal of improving access to diabetes medications and contraceptives as soon as possible, my worry is that we’re setting this up to fail. Even if it starts to get off the ground, any failure to bring down drug prices would affect the program adversely because, unlike contraceptives, the cost of diabetes medications has been rising significantly, and many other essential medicines that we might add to a national formulary are as well. I worry that this would be used to point out why we can never try to do this again. I think the simple task before us is to build a starting point into the legislation so that things are not ambiguous.
The Hoskins report gave us clear advice about how to integrate and define terms like “universality” in the context of pharmacare. I’ve added those to the amendments that I proposed and prioritized in the appendix accompanying my remarks. I would like to direct you to section 6 in particular, for example, for how you could define each of those terms in the sections that follow.
I’ll defer to Dr. Morgan to provide more remarks.
Senator Seidman: Thank you. Dr. Morgan, please go ahead.
Mr. Morgan: I’ll respect the time of the committee and echo that I agree with Dr. Herder. This bill is dangerously ambiguous and could create a legal precedent that would be very difficult for Canada to undo. I would turn to the example in Quebec. Quebec’s original plan in the 1990s was a universal public pharmacare program with a reasonably comprehensive formulary for the province. The Government of Quebec was encouraged to build a patchwork private-public system as an interim measure, but that interim measure is soon going to be 30 years old. That’s the concern I have for Canada as it relates to a patchwork plan now.
Senator Osler: Thank you to all the witnesses for being here today. My question is for all three of you. You heard the Minister of Health yesterday who urged the Senate to pass Bill C-64 without delay or amendments, yet each of you have spoken about the fundamental flaws in Bill C-64 and about needed amendments.
Professor Herder, you submitted a suite of proposed amendments. Professor Gagnon, you proposed two.
My question to all three of you — starting with Professor Gagnon, then Professor Morgan and Professor Herder — is this: Are there amendments on which all three of you agree?
Mr. Gagnon: I’m proposing a minimal version if we cannot get rid of this confusion in the bill in a different way. If that’s not the case, then I propose two minimal amendments which would redefine “pharmacare” as a public drug program and redefine “universal” as covering the whole population in the same way. I think everybody would agree on this.
Mr. Morgan: I think we all agree that the legislation needs a better revamp over time, and maybe that’s what this expert committee will do. But the simple clarity right now about the program as it relates to contraception and diabetes medication should be universal, public and first-dollar, and having that language in this bill would help a lot.
Mr. Herder: I think there is consensus amongst us three about that point. I’ve gone further and tried to rewrite several other clauses of the bill, but I think it is absolutely crucial to make sure that the program is publicly administered — defining that or building that into the definition of “pharmacare,” as Dr. Gagnon has proposed — and to import real definitions into “universality,” making sure that means everyone in a given province or territory.
Senator Osler: Thank you.
Chair, I’ll cede the rest of my time to the committee.
The Chair: Mr. Gagnon, may I quickly ask you this: Did you appear at the House of Commons Standing Committee on Health?
Mr. Gagnon: Yes, I did, and also from 2016-18 when they were also discussing pharmacare.
[Translation]
Senator Cormier: My question is for the three witnesses and pertains to the concept of flexibility that the minister referred to yesterday. Having a quick look at the pharmacare program in my province of New Brunswick, for instance, it is clear that there are huge differences in the way pharmacare programs are delivered from province to province.
Considering that the federal government wants to put forward a universal system, how much flexibility is needed? What degree of flexibility seems reasonable to you in establishing the program, in light of the many disparities among the provinces and territories?
Mr. Gagnon: We are really at the first stages with contraceptives and diabetes products. There will be an official list of the prescription drugs covered in that way. Then coverage would be extended to a list of essential drugs. In terms of the list of essential drugs, it would be the same drugs in all provinces, which would be a minimum condition for everyone.
The idea is that if we take the following steps — what the Hoskins report proposes to do within five years — we will get to a more comprehensive list and then assess whether there are different needs among the various populations in the provinces. That could be for genetic or other reasons. At that point, the costs and therapeutic benefits could vary greatly from province to province. For those specific drugs then, the list of drugs covered, there would be differences that might be interesting and significant.
Senator Cormier: Do any of the other witnesses wish to say something? Mr. Morgan?
[English]
Mr. Morgan: Thank you. The idea of national pharmacare, as has been recommended by several commissions of inquiry over the last 30 years, is that the national system would establish the floor for minimum public coverage across the country. Provinces would have the flexibility to go beyond that, and, of course, private insurance companies have the flexibility to offer extended health benefits beyond the minimum national pharmacare program.
There can be embedded in flexibility the idea that the federal government would start with really critical drug classes, like contraception and diabetes medication, and select medicines from those classes. That is a perfectly good place to start and then build toward essential medicines.
Over time, the provinces, territories and Canadian citizens would agree that a truly coherent, robust national framework for procuring medicines, getting better prices and getting assurances of quality and security of supply will prove the value proposition, and we will eventually have a truly comprehensive national program.
Senator Cormier: Thank you. Although I would like Mr. Herder to answer the question, I will ask a question of Mr. Morgan on behalf of the sponsor of the bill, Senator Kim Pate. It relates to the cost savings we can expect from building a universal, single-payer, public system. Some have suggested we already have bulk purchasing similar to a single-payer system in place through the pan-Canadian Pharmaceutical Alliance, or pCPA.
You have studied these issues, including as a member of the Hoskins advisory council. Can you clarify how bulk purchasing in a single-payer system would differ? Can we expect additional cost savings?
Mr. Morgan: Yes. The negotiating power of a single purchaser on behalf of 40 million Canadians is far greater than the negotiating power of the pan-Canadian Pharmaceutical Alliance, which essentially only serves public drug plans that are minority payers in their marketplaces.
I’ll give a couple of examples. We know, for instance, the prices of generic drugs in Canada have come down as a consequence of essentially non-competitive agreements between the pCPA and generic drug manufacturers. Just last weekend, I analyzed the prices of the top 32 generic drugs sold in Canada and in New Zealand at the same time. I found those drug prices in Canada were, on average, nearly six times higher than the prices in New Zealand.
I can give you an idea of the potential savings there. Canadian public drug plans spend $925 million a year on those 32 top‑selling generic drugs. If we paid the same prices that New Zealand secures through its national, single-payer, public pharmacare program, we would save $770 million a year just on those 32 medicines.
There’s a lot of power in being a single payer. I say that to you from Norway, where I’m hosting an international conference of the managers of national pharmacare programs from about a dozen high-income countries around the world. I presented today to that group, and every one of them wished me well in the hope that Canada might actually get a truly universal public program to serve our country.
Senator Cormier: I don’t have any more time. Sorry about that, Mr. Herder.
[Translation]
Senator Brazeau: I want to thank the three witnesses for being here this morning. My question is for Mr. Gagnon.
In your introductory remarks, you noted your concern relating to conflicts of interest. Can you elaborate on that concern? What could we do as a committee to minimize those conflicts?
Mr. Gagnon: When I started working on the issue of pharmacare in Canada about fifteen years ago, I co-authored a report entitled The Economic Case for Universal Pharmacare. It showed that such a plan would not only improve access, but could also yield up to $10 billion in savings, depending on the type of pharmacare plan implemented. My thinking was that, with an evidence-based policy, we would be able to develop a program, save money, achieve better access for everyone, and that it would be readily approved by Parliament. I quickly learned that for every dollar saved, someone else loses a dollar of revenue, and they will do whatever they can not to lose those billions of dollars.
There are a lot of groups involved in pharmacare issues that are directly funded by the pharmaceutical industry, the insurance industry and pharmacy chains. You have to remember that, with the current distribution system, pharmacy chains are lining their pockets. For them, losing the current system and its inefficiencies would mean losing potential revenue.
Some of the groups funded by the industry will be appearing before the committee. I’m thinking of the Conference Board of Canada; some of my students worked there and stopped working on pharmacare because what was being done was unacceptable.
It is all dictated by politics. For a long time, the Montreal Economic Institute has been primarily funded by life insurance. Those organizations are extremely militant on these issues and we hear from them constantly.
When there are conflicts of interest, it is important to hear a diversity of voices. We have to recognize that certain voices receive financial support as spokespeople. We have to carefully balance the importance given to each of those voices.
[English]
Senator Moodie: I don’t know where to start. I guess I will start with the fact that, yesterday, I had conversations and questions for the representative of Canada’s Drug Agency, or CDA, who was here. I was puzzled, and I expressed that puzzlement to her. Because of the language in the bill, she was saying she can only respond on invitation to create a formulary and to look at the research behind bulk buying. It certainly seemed as if the organization did not see itself as the driver of maintaining the formulary, presenting the formulary and adjusting the formulary over time. That didn’t seem to be how we heard her describe her role.
Similarly, across the witnesses yesterday, it wasn’t clear to me who would be doing this bulk buying. In fact, it sounded like we would end up with the provinces buying individually again.
Can you comment on what you’ve heard and how the bill needs to change specifically to address some of the ambiguity that clearly is residing in this particular area? Also, the 11% contribution of industry to their funding is, I guess, another concern that’s being talked about here already — the conflict of interest. Can you talk about that too, please? I’d like to hear from all three of you.
Mr. Gagnon: I can start by saying that a universal pharmacare regime does not have to be single-payer necessarily, but for universal public pharmacare, what you need to have is the institutional foundations for this. You need a drug agency that is arranging a national formulary to reimburse the medication in this formulary. Then the question is how you put the different drugs in that formulary. This is based on negotiations with drug companies in order to make sure we get value for money.
If we end up with drugs that are just way too expensive for the little therapeutic benefits they bring to the population, we need to have the capacity to say “no.” This is the role of a drug agency. I’m not talking about Health Canada. Health Canada is for the approval of medication. We need an agency in charge of the reimbursement of these medications. This is the foundation of every pharmacare program that you find in every other country.
If the CDA is not sure in terms of the role it has to play, the bill basically states they are commissioning the CDA to put in place a national strategy for appropriate use, to develop the formulary and things like that. This is stuff they need to prepare and submit to the minister, and we just don’t exactly know what will be done with this strategy for appropriate use or what will be done in this development of a national formulary.
Senator Moodie: I’ll now ask Dr. Morgan and Dr. Herder.
Mr. Morgan: Just to quickly comment on the question, I think you’ve raised an important concern. As structured right now, individual provinces will still be in the position of negotiating the prices of the medicines that might be covered under this new program that’s created on a bilateral basis with the federal government, but it could be even worse. If the Government of Canada is interested in trying to pursue an agenda wherein any negotiated price discounts by the public program must also be passed on to private insurers, even though the private insurers will fully claim that they’ll reimburse any drug at any price, the effect of that — which is called a most-favoured-nation policy — will actually make it harder for the public program to negotiate competitive prices because, in effect, it has to give away the negotiated rebates to the private insurers. This kind of policy is a problem.
If you have Canada’s Drug Agency doing the negotiation on behalf of a public program in every province and territory that signed on, then you would have a truly powerful negotiator which would be able to get the best prices. I want to be clear too: That negotiator can also ensure that the supply contracts with manufacturers include clauses that guarantee the security of the supply that Canadians need, which is an important element missing from the strategy that currently is under way at the pCPA.
Senator Moodie: Thank you.
Senator Dasko: Thanks to our witnesses. My question is as follows: Let us assume that there are no amendments to this bill, regrettably. Let’s assume there are none. What are each of your priorities for going forward in that scenario? What are the most important things that must be done? I’d like to ask all witnesses that question. Professor Morgan, please go ahead.
Mr. Morgan: With the ambiguities in this piece of legislation, the emphasis would have to be on ensuring that the current health minister implements this legislation in a way that’s consistent with the Hoskins recommendations, ensuring that every single bilateral deal with the provinces requires that it be universal, first-dollar, public coverage, and ensuring that Canada’s Drug Agency is the agency that would be able to negotiate the supply contracts. It’s essentially going from legislation into regulation. You would need to have absolute assurance that this isn’t going to be the “let a thousand flowers bloom” version of a pharmacare program, which would actually undermine the broader objectives that have been long recommended here.
Senator Dasko: Okay, thank you. Professor Gagnon, please go ahead.
Mr. Gagnon: Basically, I would say to make sure that private drug coverage is not being made mandatory in order to ensure that private drug plans continue to pay a share of the drugs.
As an example of that, in Quebec, we can say we have universal pharmacare. Everybody has drug coverage of some sort, so it’s universal; everybody’s covered, and they have a drug regime, so it’s fine. This is the thing about making this mandatory: I was working with consumer groups, for example, and we ended up with cases sometimes — I remember when a full-time student in Sherbrooke was working two weekends a month as a personal support worker. She was making $540 a month, but because the employer was offering a drug plan, the drug plan was mandatory, and the premiums became mandatory for her — she did not have a choice. She had to pay $190 a month for the premiums for the drug benefit.
When a person arrives at the pharmacy counter, it doesn’t make a difference whether it’s public or private coverage reimbursing this; they’re getting the drug. Well, for a full-time student, it’s a world of difference when being paid $540 a month versus $350 a month, basically.
Senator Dasko: Professor Herder, I don’t know if there’s time. What would be your priorities?
Mr. Herder: Well, I hope that’s not the case, but if it’s unamended, the committee of experts becomes an accountability structure. Making sure it has access to bilateral negotiations that follow through the federal Minister of Health’s office and making sure there’s transparency about the work of the committee becomes a way of trying to keep oversight on the implementation process. As I mentioned already, it’s important to make sure that committee is comprised of experts and folks with lived expertise as well and that it is free of conflicts of interest. Disclosing them is not enough.
Senator Dasko: Thank you.
Senator Bernard: Thank you to all of the witnesses for being here and for sharing your expertise, and thank you for the work you do. Thank you for having students who may be our future decision makers monitoring what we’re doing here.
I want to follow up on the question that Senator Dasko just asked. There’s lots of discussion about insurance companies and changes that may happen. I keep thinking about this: Who is the real target here for this legislation? I’m thinking about those Canadians who have no coverage — those who have to make a choice every month about whether or not they pay for prescription medication or pay their rent or buy food or buy shoes for their children to wear to school. There’s a lot of pressure to not make amendments.
But when you think about the poorest of the poor amongst us who have no pharmacare, what are your thoughts about this bill as it is or significant amendments? What’s your recommendation to us in terms of how we should show up for those people who have no pharmacare and are waiting for us to make the right decision? What is the right decision?
Mr. Morgan: I will very quickly answer and then leave it to my peers to add to this.
One of the things we need to do is make sure we treat the poorest of the poor in this country in exactly the same way we treat the richest of the rich in terms of ensuring equitable access to carefully selected medicines based on safety, efficacy and value. All of the countries participating in the meetings that I’m hosting this week provide universal access to medicines across incomes, ages, occupations, et cetera, on equal terms and conditions. That ensures that the richest people in those countries make sure that those programs work very well for themselves and for the poor.
That’s the mentality needed. Canadian medicare works for the poor in this country reasonably well anyhow, in part because it’s the same system that serves the rich. I think we need to remember that as it relates to medicines policies.
Senator Bernard: Well, some might argue that our current system doesn’t work so well for the poor.
Mr. Gagnon: Regarding the current system, what I think is fascinating is that we’re massively subsidizing the current inefficient system but in a completely regressive way. Basically, we’re not taxing premiums being paid for drug benefits.
If I’m making $200,000 a year and my marginal income tax rate is 50%, I’m getting a huge subsidy for my drug benefit. If I’m making $20,000 a year and my marginal income tax rate is minimal, I’m receiving no subsidies for my drug benefit. That’s the current system we have.
Yes, right now, we have a very vulnerable population that requires additional coverage; that’s for sure. Regarding the example I was using about the full-time student in Quebec, for me, if we end up with the wrong system, we still put a much greater additional financial burden on the poorer, more vulnerable population as compared to a good universal system that covers everybody from the start.
Just another example —
The Chair: Professor Gagnon, I’m sorry. Colleagues, I have disappointed you and myself: There will be no time for a second round.
I have a question that I would like to put as well.
We are the house of sober second thought. We like to get things right. You have raised a lot of issues. Yet we do not exist in a political vacuum. From your point of view on this bill, warts and all, ambiguities and all, is it better than no bill at all?
Mr. Gagnon: Sadly, I don’t know.
The Chair: You don’t know. How about you, Professor Herder?
Mr. Herder: It’s unclear. The prospect of access to contraceptives and diabetes medications seems promising, but, as I said, I think that will be a very short-lived victory. I worry we won’t open up this question again unless it’s a more fulsome piece of legislation. I think amendments can be made, and the House passed it in error; you can see that in almost every provision of the bill. The wording is ambiguous and poorly drafted. A little bit more time and some thoughtful, surgical, tactical amendments would be incredibly helpful.
The Chair: But those amendments were defeated in the House of Commons. As I said, we are not the House of Commons, but we don’t exist in a vacuum.
How about you, Professor Morgan?
Mr. Morgan: As the legislation is currently written, I think no legislation is better than this legislation. I say that as someone who has spent 30 years working on this file in Canada.
The reason I say that is this: If the Government of Canada really wants contraception and diabetes treatments to be available to Canadians in bilateral agreements, there’s nothing stopping it from doing so within the context of the current bilateral agreements it has for a variety of health care issues and the priorities that provinces might seek.
If this legislation creates a legal precedent, and if it opens the door to a patchwork of private and public plans, pharmacare — as it goes on for generations — could be one of the most costly pieces of legislation in Canadian history.
Senator Senior: I hate to say it, Madam Chair, but I think you asked my question.
However, I also want to try to understand something. Several times, Minister Holland mentioned that this legislation was really pieced together under pressure, as I think one of you said. It is that pressure point that I’m curious about; it’s the source of the pressure or where the biggest pressure point would be in terms of understanding his notion that if we recommend — or pushing us to not have amendments on this. Do you get a sense of where the biggest pressure point is?
Mr. Gagnon: When it comes to different commercial insurers in particular, keep in mind that for private drug plans, it means insurance companies losing a market of around $12 billion or $13 billion every year. Insurers are part of the constituency as well.
I was a bit flabbergasted in terms of the corporate power of drug companies during the pandemic, in particular. Basically, the Canadian government was grovelling in front of the interests of drug companies in order to try to ensure the supply of vaccine doses. We did very well, by the way, in terms of vaccine nationalism; we performed very well. However, that was under the condition of just following the conditions imposed.
When it comes to pressure, like I said, there’s a lot of money to be lost for different people, and they would like to preserve the current system. They will do everything they can for that. That’s it.
Senator Senior: Do I still have a minute?
The Chair: You have a minute.
Senator Senior: Are there any other thoughts on that?
Mr. Morgan: It’s fair to say that the supply and confidence agreement was coming to an end; in fact, it had been extended during the negotiations last fall into the February-March window. Both parties wishing to extend the life of this current government came to a hastily agreed-upon final recommendation. As the minister testified, every word was argued over.
I think it’s fairly clear, given the minister’s comments, that he might have been one of the sticking points because he doesn’t believe in the recommendation from the Hoskins advisory council of a publicly administered pharmacare program.
This is politically motivated in part because of the supply and confidence agreement. Frankly, I’ll be clear: It can’t be lost on Canadians or anyone who has a sense of politics in this country that getting contraceptive coverage is important. British Columbia had already done so, and Manitoba is now doing so. But it’s also politically important to this government going into an election where the polls show them being so far behind. It would bring contraception and reproductive rights into the national discourse during this election.
I want to emphasize again that you don’t need this bill for the government to do that. It could do that through bilateral agreements that are separate from a piece of pharmacare legislation.
The Chair: Thank you very much.
Colleagues, we have come to the end of this particular panel. Thank you so much, Professor Gagnon, Professor Herder and Professor Morgan, for your wisdom and insights. You have raised a lot of questions in our minds that we hope to further clarify as we continue our study of this bill.
For our second panel, joining us in person, from the Council of Canadians, we welcome Nikolas Barry-Shaw, Trade and Privatization Campaigner; and from The Conference Board of Canada, we welcome Eddy Nason, Director, Health. Joining us by video conference, from the Montreal Economic Institute, we welcome Emmanuelle B. Faubert, Economist; and Daniel Dufort, President and Chief Executive Officer. Thank you for joining us today.
We will begin with opening remarks from Mr. Barry-Shaw and Mr. Nason, followed by Mr. Dufort. You will each have five minutes for your opening statements.
Mr. Barry-Shaw, the floor is yours.
Nikolas Barry-Shaw, Trade and Privatization Campaigner, Council of Canadians: Thank you, Madam Chair.
For the last two years or so, I’ve been more or less a full-time pharmacare campaigner with the Council of Canadians. We’re a grassroots, membership-based organization. We have 30 chapters across the country. We have over 150,000 supporters of our work.
Throughout the campaign for pharmacare, we have organized 18 town hall meetings on pharmacare in cities and towns across the country. We’ve collected over 10,000 signatures of people calling for a national pharmacare plan. We have placed more than 5,000 phone calls to MPs and cabinet ministers in favour of pharmacare.
What we have been demanding through this campaign is a national pharmacare program that is public, single-payer and universal. We are calling for the Senate to pass Bill C-64 without amendments because we believe this is a critical step toward that goal.
The need for such a program has never been clearer. I know we’ve had some discussion here about the extent of the problem. I want to underline this point: Access to medicines was already a crisis before the pandemic. Since the post-pandemic inflation, it has become even worse.
In the briefing you’ll be receiving — I believe it’s being translated — we show that, according to the most recent surveys, 22% of Canadian households report someone who is unable to afford their medication. They’re skipping doses. They are cutting pills. They’re not renewing their prescriptions. That’s a huge number of households for whom the cost of medication is an enormous struggle.
We know that cost-related non-adherence is a bigger issue for people with diabetes, and cost is also one of the main barriers to women and gender-diverse people getting access to contraceptives. We think this is urgently needed. We don’t want to see the bill delayed any further.
I would also like to underline that this is not a problem that is only for those who are uninsured. Some of the debates have gotten mixed up with that. We heard the statistic cited of 97% of Canadians supposedly being eligible for some form of insurance.
In our campaigning, our discussions and the feedback we received from members and supporters about their struggles with the high cost of drugs and inadequate insurance, the problem is — more often than not — that the cost of drugs is so high that people cannot afford to access them, even with coverage. Because there are cost-sharing mechanisms in most public and private plans, this is a real problem even when people have coverage.
The Hoskins report showed that 6 out of 10 people reporting cost-related non-adherence are people who have coverage under an existing plan. Recent polling that has been done shows it is possibly 7 in 10 people who are reporting great difficulty in affording their medications are people who also have existing coverage. I wish to underline this point: the importance of this universal, first-dollar coverage starting for these two classes of medications. We are looking forward to seeing that same standard expanded to drugs as they are added to the formulary on the essential medicines list.
The discussion was rich before. I had some prepared remarks; however, I wanted to jump into the question of the ambiguities of the bill and briefly say we recognize them, but we feel they are less at the level. We think there are many strengths in the bill, particularly clause 6(1) which is pretty clear that the coverage will be universal, single-payer and first-dollar. The funding for that first phase of the program will be for public plans. That’s one of the reasons we want it passed without amendment.
We think it’s setting a precedent. There is a political opportunity here that we need to seize. It is also crucially important to safeguard the policy-making process from conflicts of interest and corporate actors who are trying to influence this process.
We’ve done a tremendous amount of reporting and research on lobbying of the minister and his top officials throughout the development of the pharmacare legislation. This is something we see continuing today.
We’re very concerned that Canada’s Drug Agency and the committee of experts be free of conflicts of interest. I would reiterate Matthew Herder’s point that it is vitally important that people on those committees not only disclose their conflicts of interest but also be excluded from them if they have any ties to the two industries that stand to lose the most from a public, single-payer system, namely pharmaceutical companies and the insurance industry.
The Chair: Mr. Nason, the floor is yours.
Eddy Nason, Director, Health, The Conference Board of Canada: Good afternoon, everybody. I am very happy to be here today to discuss our work on prescription drug coverage.
This dates back to July 2022 when The Conference Board of Canada published a report entitled Understanding the Gap 2.0: A Pan-Canadian Analysis of Prescription Drug Insurance Coverage. This was an update to a previous analysis entitled Understanding the Gap that was released in 2017.
In this study, which has been mentioned a couple of times, there was an estimate that it was only around 3% of Canadians who were not eligible for some form of prescription coverage either through their provincial public coverage or through private plans.
That was a drop in the gap when looking at the previous estimate in 2017 where it was around 5%. You can see that change was driven predominantly by the introduction of OHIP+ in Ontario, which provided prescription drug coverage to 1.3 million more children and youth. So that increased the numbers from 2016.
When we think about the uninsured population — that is, those who are not eligible — it represents two provinces: Ontario and Newfoundland and Labrador, which don’t have either universal public drug coverage, a set of programs that are open to the whole population or enough programs to cover their full provincial population, or where their public plans cover those who do not have private coverage — so fill in the gap on private coverage.
Sometimes, in the case of high drug costs, those who are not insured in those provinces may still become eligible for catastrophic drug coverage that will be provided by their province.
However, even with eligibility for plans, 10% of the Canadian population in this study was not enrolled in a public or private plan. Again, that was down slightly from previous estimates in 2017.
In addition, even with the high enrollment in plans, we still see — as Mr. Barry-Shaw just mentioned — that many Canadians do not have sufficient access to medications that they need. This is caused by a variety of reasons. This analysis identified a few of them: an inability for lower-income households to cover out-of-pocket drug expenses; the differences between what medications are available between public and private plans or across provincial public plans; the time to access for newer therapies in public drug plans, which tends to be slower than private plans — those in private plans might get access before those in public plans; and plan coverage caps or spending limits, meaning that full courses of treatment might incur out-of-pocket costs for individuals.
These access issues align with social inequities in Canada, in particular with household income levels, with aging populations with multiple comorbidities requiring more medications, and with racial and ethnic backgrounds of individuals and families.
Thank you for the invitation to participate. I look forward to discussing the report further with the committee.
The Chair: Thank you very much, Mr. Nason.
Mr. Dufort, the floor is yours.
[Translation]
Daniel Dufort, President and Chief Executive Officer, Montreal Economic Institute: Thank you for inviting us to discuss such an important issue as pharmacare.
Bill C-64 raises major concerns as to its impact on the quality of coverage and access to prescription drugs for our fellow Canadians. In fact, it departs from an essential principle in public policy, which is that, above all, no harm should be done to anyone.
Currently, 24.6 million Canadians have private insurance coverage, roughly 65% of the population. Unfortunately, a universal plan would threaten the quality of coverage for at least 21.5 million Canadians. Private plans cover 51% more prescription drugs on average than public plans do. This reduction in the quality of coverage is simply not justifiable.
Moreover, establishing a national pharmacare plan would be extremely costly. According to the Parliamentary Budget Officer, the total cost to the federal government would be close to $39 billion by 2028, including $13.4 billion federally. Those additional expenditures would place considerable pressure on our public finances, which are already weakened by a net debt of $1.3 trillion and recurring deficits on the horizon.
Currently, it takes an average of 732 days for a new prescription drug to be approved under public plans, compared to just 226 days under private plans. In many cases, patients cannot afford to wait even longer for prescription drugs to be available.
Right now, there are 1.1 million Canadians who are not eligible for any prescription drug coverage. Measures must be taken to help them, but without hurting the rest of the population. Rather than establishing a national pharmacare plan that could disrupt current plans and reduce the variety and quality of drugs available, we should focus instead on expanding coverage for those who do not currently have any. With this bill, the government would essentially be taking away the prescription drug plans that Canadian workers work hard for and that their families depend on. It would replace those with significantly weaker plans.
As with any public insurance plan, costs will have to be contained. That would inevitably mean reducing availability: Fewer medications would be covered and wait times would be longer. That is not a flaw in the system, but rather one of its basic characteristics.
In conclusion, while a national pharmacare plan might seem attractive in theory, in practice there are many risks and drawbacks. We must and can ensure that all Canadians have access to the prescription drugs they need without compromising the quality of existing coverage. I encourage you to consider these aspects and to work together to find solutions that will improve the lives of all Canadians, instead of being detrimental to a significant majority of them. Thank you for your attention.
[English]
The Chair: Thank you very much, Mr. Dufort.
Senator Cordy: Mr. Nason, thank you very much. I’ve read many reports from The Conference Board of Canada. You do great work. You indicated that 3% of Canadians have no private insurance. Correct me if I’m wrong because I was writing quickly. Some provinces have catastrophic drug coverage. My province of Nova Scotia has drug coverage for seniors. You spoke about the percentages and different categories, but you didn’t say whether or not you are in favour of this bill. Was that intentional? Could you tell us a bit about it?
Mr. Nason: Just to clarify, the 3% is the proportion of Canadians who are not eligible for any kind of coverage, whether they have private, public or any of the other systems that exist in Canada.
In terms of this bill, I am in favour of it conceptually, and, as was identified in the last session, there are some challenges with how it might be implemented.
Senator Cordy: That was very diplomatic.
Mr. Barry-Shaw, thank you also for the statistics and the information that you gave us. You said that there are ambiguities in the bill, but the premise of no cost is enough, and so many people whom you have spoken to have said that it is a necessity for them. Could you expand on what you’ve heard from people? What happens if we amend this bill?
Mr. Barry-Shaw: We’ve had the opportunity to meet many people over the past two years. I’m thinking of people like Rebecca Redmond, who is a descendant of Sir Frederick Banting who was the discoverer of insulin. She has Type 1 diabetes. She participated in one of our town hall meetings and said that dealing with diabetes is like having a second car payment. It’s tremendously expensive for people. I think of people like the nurse from Saskatchewan who wrote to us. She was working full time. She had adult children at home who needed medications. She had some coverage with her work, but the medications were so expensive that the co-insurance payments were beyond her means. Her daughter wasn’t going to university, and her son wasn’t able to hold a job because he wasn’t getting the medication he needed.
The fact that the program is universal and would include people like this nurse from Saskatchewan and people like Rebecca Redmond — and those who have some coverage but are still struggling with the high cost of drugs — is vitally important. These are all very important principles: We’re making it a health care service like any other, it is recognized to be medically necessary, and we’re not going to put a cost barrier between people accessing it. I hope it sets a precedent going forward.
Senator Cordy: I was shocked last week to pick up medication and have a co-pay of $70 which, for me, didn’t mean we wouldn’t have groceries, so we were fortunate. But for some people, it would mean having to make difficult choices. Is it important that this bill be passed as is?
Mr. Barry-Shaw: I think we have a window of opportunity to do it. I hate to echo the Minister of Health’s points. We’re often at odds with the government on a lot of issues, but, on this point, I think he is right. From what we’ve heard from our allies — we’ve spoken to members of Parliament — we’re not sure if it would pass with amendments.
The Council of Canadians has been calling for pharmacare for about two decades, and we really do feel that it is time to get this started, set a precedent and, hopefully, build on that. I would say this is the way of proceeding, where there is going to be an expert committee that will look into it and decide if we do the PI model or a public, single-payer model. In my mind, there is no doubt.
We heard from Marc-André Gagnon, Steven Morgan and other experts who’ve been working on this. Every single independent expert panel that’s looked into this has said we need to move toward a single-payer system to bring down drug costs and include everyone. If the government will listen to the expert advice —
The Chair: Thank you.
Senator Seidman: Thank you to all our witnesses for your presentations and for being here today. I think I might start with you, Mr. Nason.
Yesterday, the Parliamentary Budget Officer, or PBO, confirmed with the committee that the estimated program cost assumes that Canadians who already have workplace coverage for drugs covered under a national pharmacare program would be expected to continue to access those benefits through a workplace plan. That was the PBO and his estimates. So my question is this: How is this consistent with your understanding of the term “universal, single-payer pharmacare”?
The PBO also told the committee that private employers would have a clear market-based incentive to drop coverage for products captured by a national pharmacare program and would remove it through collective bargaining.
Are you concerned about the likelihood of a reduction in workplace coverage that the PBO confirmed on behalf of union members?
Mr. Nason: Yes, I think it’s inherently an incentive. If you create a system where you are identifying that you are willing to pay for certain things, then other people will not be willing to pay for those things. It’s going to create a challenge when you try to create a system that weaves together other systems, and you say, “We will just cover gaps within it” rather than, as Steven Morgan identified, creating the floor and then identifying how you build upon that floor with the things that would be incentivized for other payers to be implicated in paying for.
Senator Seidman: In fact, we heard from these Canadian experts — and they truly are experts — who testified before that passing this bill would be more dangerous to the potential of ever having a real universal system in this country. Do you believe that? Or do you agree with that? I’m sorry; I shouldn’t be asking if you believe it.
Mr. Nason: I would certainly defer to their expertise on the ability to create a full working pharmacare system. That is not an area that I, or The Conference Board of Canada, have done massive amounts of work in, so their opinions are probably more valuable than mine.
Senator Seidman: Thank you. Mr. Dufort, you mentioned in your presentation that fewer drugs would be available and at a slower availability, or at least it would take far longer for a drug to be available in the public system. I think it’s about a year longer than by a private insurer. I would like to ask specifically about the current list of diabetes products proposed by Health Canada. Have you had a look at it, and do you think it’s sufficiently comprehensive compared to those currently available through workplace benefit plans that have been negotiated through collective bargaining?
[Translation]
Mr. Dufort: To be honest, we haven’t analyzed diabetes medications. We focused on the actual principle of pharmacare and found that private plans cover 51% more prescription drugs than public plans. One can therefore imagine that, as the program is expanded and costs have to be contained, access to new drugs will of course have to be restricted. Moreover, wait times will be longer, as we have seen with the public health care system and with all other programs that are delivered exclusively by the public sector.
Senator Seidman: Thank you very much.
[English]
Senator Osler: Thank you to the witnesses for being here today.
My question is for Mr. Barry-Shaw from the Council of Canadians. You mentioned in your testimony that the council has been calling for national pharmacare for two decades. I believe the council has been calling for national pharmacare as envisioned in the Hoskins report.
You heard testimony from the pharmacare experts earlier today who said passing Bill C-64 as it is currently written would be a dangerous precedent to achieving universal, single-payer, first-dollar, public national pharmacare in the future. Given the testimony we’ve heard today, and given that you mentioned you’ve had conversations with the minister, I would appreciate hearing the council’s view. How would Canadians react if that vision of national pharmacare did not come to fruition?
Mr. Barry-Shaw: I think I disagree with the premise of the question. We do think that this will set us on a path that can build toward a public, single-payer system.
We’ve had a lot of discussions about the idea of people moving from private coverage to this public — basically, it’s creating a public lane. It’s not quite single-payer, but it will create a public lane where there is a public program entirely funded by the federal and provincial governments. It’s universal. It’s first-dollar coverage. I think that will expand, and it will draw in the vast majority of Canadians because the vast majority of Canadians are covered by an existing plan that requires them to pay an out-of-pocket amount for those drugs. I think it has the potential to move us toward that.
I think if people see others are getting diabetes drugs and contraceptives through this program, they will be totally justified to ask, “Why not cancer medications? Why not blood pressure medications? Why aren’t we covering this in the same way?” And I think one of the widely held beliefs of many Canadians is that health care should be a right and should be accessible to everybody based on their need and not on their income, so I think doing that for two classes of drugs will set a positive precedent going forward.
I hear the ambiguities and the concerns, but our assessment is that the danger exists much more at the level of political will. I think the pharmaceutical industry and the insurance industry have done a lot to try to sap that political will. There’s this discussion about the idea that people are going to lose their existing private drug coverage because of the creation of this public lane. It is nowhere in the bill or the Hoskins report. The Hoskins report is explicit that there will be private supplemental health benefits that cover drugs not on the national formulary.
I feel like we are often in a political environment where there is a lot of disinformation put out by corporate actors who have a very clear vested interest in opposing national pharmacare. That is the level the fight will continue at. It will also be fought out at the level of the provinces. We’ve seen a lot of registration of lobbyists from pharmaceutical companies and insurance companies at the provincial level. As soon as Bill C-64 was unveiled, they started reorganizing their efforts toward influencing provincial governments.
I agree with Steven Morgan’s point that if this passes without amendments, which is what we would like, there is going to be a political struggle to be had at the level of the provinces to make sure that the standards and the shape of the programming that we want to see come to be is realized.
Senator Osler: I apologize; perhaps I phrased my question incorrectly. I wanted to gauge your reaction to the testimony.
[Translation]
Senator Mégie: I listened to the story that Mr. Barry-Shaw told earlier about the nurse in Saskatchewan. I also noted that the Conference Board of Canada published quite a comprehensive article on the complications of diabetic foot care.
Considering that nursing costs alone are $54 million, would it not be reasonable to think that Bill C-64 would at some point become an investment for Canada rather than an expense? The big upfront cost…. It is $1.9 billion, which is a lot. On the other hand, by preventing those extremely costly complications in diabetic patients, should we not instead see it as an investment?
What are your thoughts, Mr. Nason, since we are talking about the Conference Board?
[English]
Mr. Nason: I think I agree; any approach to national pharmacare is an investment. You acknowledge that there are upfront costs that lead to cost savings elsewhere in the system. That diabetic care study and report is a good example of this: When you potentially make new investments, you can reduce the costs associated as well as the health care outcomes and individual outcomes associated with those diabetic complications. I don’t know if there’s any argument that it’s potentially a wise investment, but, as with most investments, it’s how you make your investment that matters and how you monitor and support that investment through time.
I think the whole national pharmacare discussion is not just that it’s a good idea — I think we generally acknowledge it has public good and potential investment good; it is a good one — but it’s also how you make it work that has been mentioned, which I think will be the thing that decides whether it’s a good investment or not.
[Translation]
Senator Mégie: Thank you. I have another question for the Montreal Economic Institute. In February 2024, you published an article on the dangers of a pharmacare program in Canada.
Did you share your concerns with the House of Commons Standing Committee on Health when it was considering the bill? Could Mr. Dufort answer please?
Mr. Dufort: I am not sure if some of my colleagues might have done that. I did not do so myself.
Senator Mégie: And you did not send them a brief on the topic?
Mr. Dufort: Not to my knowledge, but once again I do not know what every one of our employees might have done.
Senator Mégie: Okay. Thank you very much.
[English]
Senator Cormier: My first question goes to Mr. Barry-Shaw. It is on behalf of the sponsor of the bill, Senator Kim Pate. She wants to know the following:
We hear arguments that moving to a universal, single-payer, public system will disrupt coverage or even leave Canadians with less coverage than they currently have. Can you expand on how and why, in your view, single-payer coverage will make access to medicines better or worse? That’s a question from Senator Pate.
Mr. Barry-Shaw: From what we’ve heard from the government and what this bill lays out, it’s going to be levelling up the existing coverage for the first two classes of drugs in provincial plans. The federal government is providing transfers for provinces to level up their coverage to a standard that is first-dollar and universal. They would have to eliminate the existing co-payment structures or the existing restrictions on eligibility for public plans and make it truly universal.
That’s how we understand the first phase of the bill functioning, and that doesn’t do anything to people’s private coverage. It may incite them to shift over. For me at my work, I have a workplace plan. If I had diabetes and I needed a medication that was on the national list, and I decided to use that system, the only thing that would happen — and I would hope it would happen — is that my employer would renegotiate lower premiums because they wouldn’t need to cover me anymore. There would be fewer claims for diabetes drugs because now this national pharmacare plan would be covering a certain portion of them.
[Translation]
Senator Cormier: My next question is for all the witnesses.
Mr. Gagnon referred earlier to wastage of prescription drugs. We know that, in Canada, there are challenges relating to underconsumption and overconsumption of prescription drugs. Bill C-64 would require the minister to publish a pan-Canadian strategy on the appropriate use of prescription drugs and related products.
In your opinion, what should the key components of that strategy be? How could a national strategy on the safe and proper use of prescription drugs affect the underconsumption, overconsumption and misuse of prescription drugs in Canada? Who would like to answer? Mr. Dufort, would you like to answer?
Emmanuelle B. Faubert, Economist, Montreal Economic Institute: If I may, an interesting strategy would be to educate the public on the proper use of prescription drugs. That information could be helpful and influence people to use their prescription drugs correctly. It would not affect the quality of prescription drug coverage, which is also extremely important.
Senator Cormier: Does anyone else have anything to say?
[English]
Mr. Barry-Shaw: Just very briefly, for a strategy like that, one of the things it should probably do is investigate and require greater transparency in terms of payments that pharmaceutical companies make to doctors to try to influence their prescribing habits.
This isn’t an area where I’m an expert, but I know Dr. Joel Lexchin has done a tremendous amount of research on this question and has said that Canada has very lax regulations around this aspect in particular. I think the problem in Canada is a classic problem of poverty amidst plenty. We have some people who have too many medications — I think the fentanyl and opioid crises are a very good example of this. On the other hand, we have a huge number of people in Canada who are struggling to afford medications that they truly do need and that would improve their health immensely.
Mr. Nason: Very quickly, while we have not done work on this, organizations like Choosing Wisely Canada have done great work on appropriate prescribing and appropriate use. I think they have set the precedent for how that might fit into an appropriate use strategy for the country, and then thinking about those knock-on effects: What does that mean in terms of what is prescribed and where you see substitutions of generics? Those sorts of things will become part of that appropriateness conversation. I see it becoming a good place where we have good Canadian background data for it.
Senator Cormier: Thank you.
Senator Moodie: Mr. Barry-Shaw, this question is for you. We’ve heard from academic experts that, should this bill pass with no amendments, certain things become more important and essential. One of them is that the committee of experts becomes the accountability arm of the future when it comes to understanding if pharmacare is working — if it is going to the right people, if they are getting what we promised, et cetera.
As written in the bill, do you think the language is firm enough, tight enough and explicit enough to give the committee of experts the power they need to manage data, get data, understand where things are trending in this country and have the power to influence future decisions? Do you think the language is tight enough? Are there changes there that you think we need to see?
Mr. Barry-Shaw: I’m going to have to plead ignorance on that particular point. I spend a lot of time considering other aspects of the bill, but I’m not sure I have a convincing answer for that.
Prior to the presentation, I corresponded with the experts who were presenting earlier, and we’ve had a lot of discussions about this bill.
A lot of their proposed amendments are positive and go in the same direction as the Council of Canadians and many other national organizations that support public, single-payer pharmacare.
I’m just concerned about the cost-benefit and the risk we run of the bill getting bogged down and not passing, or taking a very long time to pass which will delay the rollout of the program. That is a much bigger risk than the gains we would receive from clarifying certain elements of it. It is a tough call. It is a tough political question with which we’ve been wrestling.
Senator Moodie: You recommend that we send a message to the government essentially, not an amendment? Are you confident that will achieve what you hope it will achieve?
Mr. Barry-Shaw: By itself, probably not. It is one way the Senate can contribute to pushing the government in that direction.
We will continue. We’ve talked a bit about the political pressures on the government. One of the reasons we have this bill is because of the counter-pressure.
Regarding the Council of Canadians, I’ve talked about our campaign. We did a tremendous amount of lobbying and urging the government to act on this thing, as did many unions and many health coalitions. We’ll need to continue to do that. I wish I could just go home and relax and be confident that everything will work out, but, no, we’ll have to be extremely vigilant going forward.
Senator Moodie: Thank you.
Senator Bernard: Thank you all for your testimony today. I appreciate it. I have a question based on a comment from one of you about the small number of Canadians who are not eligible for any current coverage. Who are they? Who is in that number? You could remind us of the percentage you talked about, but I’d like to know who they are and whether this bill, as currently presented, will address the problem.
Mr. Nason: This is from work done by The Conference Board of Canada in looking at data from 2021. Around 3% of Canadians were not eligible for any form of prescription drug insurance. The work was driven by two provinces — Ontario and Newfoundland and Labrador — where there is not full universal coverage nor, essentially, coverage existing for those who do not have private health insurance.
It tends to align with people who have lower socio-economic standing. It tends to align with younger people who don’t have access to private health care and don’t fit into the older age public drug systems.
I think it was Steven Morgan who described this bill as terse in the way it was written. It does not get into much detail on whether it would achieve coverage for this group of people.
Despite the number being 3% of Canadians with no ability to be insured, the aim of the pharmacare bill is to make sure people have access to the medications and not just to being insured. That number is far larger, and that’s the issue that really needs to be addressed. As you have pointed out, there’s a massive equity challenge in how that gets done.
Mr. Barry-Shaw: I’m glad we recognize that the problem is much bigger than the 3%. The trouble with the 97% statistic is that it’s served as a pretext for minimizing the problem and for saying we don’t need a universal, single-payer system. It has been used again and again in op-eds written against this bill — often written by think tanks funded by pharmaceutical companies and the insurance industry.
I don’t know if it was disclosed in the materials provided to the committee, but this particular statistic is from a study funded by Innovative Medicines Canada, or IMC, which is the chief lobby group of the drug industry in Canada. It was based on data provided by the Canadian Life and Health Insurance Association, or CLHIA, which is the chief insurance industry lobby group. It was based on an original study from 2017 designed by two members of IMC and two members of CLHIA.
We kind of get bogged down in a lot of these discussions because these things have been thrust into the public sphere by commercial interests. It’s slowing us down when the real issue is the far larger number of people who can’t afford their medications, whether they’re covered or not.
The Chair: My question will be for Mr. Barry-Shaw. As we cast our eyes beyond our border to other countries, other like‑minded jurisdictions do have universal pharmacare. How does our model, as proposed, compare to others?
Mr. Barry-Shaw: It compares extremely poorly. I think it was the Hoskins report that found that levels of cost-related non-adherence in Canada were two to five times higher than in other countries — peer nations — that have universal drug insurance programs. We pay some of the highest drug costs per capita. The last annual report of the Patented Medicine Prices Review Board said we were second. We were third for a while, but now we are second in terms of drug prices, just behind the U.S. The U.S. is in a class of its own, as we understand.
This system costs a lot, and it leaves a lot of people still unable to afford their medication. It has a tremendous amount of administrative inefficiencies. That is something that Dr. Gagnon has spoken on and written about at length: Having hundreds of public plans and thousands of private plans creates a tremendous amount of administrative overhead that would not exist in a more streamlined public system.
The Chair: Thank you.
Senator Cardozo: I’m not a member of this committee, but I’m watching it very closely. I’ve been a long-time supporter of pharmacare. My view is certainly that when medicare started 67 years ago, this is the one piece that was missing. We’re catching up to the missing parts of medicare. We’re talking about dental care, mental health care and pharmacare. To me, this is very important — no question.
My question is whether this is the best way to go and whether this bill is the best way to approach that. I think we’re the only country in the Organisation for Economic Co-operation and Development who have medicare but don’t have pharmacare. There’s no question we need to move in this direction.
Let me ask you about that. Is that a fair kind of philosophical approach? Do you agree with that? I think the answer is “yes,” but if you can add to it, that helps.
If it’s not 97% who are covered, what is the figure that you think is covered? I’d ask both Mr. Barry-Shaw and Mr. Nason to comment on that.
Mr. Barry-Shaw: The numbers I cite in my submitted brief in terms of cost-related non-adherence refer to the people who can’t afford their medications. We’re talking about 22% of households where there’s someone who can’t afford their medications. That’s a huge number.
Some people say they’re suffering financial distress. Some people say they’re having difficulty affording their medications. Others are able to fill their prescriptions but are having to cut back on other things. Some surveys suggest the percentage of people who say they are having trouble is as high as 40%, so this is a huge number of Canadians.
For some people, the problem is more serious when they have absolutely no coverage in general. It’s a problem for many different people, and it’s not always obvious.
Our system ends up acting like a tax on the sick. You get an illness, and you suddenly discover that you have to pay a tremendous amount out of pocket in order to continue living. That’s just an obvious injustice, and this program could change that.
Mr. Nason: In answer to your first question, yes, pharmacare is one of those key aspects that will add to the medicare conversation regarding what has not yet been addressed. Philosophically, I would agree with that. There’s no disagreement in any of The Conference Board of Canada’s work with what Mr. Barry-Shaw has just said.
We identified the 3% as those people who don’t have eligibility for anything. That is not the number of people who cannot afford their medications. We go through some other percentages in our report to reach the idea that there are 10% or so who aren’t enrolled even though they might be eligible. When you get past that 10%, you get to those people who aren’t able to afford their medications, or who are able to afford them but then have to forego other things.
Those proportions that Mr. Barry-Shaw is identifying do not seem out of the ordinary in terms of the number of people who may actually benefit from having a pharmacare approach.
Senator Cardozo: I will go to a couple of details in the bill. Clause 4(d) refers to providing universal coverage of pharmaceutical products across Canada, so it’s all. Then you go to clause 6(1), where they talk about specific prescription drugs and related products intended for contraception or the treatment of diabetes. It seems almost contradictory that clause 4(d) says “all,” but clause 6(1) refers to two issues.
What the minister seemed to be saying — I don’t want to put words in his mouth — was that clause 4(d) was what they were really talking about, and clause 6(1) came about as a result of negotiations between him and Don Davies. I can see how those things happen. What’s your feeling about the difference between those two?
Mr. Barry-Shaw: My understanding — and this is also from communications we’ve had with Health Canada officials — is that clause 6 is about the first phase. It’s a phased approach. The first phase is we’re immediately going to provide coverage for these two classes of drugs — diabetes medication and contraceptives — and eventually, in a year’s time, we’re going to be working on essential medicines. I think clause 4 is talking in more general terms because it’s leaving the scope there for covering a wider list of essential medicines. I think that’s all.
Senator Cardozo: Do you want to add anything?
Mr. Nason: All I would say — I’m not a constitutional legislation expert — is this certainly speaks to the ambiguity that the experts mentioned in the first session.
Senator Cardozo: Thank you.
[Translation]
Senator Mégie: I don’t have a question, but with your permission, I have a request for Mr. Nason of the Conference Board of Canada. Could you please provide the committee with the report entitled Understanding the Gap 2.0: A Pan-Canadian Analysis of Prescription Drug Insurance Coverage? That might be helpful to us.
Do we already have it? Even though the report goes back to August 2022…. Do you have it?
[English]
The Chair: Thank you, Senator Mégie, for the request. It is an important request and would help us a great deal. Unfortunately, if it’s not already translated —
Mr. Nason: It should be available online in both official languages, I believe. I would have to look.
The Chair: Wonderful. Thank you.
Colleagues, I think that brings us to the end of our questions. I wish to thank our panellists very much for appearing in person and online. You have helped us understand the various contours of this legislation.
Colleagues, we will resume our study of Bill C-64 next Wednesday at 4:15 p.m.
(The committee adjourned.)