THE STANDING SENATE COMMITTEE ON SOCIAL AFFAIRS, SCIENCE AND TECHNOLOGY
EVIDENCE
OTTAWA, Wednesday, October 2, 2024
The Standing Senate Committee on Social Affairs, Science and Technology met with videoconference this day at 4:21 p.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, senator from Ontario, and I’m the chair of this committee. Today we’re continuing our study of Bill C-64, An Act respecting pharmacare. Colleagues, since we have lost a little time, we’re going to shave a little time off this panel and the next panel so that we’re completely fair. I apologize to our guests, but this happens in the Senate.
Before we begin, I’d like to ask my colleagues to introduce themselves, starting with Senator Dasko.
Senator Dasko: Donna Dasko, senator from Ontario.
Senator Pate: Kim Pate. I live here in the unceded, unsurrendered territory of the Algonquin Anishinaabeg.
Senator LaBoucane-Benson: Patti LaBoucane-Benson, Treaty 6 territory, Alberta.
[Translation]
Senator Brazeau: Patrick Brazeau, Quebec.
Senator Petitclerc: Chantal Petitclerc, Quebec.
[English]
Senator Burey: Sharon Burey, Ontario.
Senator Osler: Flordeliz Gigi Osler, Treaty 1 territory, homeland of the Red River Métis.
Senator Seidman: Judith Seidman, Montreal, Quebec.
[Translation]
Senator Mégie: Marie-Françoise Mégie, Quebec.
Senator Miville-Dechêne: Julie Miville-Dechêne, Quebec.
[English]
The Chair: Joining us today for the first panel, we welcome the following witnesses in person: From Innovative Medicines Canada, Bettina Hamelin, President, and Declan Hamill, Vice‑President, Policy, Regulatory and Legal Affairs; and from the Canadian Generic Pharmaceutical Association, Jim Keon, President, and Jody Cox, Vice-President, Federal and International Affairs. Thank you for joining us in person.
We will begin, Ms. Hamelin, with remarks by you, followed by Mr. Keon. You’ll each have five minutes, followed by questions by my colleagues. Ms. Hamelin, the floor is yours.
Bettina Hamelin, President, Innovative Medicines Canada: Thank you, Madam Chair, and good afternoon, honourable senators.
Innovative Medicines Canada, or IMC, is the national association for the innovative pharmaceutical industry, from small start-up companies to large multinational corporations.
[Translation]
Our industry takes great pride in contributing to the health of Canadians, supporting our research and life-sciences ecosystems and strengthening our economy in Canada.
[English]
Our industry directly invests $3 billion in research and development annually, fuelling Canada’s knowledge base economy and contributing $16 billion to the Canadian economy overall. Our members are at the forefront of discovering, developing and delivering life-changing new medicines, diagnostics and vaccines to benefit all Canadians.
IMC is committed to finding a pharmacare solution that ensures all Canadians have equitable access to the medicines, vaccines and treatments they need, but not at the expense of innovation.
We welcome the opportunity to work with the Senate to ensure that any pharmacare program elevates Canadians’ access to innovative medicines.
We have identified four key observations that would help achieve this objective, increase the clarity of Bill C-64 and prevent unintended consequences.
The first observation is to build on Canada’s existing drug coverage, rather than replacing it with limited, one-size-fits-all public formularies. The current bill has the real potential to decrease Canadians’ access to the medicines they need and the medicines they already have access to.
Currently, 97% of Canadians are eligible for prescription drug coverage through a public and/or employer-sponsored plan. As part of their employee benefits packages, 27 million Canadians receive robust coverage.
Proceeding with the bill in its current form would circumvent the greater range and ease of access to therapeutic options provided by employer-sponsored plans. It would also encourage these plans to stop covering more suitable therapeutic alternatives when public formularies cover limited treatment options. First and foremost, pharmacare should reduce existing gaps in coverage and take care of Canadians who don’t have access to the medicines they need in our current system. That requires careful collaboration with the provinces and territories and a tailored approach.
Our second observation is that the government should continue to use existing mechanisms to achieve drug cost savings and not add another layer of regulatory authority through national bulk purchasing.
The provinces and territories which have expertise and jurisdiction over health care already jointly negotiate drug prices with industry through the pan-Canadian Pharmaceutical Alliance, or pCPA. The pCPA has realized over $2.6 billion in savings every year for Canadians for brand-name drugs alone. It’s unclear what additional savings are expected that are not already achieved through the pCPA. The added red tape will only result in longer wait times for patients, who urgently need access.
Third, the government should improve and accelerate access to innovative medicines. However, Bill C-64 is silent on innovation and is potentially laying the groundwork for stunted innovation in Canada.
Our industry is developing life-saving treatments that were unimaginable even five years ago. If we want to see innovation happen over the next five years, and the five years after that, Canada’s pharmacare program needs to enable access to innovative medications in a timely manner.
Already, only 44% of new medicines available globally are launched in Canada, and only 21% of these are available through our public drug plans.
[Translation]
Delayed access to innovative medicines provides a strong incentive for global industries to invest in other countries where innovation is more highly valued.
[English]
Therefore, Bill C-64 should set out to recognize and include new and innovative treatments and therapies as essential.
Finally, the government should ensure that interested parties, including industry, are meaningfully consulted on pharmaceutical policy developments and have representation on the committee of experts.
We observe that the bill doesn’t mention any specific stakeholder groups, and we suggest the language be sharpened to include interested parties from both the public and private sectors.
In closing, I would like to underscore our support for any efforts that truly enhance the well-being of Canadians.
The Chair: Thank you, Ms. Hamelin. Mr. Keon, you now have five minutes.
Jim Keon, President, Canadian Generic Pharmaceutical Association: Thank you, Madam Chair. Good afternoon.
We are pleased to contribute to the committee’s study on Bill C-64. Canadians deserve access to affordable, accessible and safe medications. Generic and biosimilar medicines play a critical role in delivering this access and today are used to fill about 80% of all prescriptions in Canada.
Health Canada is clear that the generic and biosimilar medicines sold in Canada have the same rigorous requirements for safety, quality and efficacy as their brand name reference products. Canadians can have full confidence in their generic and biosimilar medicines.
[Translation]
Expanding access to medicines so that all Canadians can benefit from life-saving or life-changing medicines is an important goal. However, as we noted in our submission, Bill C-64 lacks clarity and creates considerable uncertainty. I’ll focus my remarks today on two key concerns: the list of drugs to be covered and bulk purchasing.
[English]
First, on the list of drugs, the Canadian Generic Pharmaceutical Association, or CGPA, shares concerns raised by other groups, including Diabetes Canada, about the gaps in the list of medications to be covered. We have highlighted some of these gaps in our brief. Product gaps raise patient equity concerns and an increased risk of suboptimal prescribing and suboptimal health outcomes for patients. It may also provide a disincentive for public drug plan formularies to continue their coverage of a broad range of prescription medicines and provide a disincentive for plans to expand coverage to new drugs in the future.
The same concerns apply to private drug plans provided by Canadian employers.
The CGPA therefore recommends that all Canadian diabetes drugs and contraceptives currently reimbursed by public drug programs in Canada should be covered as standard practice if pharmacare is implemented.
Bulk purchasing is not defined in Bill C-64, and it’s not clear what this means. It is important to recognize that governments already combine their purchasing power to negotiate internationally competitive drug prices for Canadians, which they do through the pan-Canadian Pharmaceutical Alliance, or pCPA.
Prices for generic medicines are controlled through the pCPA Tiered Pricing Framework. The prices are transparent, and all payers benefit from national generic prices, including private drug plans and patients who pay out-of-pocket — all Canadians. This provides a stable and predictable environment for generic manufacturers to continue to provide existing medicines for Canadians and make the investments needed to launch new cost-saving drugs.
Joint efforts between pCPA and CGPA have resulted in savings of more than $4 billion to participating drug plans over the past 10 years. It is critical that the pharmacare regime respects the existing pharmaceutical pricing infrastructure to ensure stability of the Canadian drug supply.
Any further pressure on generic drug pricing will lead to additional drug shortages, the number of which are already unfortunately high.
The CGPA cautions against the pursuit of risky tendering schemes. By limiting the number of suppliers for a given medicine, tendering increases the risk of drug shortages. If the chosen supplier or suppliers have production or other issues, there could be few, if any, alternatives to meet patient needs.
Health Canada is very concerned about drug shortages. They recently established an entire directorate focused on managing drug shortages and the complex range of issues that cause them. Provincial governments have also dedicated staff to shortages.
Domestic generic manufacturing is a strategic asset for Canada. The facilities that we have currently manufacture products for Canada in over 100 markets. The facilities provide high-quality jobs and many benefits to the domestic drug supply chain. Tendering would create risk and uncertainty that would make it difficult for these facilities to attract new and ongoing production mandates and investments to respond to future health emergencies.
In conclusion, generic and biosimilar medicines are vital to maintaining an affordable and accessible health care system. CGPA urges the committee to amend Bill C-64 to remove the risks and uncertainty that would undermine the stability and affordability of Canada’s drug supply.
Thank you for this opportunity. Jody and I would be pleased to answer questions.
The Chair: Thank you very much, Mr. Keon. Colleagues, we will go to questions.
Senator Seidman: Thank you for your presentations today. My question will be for you, Mr. Keon.
You referred in your presentation to an issue that you also have on page 3 of your brief. You say that:
CGPA and its Biosimilars Canada division are concerned that the limited list of drugs covered under the pharmacare plan will lead to suboptimal prescribing to the medicines made available to the public for free, leading to suboptimal health outcomes for patients. We are also concerned that the lack of a comprehensive approach to universal coverage may provide a disincentive for public drug plan formularies to continue their coverage of abroad range of prescription medicines, and provide a disincentive to expand coverage to include new drugs in the future. . . .
I think that’s a critical point you’re making and would appreciate it if you could dig a bit deeper into that and help us understand why you’re making that kind of a statement.
Mr. Keon: Thank you. The provinces all have drug formularies for their covered populations; they now reimburse those. There are some deductions and copayments in most provinces; it often depends on one’s income level.
If the federal plan becomes law and there are agreements with the provinces, we would expect the provinces will back out of paying for those drugs. Those patients will now get their drugs completely free, according to Bill C-64. The other drugs that aren’t on the Bill C-64 list would be subject to the copayments and deductibles and, perhaps, be income adjusted.
Our expectation is that there will be a drift or a direction to use the drugs that are covered by the plan, which is not comprehensive, does not cover many of the newer drugs, and doesn’t cover many of the very important drugs, particularly in the diabetes area. Again, I will point back to Diabetes Canada’s concerns that this will skew treatment to those drugs that are covered.
When we have asked Health Canada officials why the particular list of diabetes medications was chosen, we haven’t received a good explanation. The answer was always: “Well, we’ll work out with the provinces which drugs are to be covered.” Our members make most of the medications — certainly all those that are off patent — and they would like more certainty going forward as well.
Senator Seidman: You’re suggesting that formularies won’t continue coverage of a certain number of products because they’re not covered under the national universal plan, so there will be a drift away from those products. What happens to people who have coverage for those products after they won’t be in formularies anymore?
Mr. Keon: Or they won’t be prescribed, because the prescribing, presumably, will go to those where there’s no cost to the patient. They’re fully refunded; there is first-dollar reimbursement via the national plan.
Senator Seidman: What happens to a diabetes patient, for example, who has tried maybe 10 different drugs? None have been very effective, and then they try the eleventh drug, it’s effective and they want to stay on that drug. But then they go to the universal plan, and that drug is not in that formulary.
Mr. Keon: I kind of agree with where I think you’re going with the question. We would be concerned that they wouldn’t have full coverage.
The Chair: Thank you, Mr. Keon.
Senator Osler: Thank you to the witnesses for being here today. My question is for Innovative Medicines Canada in relation to your commentary on loss of fast access to new medicines. Your written brief outlines how employer-sponsored drug plans provide faster access to medicines, compared to public drug plans, and provide a greater range of new medicines. It also talks about Bill C-64’s potential detrimental impacts on the health and well-being of patients as well as broader hospital and health system implications.
Faster access doesn’t mean new medicines offer any major therapeutic benefits compared to existing medicines. A report from the Patented Medicine Prices Review Board showed that 88% of the new patented drugs in Canada did not represent a significant therapeutic improvement compared to existing medications and were more expensive. Health Canada data over a 21-year period shows only 1 in 8 to 10 new medicines provided a major therapeutic benefit compared to existing medication, only 1 in 5 new medicines offered a moderate benefit and the remaining 65 to 70% of new medicines were of marginal benefit.
Do you have data that shows that faster access to new medicines reduces health care system costs or translates to better health outcomes for populations, especially Indigenous, Black or racialized patients?
Ms. Hamelin: First, I would like to say that innovation is about options. To improve outcomes for patients, physicians must have access to options. Research has shown us that more personalized approaches to treatment are associated with better outcomes, and there is certainly data that we can provide that supports that statement. We would be happy to provide that.
The Chair: Mr. Keon, may I ask you a question? No bill is perfect. We’ve done enough studies here to know that perfection is not within the reach of a legislative proposal. I understand what you’re saying — that patients should have more options for drugs that suit them — but I put myself in the shoes of a poor person who has no drug coverage, who is not able to pay, and now she will have access to free coverage for essential diabetes drugs and devices and/or contraception and devices. Is that not a good start?
Mr. Keon: We don’t believe that changing the list of drugs covered requires a change in the bill. That can be done through federal funding to expand the list of medications. As I said in response to the first question, there are certainly important medications not covered by this list, so that is something that we think should be expanded.
The provinces have been in the business of covering medications for decades. Through their formulary and expert committees, they have determined which products they want to cover. The federal government’s proposal is a much more limited range of drugs, and we don’t understand why. That’s why we’re recommending that the list be expanded.
We did recommend a change to the bill regarding clause 9, on bulk purchasing. We would like to see that clause removed.
Senator Pate: That’s a perfect segue to bulk purchasing. Thank you to our witnesses. In 2017, the Auditor General of Ontario found that the pCPA-approved generic drug prices at retail pharmacies were nearly double — 85% higher — the prices for the same drugs in Ontario hospitals, where provincial law requires competitive bidding for supply contracts.
Peer-reviewed research from 2017 confirmed that Canadian prices negotiated through the pCPA were 2.5 times higher than prices under Sweden’s national health insurance scheme and 6.25 times higher than under that of New Zealand. Today, Canadian prices remain 5.2 times higher than prices for identical drugs in New Zealand’s single-payer system. On what basis did you determine that moving toward a national single-payer system would not result in significant savings, given that the numbers seem to indicate otherwise? Maybe we will begin with Mr. Keon and then perhaps Ms. Hamelin.
Mr. Keon: On the generic front, since the 2017 report you mentioned, we have had two new agreements with pCPA — in 2018 and 2023. In 2018, there is a list 67 products that have been reduced by up to 90% of the originator price. They’re selling at 10%. I would note that the price of generic medicine supports a distribution system in Canada and pharmacies in Canada as well as generic manufacturing. So there are a number of players who are reliant on generic drug pricing.
Senator Pate: Could you provide to us the data that you’re speaking about?
Mr. Keon: Yes. I’ll also provide you with a report on our website that looks at pricing. In many countries, the studies that have been done measure prices at the manufacturer’s level. In Canada, that’s the maximum we can charge. So, when we support pharmacies or distributors, that’s coming off our net revenues. In other countries, prices are added onto that amount. We looked at the actual prices at retail and found that Canadian prices are actually lower than the so-called PMPRB11 countries.
Ms. Hamelin: For patented medicines, the Patented Medicine Prices Review Board, or PMPRB, sets price ceilings. The recent report from PMPRB shows that Canada actually ranks eighth of the 11 compared countries. This does not exclude the U.S. and Switzerland, which are the more expensive countries. Canada rates eighth of the 11 countries based on list price, based on the purchasing power parity. We’re not an outlier globally in terms of drug pricing.
Senator Pate: Canada doesn’t currently have the watertight regulation that some of the fill-in-the-gap processes would call for, and pharmacare experts are clear that mixed public-private, multi-payer, fill-in-the-gap pharmacare systems like those in Germany and Switzerland rely on a complex combination of watertight regulations for the management, financing and profits to achieve reasonable outcomes at reasonable costs. Even so, they do not perform as well as public single-payer systems. Given that Canada doesn’t have that kind of process, are you advocating that Canada should be relating such a regulatory system, and without it — as we’ve seen in the U.S. — the drug costs paid by individual employers are likely to skyrocket? I want to be clear about whether that’s what you’re suggesting.
Senator Moodie: Thank you, witnesses. I’m going to dig further into Senator Osler’s line of questioning. It has been mentioned that there are gaps in the list of diabetes medications in this formulary that is associated with this legislation, including DDP-4 inhibitors and SGLT2 inhibitors. With regard to one that is included — an SGLT2 inhibitor, dapagliflozin — what is your assessment of its performance when compared to other SGLT2 inhibitors? Are they comparable, acknowledging that there are benefits to SGLT2 inhibitors? Do you expect clinically significant differences in outcomes for patients on the novel SGLT2 inhibitors compared to patients on traditional metformin or insulin regimens?
Mr. Keon: I’m not capable of answering that question. I’m not a medical clinical expert.
Senator Moodie: It speaks to the minor differences between existing drugs and the currently newer drugs that are appearing. I’d like an answer to that. Can I receive it in writing, please?
Mr. Keon: Sure. We can respond to that.
Senator Moodie: The other question is for the IMC. You stated that a single-payer, first-dollar system would reduce existing coverage for most Canadians. However, according to the 2021 Survey on Access to Health Care and Pharmaceuticals During the Pandemic, or SAHCPDP, over 21% Canadians reported not having insurance coverage for any type of prescription medications.
Choosing between the status quo wherein Canadians face a multitiered system — where some have good access, some moderate and some none — and the system that Bill C-64 would create, can both of you share with me which you would prefer to see? Does this bill, as it stands today, bring us somewhere that is better than the status quo? This is for the broader public, for people that I mentioned, the 21%.
Ms. Hamelin: IMC is supportive of Canadians having access to the medicines they need when they need them. There is a cost associated with it. We also observe that Canada has a system in which 97% of Canadians have access to either an employer‑based plan or a public drug plan through the provinces, so this system actually works quite well.
For the 3% of Canadians who do not have any coverage — and there are also perhaps some who are underinsured — we suggest that the government really focus on those individuals who really need help, because they don’t have access to the medicines they need.
But there is a system in place that actually works quite well. Why fix it when it’s not broken?
Senator Moodie: I’d like you to comment, please, from Innovative Medicines Canada, or IMC. Do your members have a financial interest in suggesting the amendments you have presented? How much money does your industry stand to lose if this bill passes unamended?
Ms. Hamelin: In terms of numbers, maybe, Declan, you can help me. What is clear is that in the industry, our members are based on innovation. They want to bring new, innovative medicines to Canada so we have options to treat patients so that they receive the medicines that work for them.
Senator Moodie: Can we get the numbers?
Ms. Hamelin: We can provide —
Declan Hamill, Vice-President, Policy, Regulatory, and Legal Affairs, Innovative Medicines Canada: We don’t have such numbers, to be clear, because the full implications of the bill can’t be assessed at this time.
[Translation]
Senator Mégie: I’d like to thank the witnesses for being with us. My first question is for Ms. Hamelin. I see there is a lot of concern about innovative medicines. Should we start with diabetes drugs or contraceptives? Where do you think innovative medicines should be placed on these lists? Innovative medicines will be used one day, but we have to start somewhere. Why are you so reluctant? We will get there eventually. The company may see its revenue postponed, but give me more arguments to explain.
Ms. Hamelin: Here’s the concern: It’s the lack of predictability as to when these innovative medicines will be listed on formularies. Already, the delays in importing these medicines into Canada — and the fact that there are delays in listing them on formularies — are twice as long as anywhere else in the world or even in other countries comparable to ours. When it comes to delays, we’re the last of the G7 countries to list innovative medicines on our formularies.
A bill that proposes to start this way and says it will come. When will it come? Can we ask the industry to continue innovating and investing in discoveries when we don’t know what the future holds? That’s the concern about the delay, which is already too long. Is it going to get even longer? That’s a concern. In Canada, we have an ecosystem conducive to the discovery and development of medicines, but we lack opportunities. This creates a great deal of concern. The bill doesn’t address this at all. We can’t expect industry to wait; that creates viability issues in Canada.
Senator Mégie: My second question is for Mr. Keon. You talked about gaps in the list of medications. Do you already have the list? I don’t think it’s been drawn up yet. Do you already have it?
Mr. Keon: Yes. The list is public. The minister released the list of medications.
Senator Mégie: You saw that certain medications weren’t listed and that worries you?
[English]
Jody Cox, Vice-President, Federal and International Affairs, Canadian Generic Pharmaceutical Association: My apologies for the English response. There are two different things. There is the agreement that was reached on February 29 that included a list of drugs. That’s what Jim was speaking to. In terms of the formulary, we have no idea, because that’s referenced in the bill. There are processes that will happen afterwards, and there is a lot of discretion on the part of the minister that comes from that. So there is a lot of uncertainty around what therapeutic areas, what products and then how this bulk purchasing piece fits in as well.
It’s interesting because it’s not quite clear what that means, because who is buying the drugs? In Canada, it’s actually the pharmacies that are buying the drugs.
Senator Bernard: Thank you all for being here. Actually, I’m going to ask a question of Mr. Keon, following my colleague Senator Seidman’s question, which you weren’t able to fully answer. So just to take us back, you were talking about the impact on prescribing and said that some drugs may not be prescribed. I’d like to hear your answer to the question, which you didn’t have time to answer before: What happens to the diabetic patient who is not able to get access to medicines that are not on the list? I’d like to add to that and build on it. In particular, I’m interested in what the impact will be on those who are seeking culturally safe access to their medications.
Mr. Keon: Under Bill C-64, some diabetes medications will be — assuming there are agreements with the provinces — fully reimbursed, first-dollar payment, no cost whatsoever to the patients. Other medications will not be. Then you would have to determine if that patient is a senior. In most provinces, they might have some coverage for most of the medications under the provincial plans. Is that patient gainfully employed with a good job? If so, he or she may have coverage under their private insurance. But if they’re a younger patient not covered by insurance, they will be having to pay, and it will be expensive for them.
The point we’re making is that you’re introducing, in Bill C-64, a new coverage into the ecosystem that works in a complicated but good way now, and the impact is unclear, whether having some drugs better covered than others is going to change prescribing practices from what is clinically the best prescription for that patient.
Senator Bernard: What will that mean for physicians who have to make decisions about prescribing? I am thinking about those persons with diabetes who don’t have coverage. That’s the population that I want to get you to talk about.
What happens with physicians, then, who have to make a decision about what to prescribe if it’s not on that federal list?
Mr. Keon: If there is this new list of medications, I think they will go to that list first and look at whether those medications can be prescribed for that patient whether or not they believe that’s the best medication, and that’s the point we’ve raised. These medications are available, they’re covered under a variety of public and private plans and patients have access to them, but if you change the system, we believe that these plans are going to stop covering those drugs with unfortunate consequences.
Senator Bernard: Thank you.
Senator Burey: Thank you so much for being here. I want to ensure that I understand, Ms. Hamelin, your comment about that 3%, and that 97% of Canadians are covered. I believe we heard testimony from Mr. Eddy Nason, Director of Health, from the Conference Board of Canada report, and we also had as a witness Mr. Barry-Shaw from The Council of Canadians. They were saying that 3% is just a figure that’s been thrown out there and that we actually have a lot more people who can’t afford their drugs, whether or not it is because they are completely uninsured or they just don’t have enough money for the co-pay.
It was a higher number. I can’t remember, but it is over 20%, so it’s a large number. Would you care to comment on that in light of your testimony?
Ms. Hamelin: The 97% number comes from a study from the Conference Board of Canada. That’s based on extensive data from various public sources, including Statistics Canada, the Canada Revenue Agency, provincial reports and so on, and also data from the Canadian Life and Health Insurance Association, or CLHIA, on the private payer coverage. This data is based on the report from the Conference Board of Canada.
Senator Burey: Mr. Nason commented on that and said that was just an absolute floor, but the real people who cannot afford medication, whether it be that they’re underinsured, they would go without food, couldn’t pay their rent and so on was a much higher amount. It was in the body of that report, but I keep wondering why we keep saying it’s only 3% if it’s a much larger number.
Ms. Hamelin: It’s a published report. It’s another argument for why we should take care of those individuals who don’t have coverage with the funding that is available for providing medicines to patients. The report is a published report.
Senator Burey: Do you agree the number is much larger than 3% of the people who can’t order it? Not really? All right.
Ms. Hamelin: I can only rely on the data. There are other reports from Statistics Canada. I did not hear the other individual’s testimony here.
Senator Burey: He was here from the Conference Board of Canada.
Mr. Hamill: That is the eligibility for coverage, based on that 97%. There are a number of Canadians who have less adequate coverage; that’s certainly the case. In addition to that, there are Canadians who don’t avail themselves of coverage that they’re eligible for, and that was also in the report.
I think the point is that even if the number is not 3% — let’s say it’s 6% — it’s still more efficient and effective to fill gaps in a system rather than rebuilding a system.
Senator Burey: Thank you.
Senator Dasko: I’d like to pursue these arguments with respect to federal funding. You’re all critics of the bill. I would like to understand what role, if any, you see for the federal government in providing benefits to Canadians on an individual level, as opposed to funding research and innovation, for example.
You’ve talked about all kinds of gaps in the system as it exists now, not just the fact that some people aren’t covered at all. There are other gaps, in co-pays and many other parts of the system. So I want to ask all witnesses this question: Is there a role for federal funding of prescription or other medicines, and if so, what is it? What should it be?
Jody Cox, Vice-President, Federal and International Affairs, Canadian Generic Pharmaceutical Association: Maybe I will kick things off by saying that we do live in a federation. Health care delivery is a provincial and territorial jurisdiction in this country. I think it all starts with a conversation. Between the federal and provincial governments, we’re seeing that, for example, in the rare disease space, where there is some good work happening and some more agreements probably coming, so that would be one area I would mention off the top.
Senator Dasko: We all know there is federal funding of health care even though it’s a provincial jurisdiction. We have it through the spending power of the federal government, which essentially has money to fund various health programs with the provinces and other programs as well. So there is a federal role that takes many forms.
Mr. Keon: We did recommend greater federal government intervention with respect to necessary medicines that are in shortage — drug shortages. During the pandemic, the federal government established a program to purchase medicines. It was very limited. It was just 12 medicines that were needed for patients in hospitals, et cetera. They put a program in place. They put out a call for medications. Companies responded, the federal government purchased the medicines and the system worked quite well.
We think there’s an ongoing role, for critical medicines that might be at risk of drug shortages, for the federal government to actually step in and purchase and try to ensure a continuity. That’s something that we are continuing to encourage the federal government to do in terms of a role that it could play in directly purchasing medicines.
Ms. Hamelin: There’s a role for the federal government in the treatment of rare diseases, and there’s actually a rare disease program and funding available from the federal government to support rare disease treatments. I think we’re still waiting for that program to roll out, but there’s certainly a role there.
The other role is to help provinces fill various gaps that exist. A really good example is how the federal government worked with Prince Edward Island to help them fill gaps in their medical formulary. In specific areas where provinces have gaps and need support, there’s certainly a role for the federal government.
Senator Dasko: I would like to cede my time left to Senator Pate. I don’t think her question was answered from before.
Senator Petitclerc: Thank you for being here. Thank you to my colleagues from the medical sector. It’s been very helpful to hear your questions and answers.
I only have one short question on the list. My understanding is the list is published. Things can be added, like medicines. I understand you see challenges in the process; I get that. I also understand that the list doesn’t cover every single thing that exists.
My question is this: Is there analysis or data suggesting that what is on the list now will not be optimal for health outcomes? My question is patient- or client-oriented. With respect to health outcomes, do we have data saying that what is now on those lists is not optimal?
Ms. Hamelin: What is on the list is less than what is currently covered by public or private plans. That should be an indication of the optionality that is needed for appropriate treatment.
The bill also talks about appropriate treatment and appropriate use of medicines. I would suggest that the most appropriate use of medicine is to identify the medicine that a patient needs for their particular condition.
In terms of health outcomes, data on the portfolio of drugs versus what is on that specific portfolio of drugs, I think a study would need to be done to demonstrate that, but just an indication that it’s many fewer drugs.
The concern is also that the diabetes field is really evolving. This is a very dynamic field where we can treat diabetes and obesity, and those drugs are not on the list. How long would it take to get them on that list? We have to think about biologics and the unpredictability on when that list might be expanded. The impact of that on the supply chain is significant because these medicines are produced in manufacturing sites that are really busy. When is Canada going to be in line to produce the drugs for Canadians? Predictability is absolutely critical.
Mr. Keon: I would reinforce that provincial governments have been running formularies for decades. They have experts advising them on which drugs should be covered. The list for diabetes is much broader than the list that came out with Bill C-64. I think that’s another strong indication.
The other point we’ve made is that Diabetes Canada is concerned as well with the list of medication in that it’s too narrow and doesn’t cover in the same way many of the medications that patients are now taking.
We don’t have a good explanation on how the list was created, but there are a lot of concerns about going forward with that list with this type of agreement.
Senator Senior: My question is to IMC regarding your recommendation number 4 recommending that stakeholders or consultants have representation on the expert committee. Consultation I get, because I understand that’s one of the things that is talked about. But I’m quite surprised that the pharmaceutical industry, or your particular concern as a stakeholder, would want to be on the expert committee. Do you see a conflict of interest with respect to that?
Ms. Hamelin: This is a policy that impacts the industry that we represent as a whole, and I think that interested parties, of which we are a key one, should be part of the conversation about how a bill is formulated.
Senator Senior: I’m talking specifically about being on the expert committee and not necessarily consultation.
Ms. Hamelin: Everybody on that expert committee has a conflict of interest. Why would the industry have a bigger conflict of interest than any other interested parties?
Senator Senior: That’s a question I would probably pose back to you.
Ms. Hamelin: If you are asking me the question, I don’t think so.
The Chair: Thank you. Colleagues, we will go to second round.
Senator Osler: May I read my question into the record, ask for a written response and cede my time to Senator Pate? Thank you.
We all share the same goal of better health for Canadians. How could the pharmaceutical industry collaborate with governments to ensure the agreed upon list of essential medications is provided to a national pharmacare program at the lowest possible cost?
Senator Pate: The government has been clear, in line with the Hoskins report and the analysis of experts like Dr. Morgan and others, that the aim of the formulary should not be to cover everything but should look for medicines of proven value and efficacy and that will provide significant coverage. I’d like to hear if you have evidence — and if so, for you to provide it to the committee — if that isn’t what has been picked.
Second, picking up on Senator Moodie’s point, for medicines not available free of cost, people would still be able to rely on existing provincial, territorial or private plan coverage that they have. No one will be left worse off, and many will benefit from new free access to drugs. I’d like you to each please clarify where you see risks of people facing administrative burdens, losing access to medicines they currently use or any other issues that you anticipate.
Just before that, my wonderful assistant Emily — and she is not just an assistant, but an amazing policy director in our office — found the report I think you’re referring to. It still shows that it was generic medications that had significant cost savings but doesn’t talk about any of the confidential rebates that drug companies provide to buyers. Is any of that material available? I know that’s an ongoing issue on pricing as well.
Mr. Keon: On pricing, our prices are negotiated with the pCPA. These are experts from the provinces. We negotiated with Quebec, Ontario, B.C., the experts who run the drug programs. They know our medications. We sat down; it took 18 months. We had in-depth discussions with them. It is an agreement we have that covers all generic medications dispensed for every Canadian in Canada.
It is intended to provide massive savings to the provinces — it did and I mentioned $4 billion over the last 10 years — and a sustainable industry that can continue to make these products. We have had record discontinuances of medicines because companies are losing money on them. The prices are very low. They cannot go lower or we’re going to face more drug shortages. I tried to make that point.
How do we make the list as affordable as possible? We maximize usage of generic and biosimilar medicines. Wherever they’re available, that’s what should be reimbursed, because they’re off patent. The patents have been enjoyed by the originator companies, and now people should take advantage of that.
You mentioned the Hoskins report. Those were his recommendations as well, so that’s something we strongly recommend. It wasn’t specifically laid out in the bill, but in all the agreements that the federal government may have, we would recommend that be a guiding principle.
Senator Moodie: My question is directed at an acknowledgement I’m asking for on your part. pCPA does include the federal government, the military and the NIHB as part of their collection of individuals that support this organization. You’re aware of that, correct? Okay, so it’s not just provincial experts. It has a pull from federal as well as military.
I also wanted to ask you about the question of security of the supply chain. There is a lot of that being spoken about, and in past testimony we’ve been hearing that there are ways that pharmaceutical companies reach a deal with the government — and other governments have done this in other countries — and are asked to write into this contract that they will be responsible for any shortage, cut or lack of accessibility, and will bear the financial cost of this interruption. That has been done in some countries. There are examples, and we definitely can share what those are. The fact of the matter is that global security and supply chains have become an increasing focus here in Canada.
Why wouldn’t that be possible here, and why couldn’t we have this in a future pharmacare that is trying to ensure the supply for Canadians?
Mr. Keon: For your generic medicines and biosimilar medicines, when you go short, you do pay the difference, whether it’s a hospital contract or your agreement with a pharmacy chain. You are required to cover that.
I think the point we’re trying to make is that we should not have a race to the bottom and then expect that there will be funds available to take care of shortages. We are in a global supply chain. There are shortages around the world. When Canadian companies or Canadian headquarters are trying to bring in medicines, the prices are too low in Canada. It’s very difficult to get any attention for that.
The Chair: Thank you very much, Mr. Keon. Colleagues, we have come to the end of this panel. Ms. Cox, Ms. Hamelin, Mr. Keon and Mr. Hamill, thank you very much for being with us today, and sharing your perspectives.
I would like to welcome Stephen Frank, President and Chief Executive Officer, Canadian Life and Health Insurance Association; from the Canadian Chamber of Commerce, Liam MacDonald, Director, Policy and Government Relations, and Kathy Megyery, Senior Vice-President and General Manager, Quebec; and from the Canadian Labour Congress, Siobhán Vipond, Executive Vice-President; and Elizabeth Kwan, Senior Researcher.
Some of the witnesses are sitting behind us because we have limited space at the table; they will be called on to come to the table. Thank you for joining us.
We will begin with opening statements from Mr. Frank, followed by Ms. Megyery and Ms. Vipond.
The representatives from the Canadian Life and Health Insurance Association, the Canadian Chamber of Commerce and the Canadian Labour Congress will each have five minutes.
Stephen Frank, President and Chief Executive Officer, Canadian Life and Health Insurance Association: Thank you. It’s a pleasure to be here.
[Translation]
Perhaps it’s fitting that I’m one of the last speakers you will hear from as part of your due diligence on Bill C-64, because all the comments heard over the last few days reinforce a point my organization has been making for several months now. There are too many outstanding questions that need to be answered.
[English]
There are too many open questions that must be answered before this bill moves forward. Whether you believe Bill C-64 goes too far or not far enough, it’s simply not ready. Passing this bill as is will result in enormous risks, costs and uncertainty regarding access to medications for a large majority of Canadians.
An important part of my job is representing the 27 million Canadians who are covered by workplace and other health benefit plans. The vast majority of them are unionized front-line workers, serving us our morning coffees, changing our tires or caring for our loved ones in long-term care homes or hospital settings. They rely on their benefits to keep their families healthy and cannot afford risky political games.
Previously, the Minister of Health testified that people who have an existing drug plan are going to continue to enjoy access to their drugs and even stated that concerns that Bill C-64 would eliminate private coverage amounted to misinformation. However, just this week, to members of this committee, the minister wrote that Canada’s pharmacare plan would be paid for and administered exclusively through a public plan rather than through a mix of public and private payers. Given the minister’s latest interpretation of Bill C-64 to this committee, the bill will result in practical and legal barriers to our ability to provide Canadians with the drug benefits they currently have in value. It also presents a real risk of incentivizing employers to pull back on their coverage of medications for their employees.
For the majority of Canadians, this legislation as it is currently written will eliminate existing prescription drug coverage paid for by employers for these medications. It will limit choice, use scarce federal dollars to replace existing coverage and leave a huge gap of uninsured Canadians who rely on other medications beyond diabetes drugs and contraceptives.
I urge you to take a moment to truly consider what this proposal will mean for the average Canadian family at a time when we know affordability and access to health care are issues that are keeping them up at night.
[Translation]
Canada’s life and health insurers believe that all Canadians should have access to their prescribed medications. To achieve this, we know that both private and public plans are needed. Bill C-64 jeopardizes what works well today and risks creating more gaps than it closes.
[English]
When asked, 85% of Canadians say their health care plan saves them money. They don’t want that disrupted. If given the choice, they would overwhelmingly prefer to see the government focus on providing coverage for Canadians who don’t have it. That is the better way forward.
In conclusion, we believe this legislation is flawed and needs amendments to protect workplace benefit plans for the 27 million working Canadians who rely on their benefits daily to keep them and their families healthy. Thank you, and I look forward to your questions.
The Chair: Thank you very much, Mr. Frank. Ms. Megyery?
[Translation]
Kathy Megyery, Senior Vice-President and General Manager, Quebec, Canadian Chamber of Commerce: Madam Chair, honourable senators, on behalf of the Canadian Chamber of Commerce, we thank you for the opportunity to discuss Bill C-64. Why is this bill important to the Canadian Chamber of Commerce and its 220,000 members, businesses of all sectors and sizes across Canada?
Businesses routinely provide their employees with a benefits package. While these employer-sponsored benefit plans are not mandatory, approximately 80% of businesses offer a benefits package to attract and retain employees.
Therefore, benefit programs, including drug coverage, aren’t just essential for attracting talent. They represent an important investment in employee health and productivity. Absenteeism or poor performance due to health problems are a major concern for employers because of their negative impact on business competitiveness.
[English]
With that preamble, allow us to share some comments and concerns. First, the chamber firmly believes that all Canadians should have equitable access to prescription drug coverage. To best understand what is required to achieve this, let us begin by scoping the problem. The Conference Board of Canada found that 97% of the population is eligible for prescription drug coverage. The number of people not eligible for a public plan and not enrolled in a private plan is under 1 million people.
Further, 3.8 million Canadians are eligible but not enrolled in a private or public plan as a result of lack of awareness of the programs or unaffordable out-of-pocket costs. That is the problem we need to solve in order to ensure that Canadians who are not insured or not properly insured have access to the medications they need with a pragmatic and fiscally responsible solution. A universal single-payer system is neither.
Let’s look at the cost. For the first phase to cover contraceptives and diabetes medication and devices, the Parliamentary Budget Officer, or PBO, set the cost at $5.7 billion over five years. The PBO assumes that workplace benefit plan coverage would not be impacted by Bill C-64. That is not what the bill states. If that were the case, the cost of Bill C-64 would be offset dramatically but would still rise to almost $1.9 billion over five years. This brings us to the issue of pragmatism.
There is no need to completely undo a system that provides a majority of Canadians with the coverage they need and appreciate. A universal single-payer pharmacare would actually leave most Canadians worse off. Currently, the majority of Canadians are covered through their employers. These Canadians have access to medicines in half the time as those on public plans and to three times more new, innovative drugs approved by Health Canada.
In 2023, Ottawa announced the Canadian Dental Care Plan, stating that the plan is not intended to replace existing dental benefits offered through employer-sponsored programs but rather to fill existing gaps in coverage.
Minister of Health Mark Holland has stated that the federal pharmacare program would not jeopardize Canadians’ private coverage, but the bill repeatedly references a national, universal, single-payer system.
This bill should be amended to ensure pharmacare targets those Canadians who do not have the coverage they require, just as the government did with the Canadian Dental Care Plan. Such a targeted model would be more pragmatic and financially sustainable and would better respect provincial and territorial jurisdiction.
Thank you.
The Chair: Thank you.
Ms. Vipond?
Siobhán Vipond, Executive Vice-President, Canadian Labour Congress: Thank you, chair, and hello to the committee members. It’s an honour to be here with you today on the unceded territory of the Algonquin Anishinaabe people.
The Canadian Labour Congress represents over 3 million workers in virtually all sectors, industries, occupations and regions of the country, including hundreds of thousands of workers in our health care system and half a million retirees.
We represent workers who are fully covered for prescription drugs and many with partial or no coverage at all. Senators, Bill C-64 is the most significant enhancement to our health care system since the introduction of public health care in Canada. We urge you to pass this legislation swiftly without amendments, so millions of Canadians can access contraception and diabetes drugs and devices, live healthier lives and gain some relief from the high cost of living.
The importance and urgency of passing this legislation can’t be overstated. Today, 7.5 million people in Canada have no prescription drug insurance and pay out of pocket for their prescription medications. At a time when so many people are struggling with day-to-day costs, Canadians managing their diabetes are paying $10,000 to $18,000 a year to stay healthy, and women of reproductive age and those who are gender diverse are paying $240 a year for oral contraception and $500 for an intrauterine device, or IUD.
Because of our patchwork prescription drug system, nearly 1 million Canadians are sacrificing basic necessities like food and heating in order to pay for medications. Another 1 million Canadians are borrowing money in order to pay for their medication. Not having access to affordable drugs results in premature death, terrible suffering, illness and complications or poor quality of life. Passing Bill C-64 without amendments will put contraception and diabetes drugs and devices in the hands of millions of Canadians, keeping them healthy and helping them with their daily living costs.
However, I want to be clear: This legislation is only a first step toward building a universal, single-payer, public pharmacare program that will provide equitable access to medication and equitable health outcomes from coast to coast to coast. In fact, the Canadian Labour Congress, or CLC, recommends the federal government commit to the expansion of Bill C-64 after the act receives Royal Assent, to a full national, single‑payer pharmacare program with first-dollar coverage for a comprehensive list of prescription drugs based on both how well they work and whether they offer good value for money.
One of the most critical pieces of Bill C-64 is the committee of experts, and we urge the government to exercise due diligence in the selection of the members of the committee of experts. We must ensure there is no conflict of interest that could influence their work in making recommendations of public benefit when it comes to the operation and financing of national, universal, single-payer pharmacare.
The committee of experts’ work is too important, and the common practice of signing disclosure-of-conflict forms is not a sufficient safeguard. Senators, many opponents of Bill C-64 who have direct or indirect profit motives related to insurance and pharmaceutical companies want a fill-in-the-gap model of pharmacare, especially the Quebec or Prince Edward Island models.
The private drug insurance model is based on the ability to pay through out-of-pocket costs from individuals and is mainly tied to employer-sponsored drug coverage. None of these three options create equity, and none of them will keep us, our families and our neighbours healthy and able to fully participate in our communities and reach our full potential.
The plan to achieving a universal, single-payer, public pharmacare is in the final report of the Advisory Council on the Implementation of National Pharmacare. Bill C-64 may not be perfect, but it’s a good step forward. We need Bill C-64 now, and then the work will begin to achieve full universal, public pharmacare.
We can’t let the perfect be the enemy of good. Any amendments to this legislation will significantly increase the risk that no pharmacare legislation gets passed at all, and that’s why we’re urging that you pass Bill C-64 swiftly without amendments.
Thank you, and I look forward to questions.
The Chair: Thank you, Ms. Vipond.
We will go to questions. Colleagues, you will have four minutes each for your question and answer.
Senator Seidman: Thank you very much for your presentations here with us today. My question will be for Mr. Frank of the Canadian Life and Health Insurance Association.
Mr. Frank, you submitted a brief, and you have some very interesting tables included in your brief. What I’d like to do, if I might, is turn to page 6, Table 2, and ask you if you could help us understand exactly what that table means.
That table is entitled:
Analysis of Total Costs Covered by Workplace Benefit Plans for Diabetes Medications, Diabetes Devices/Supplies, and Contraceptives On and Not on the Federal List.
Mr. Frank: I’m looking at the correct table, and there are two of them. One we do by the number of claimants, and the other is by cost.
Senator Seidman: “Analysis of Total Costs Covered . . .” but yes.
Mr. Frank: We looked at the total amounts that we reimbursed for diabetes and contraceptives in Canada today by province, and we compared that against what the total reimbursed amounts would be if we were only paying for the list of medications that the government put forward when they put Bill C-64 forward, and that delta is what we were trying to highlight there.
You can see from the table that the gap is about $2.3 billion. If you look at the number of claimants, equally, you can look at the number of Canadians who are getting drugs reimbursed today on a plan. Compare that to what would be covered under the list that the federal government has promoted and you will see that there are 4 million Canadians who today are on medications that would not be covered under that new program.
That delta is alarming, and it is a reality that we need to grapple with.
We do not believe that moving to this program is going to close gaps; we think it’s going to create gaps, and we have, at a minimum, questions about what those 4 million Canadians are going to do.
We went through this once with OHIP+. We know what happens when we move people from their private coverage to public coverage. You’re having to communicate and try to manage that. It’s a very difficult process and very uncertain, and we’re quite concerned that you end up creating more problems than you’re going to solve.
Again, just to go back to the main thesis of our proposal, and I think you heard the same from some of the others today: The better approach is to target our intervention where it’s needed and to allow people to retain what is working extremely well for them today. For the vast majority of Canadians — the vast majority — they’re getting excellent coverage under the current system.
Senator Seidman: Thank you. That’s helpful.
If I look at the table, the last column, “Diabetes Medications” —
Mr. Frank: Go ahead. I have to make sure I’m looking at the same thing.
Senator Seidman: It is “% Not On Federal List.” I can bring you the table. Would you like me to give you the table?
Mr. Frank: I have two tables here. Let me know the number there.
Senator Seidman: It’s Table 2 in your submission to us. The top line is, “Diabetes Medications,” “Total Cost,” $1.6 billion. “Costs ON Federal List,” $252 million. “Costs NOT ON Federal List,” $1.4 billion. And the “% Not On Federal List” is 85%.
Mr. Frank: Correct. The list that was put forward is a very, very small list.
Senator Seidman: And that list was included as an annex to the legislation.
Mr. Frank: Yes, to the legislation that came out. If you add together the contraceptives and diabetes medications, you’re looking at about a third of what’s currently available to Canadians today. That’s sort of what is at stake here. We’re going to go from, if you think of it in round numbers, 100 medications available for Canadians to 30. We have to have confidence that this will result in a better outcome. I think that’s an uncertain proposition. It is hugely risky to go down that path. And again, if we want to close the gaps and help people who need help — and we all agree with that as an outcome — we can target our intervention for those who need it.
Senator Osler: Thank you to the witnesses for being here. My question is for the Canadian Life and Health Insurance Association. We have heard concerns with Bill C-64 and this first phase of national pharmacare that Canadians with private insurance plans might lose their coverage for diabetes medications and contraception. You quoted the Minister of Health, and he said that:
Under this program, the cost of these medications will be paid for and administered through the public plan, rather than through a mix of public and private payers.
Your brief points out that Bill C-64 does not expressly prohibit Canadians from purchasing supplementary drug benefit plans or insurers from offering such plans. There is nothing in Bill C-64 that legislates private insurers to maintain coverage for diabetes medications and contraception.
So the minister is on record stating that people will not lose their private insurance coverage for these classes, but, ultimately, it’s the insurers who will determine what is covered and what is not.
Has your association or have insurers had discussions or come to agreements with the federal government to guarantee private insurers will not take away coverage for diabetes medications and contraception if national pharmacare is in place?
Mr. Frank: Thank you for the question. I appreciate the opportunity to clarify.
The insurers do not make those decisions. Employers make those decisions. I can tell you that as of today, we are getting questions from employers asking whether they should drop these drugs. It’s already happening. We are getting calls from advisers saying: “Help us as to how we’re supposed to have these conversations.”
I’ll give you an example of how this will play out: You are a manufacturer, a small employer in Kingston or Kelowna, and you manufacture tires. You’ve got 200 or 300 employees, and they have drug benefits. You pick up the paper and you see that the federal government has now said they are going to cover diabetes drugs for free. You’re going to say to yourself, “Great. I don’t need to do that anymore.” That’s the conversation we’re having with tens of thousands of employers. They are looking at whether they should continue to provide coverage.
This is a real risk. We’ve been down this road before. Employers will pull back. We will do everything we can to explain to them that this program is small, narrow and only covers a third of what they are assisting people in getting. We will explain to them it’s a bad outcome for their employees. We’ll explain to them the risks. But many employers will make the determination that if there is a free government program and the Minister of Health has said we’re covering diabetes drugs for people, they don’t need to do that anymore. We’ve already started to embark on that path.
It’s very risky, and we’re putting a lot on the line with this bill. Again, I’ll go back to the better way to fix the gaps that exist: Target our interventions where they’re needed and leave what’s working well for Canadians going forward. I want to stress this: Don’t discount the risk that people are potentially going to lose as much as they’re going to gain through this legislation. We’re already having those discussions.
The Chair: Is it the experience in Canada that when governments step in, employers pull out? We’ve heard, I believe, witness testimony or a question here about what happens in other jurisdictions where pharmacare is rolled out. Have employers and insurance agents pulled out or simply used the room to cover other drugs?
Mr. Frank: If you’re a medium-sized employer who is struggling to get by, and you’re told that there is a free program that you don’t need to contribute to anymore, that’s what you will do. I think it’s a very risky proposition to assume that you’re going to negotiate or get that employer to reinvest that into their benefit plan. That is not our experience. It could happen in some instances, but that’s a risk you must be prepared to take. I would ask the committee to think hard about why you would want to open that door.
If you want to close the gaps that exist in Canada, let’s do that. Everybody agrees with the outcome we’re trying to achieve here. We have a fundamentally different view on how best to get there. There are a lot of risks to introducing an unproven single‑payer model.
This legislation is two pages long. We have more questions about how it will work than we do answers at this stage. It’s just not ready. It needs more thought and needs to be done carefully and well so we’re not disrupting what works for people.
Ms. Vipond: In terms of employers’ approach, I think phoning an insurer to find out if they’re going to save money on their plan and employers are going to make a decision of what to do with that money savings, that’s why we always want unionization because many joint trustee plans will look at other places to spend the money. It is also the argument for why we should expand this: There are savings to be had for employers when they are not taking on the cost of covering medications that people should have access to.
Senator Moodie: Thank you to the witnesses today. I want to continue to drill a little bit deeper because we’ve been hearing something quite different from small businesses, which is that they see this as an opportunity to perhaps save some money on their plans but also to renegotiate what is covered.
Critics of the bill have raised the question of what insurance companies will do, but I want to focus more on what unions will do. People, businesses and unions negotiate plans. What will your response be to this bill? If insurance companies change their coverage based on this bill, what would be your response? Is this an opportunity to negotiate better coverage for your members for other classes of medications not covered by Bill C-64? Is that what you would set about doing?
Ms. Vipond: Absolutely. I think the point of health care spend in an employment situation is to do best for employees. If there are savings for employers because of these classes of drugs and devices being covered, then absolutely it will be where to best utilize that money. I have full confidence that the insurance companies will find a way to sell insurance that fills the gap of what they think is not there or available until we grow this program.
But the ability to look at people’s health and it not be just a financial opportunity or a financial cost means that we can talk about expanding all of those other things. We hear from members constantly. Whether it’s because there is a ceiling of how much their plan covers or there are exceptions to what their plan covers, it’s a cost. Then members aren’t having discussions about their medical needs; they’re having discussions about their financial constraints and being able to get the medications they need.
That’s why it is so important to get these two classes started. We can see how it’s working and then grow it, because there is a lot of evidence around the globe that this will be a success.
Senator Moodie: Ms. Megyery, you represent the Canadian Chamber of Commerce. Are there health insurance companies that are part of it? Full disclosure: So there are small businesses and medium-sized business, but are there also insurers.
Ms. Megyery: Yes.
Senator Moodie: Thank you. The question I’d follow up with is this: Why would you take the position that expounds protection of health insurers and not small businesses?
Ms. Megyery: For the reasons that I outlined. For businesses, spending on the health and wealth of their employees and their productivity is an investment. Having an employee that is off on disability or sick leave is a huge cost. It’s a huge cost to replace that person or to find a way to substitute.
So in many cases, for employers, as I mentioned in my remarks, these programs are ways of attracting and retaining employees but also ensuring that they’re healthy and productive, which contributes to a business’s productivity.
Senator Pate: I have a question for the Canadian Labour Congress and then for the Canadian Life and Health Insurance Association.
First, polling commissioned by the Canadian Health Coalition this summer revealed that a majority of voters in every province and territory supports pharmacare, with 8 in 10 in favour of their premiers working with the federal government on a national program.
Labour groups in Quebec have joined with civil society to support Bill C-64, despite what we’re hearing about concerns in Quebec, as a first step toward national, universal, single-payer pharmacare.
If you can, I would like you to elaborate on the support among voters in the provinces and the reasons for it, and also whether you would say the situation is similar in all provinces and territories. Then, for the Canadian Life and Health Insurance Association, 85% of employers say they would like to use savings from a single-payer pharmacare system to expand other health benefits for employees. My question to you is as follows: What steps is your organization planning to take to respond and support employers, so that they have opportunities to invest these potential savings if and when Bill C-64 becomes law? For example, in addition to covering diabetes or contraceptive medications that are not covered by federal or additional coverage of other medications, these could be taken as a next step in terms of adding additional drugs and moving toward the single-payer system that is anticipated by Bill C-64.
First, Ms. Vipond, and then Mr. Frank.
Ms. Vipond: Thank you for the question. Yes, we saw all the polling in terms of where folks are. One of the proudest things we have in Canada in terms of our public infrastructure is our health care system, and it’s only when folks have to go through that they learn the limitations of that system, and one of them is a lack of access to pharmaceutical drugs unless you have extra coverage. Not only do we see the polling, but we hear people’s stories; I’m fortunate that I am able to talk to people often. They say, “Oh, this would solve so many problems for me.” The money they’re spending will be spent somewhere else. They won’t be making decisions around the cost, and that is extremely important. It also means that we’re taking care of each other, and I think we fundamentally believe that that’s a good thing to do.
This discussion is important. And it is important to look at how this legislation ought to be implemented and how it is going to be looked at. It’s a very important step, but the longer we delay, the more a significant number of people are waiting. To them, their health is important. It’s their priority, and they need to get the drugs in their hands in a way that they can afford and access them. That’s why we’re saying that this is a very good step, and people are excited and are waiting for it. That’s why we’re trying to get this ball rolling.
Mr. Frank: Thank you for the question. I would like to address the polling, because it is quite interesting. If you ask the question of whether Canadians support pharmacare, they’ll say yes. If you say, “Do you support it if you mean you’re going to lose your private coverage?” they overwhelmingly say no. That support collapses completely. Once Canadians understand the trade-offs of what’s being asked, there is no support for single‑payer. That’s clear, and we’re happy to provide copious amounts of support for that.
With respect to employers providing more than they do today, the typical plan in Canada covers 13,000 medications today. The most generous public plan in the country covers 8,000. We already cover everything.
There are 27 million Canadians who already have excellent coverage. They overwhelmingly like it; they do not want it put at risk. This legislation puts it at risk. We need to be honest with them about that. We need to be honest with ourselves about that.
There are a lot of questions in this bill that we cannot answer. It’s simply not ready. It needs to be further reviewed. It’s been rushed. You cannot read this legislation and understand the implications of it.
Senator LaBoucane-Benson: I come from the not-for-profit sector, and there are thousands of not-for-profit organizations. I sat at the table negotiating with our insurance companies regarding the drugs that were on the list. It was an Indigenous organization, so diabetes was a particularly big issue.
I have a hard time with the way you’ve framed the argument because I know that we go through that list drug by drug. They negotiate the drugs that are available.
If I were still at that table and these drugs became free via single-payer, we would try to make other drugs available to our people because we are constantly hearing from folks about things that are not covered. These insurance programs are very expensive. They’re not free. The not-for-profit organization is paying for them, and then the employee pays for them. Often, employees feel they don’t get value for it because their particular drug is not covered.
Do you have any evidence to show us that, in fact, people wouldn’t just negotiate other diabetes drugs? No one would believe that all diabetes drugs are covered. We would look at the list and say, “That’s fantastic. That’s now covered. We want this on our plan; what will that cost?” It seems to me that intelligent Canadians who are in charge of these plans would sit down and negotiate. What evidence do you have that wouldn’t happen?
Mr. Frank: You’re describing a large organization that has the resources to do that kind of analysis. There are 120,000 employers in Canada that offer benefits. The vast majority are very small. They might have 50 or 100 employees. They are not going through a formulary; they are not reviewing drugs, and they are not sitting with their employer negotiating. They’re taking a package that’s offered. When they hear that there is a new federal program that’s going to cover diabetes medications for all Canadians, what they think is, “I don’t have to do that anymore.” We are having those discussions today. They will not have the sophistication to go through that.
It’s in our interest to keep them in the game. We sit with them and try to explain all the reasons why this federal program is not in their interest to have their employees on. We will spend an enormous amount of time and effort to do that. But a percentage of them will still make the decision to drop it, and that’s this year. Then in 2025, we will have the same discussion again. Then in 2026, we will have the same discussion. If the vision that the Canadian Labour Congress has put forward is expanded to cover all medications, we’re going to have that conversation regarding 15,000 drugs.
To think that at the end of that employers will be contributing as much as they are going in, I think that’s a very risky assumption, and it has not been our experience. As I’ve said, we are already fielding calls from employers asking what they should do. We’re trying to push that off, but this is a risk that’s real. There are 4 million people just on diabetes and contraceptives who are today on medications that are not on that list. You have people asking what they’re going to do tomorrow if this passes. We can’t answer that question. We can’t read this legislation and understand it well enough to really know.
We all agree on the goal here: getting everyone the medication they need. I think everyone you’ve heard from has told you this legislation is opaque, uncertain, undefined and lacks regulation‑making power. It’s not ready to go. The time must be taken to do it well so that we don’t put all these things at risk.
I think that’s the core point. We will work with anyone to close gaps and make the system better, but this legislation doesn’t do that.
Senator Petitclerc: I have a quick follow-up question. My focus is a Canadian client-patient-oriented one. Maybe I’m simplifying, but I need clarity.
If a person through that bill has access to a list — let’s say diabetes medicines — and perhaps they don’t want it, but they are also covered by insurance. My understanding is that they will have access to what the insurance is covering.
That’s my thinking. Why would the insurance not provide what is not on the list? I guess that’s my question. What would be the value of an insurer not covering what is not on the list?
Mr. Frank: I guess there are two points. First, when we read this legislation, and particularly in light of the comments the minister made in the letter today, we have questions about our ability to do that. Those are questions for us. When you read this legislation in its entirety, there are risks there that we don’t understand. That’s one point that we actually need guidance on before we would be confident.
Second, the insurers want to provide the wraparound coverage. Our goal would be to continue to provide access for all the medications. The question is whether the employers will want to do that. I’m here to tell you not to assume that small businesses in Canada will take away from this that they continue to have a role in providing access to those medications. Many will decide they don’t because they will pick up the newspaper and look at the headline that says that the federal government is now paying for medications in the diabetes space, and we’re going to work hard to convince them that federal program is not robust. It’s not wide enough, it’s not broad enough and they’re better off keeping their people on their private plan. Many of them will agree to do that; some won’t, and we’re going to have to fight that conversation every year.
As the program gets expanded, which the law says would be a requirement within a year, you potentially start to have that discussion regarding hundreds or thousands of medications. The vision of a single-payer model will drive employers out of this. It will take 27 million people’s coverage from 13,000 drugs down to, say, 5,000 or 6,000 drugs. That’s how this plays out.
We think that gap is untested. We don’t think it’s wise to proceed in that way, and it needs to be studied much more carefully before we move down that path.
Senator Petitclerc: Do you want to add to this, Ms. Vipond?
Ms. Vipond: We’re here to talk about people’s health, and the biggest issue is employers and insurance companies deciding how to go about that. I’m not sure that’s where this decision should be made.
This is fundamentally about having a good health care system through which people can be healthy. This bill, going forward, will cover that.
As I said, I have full confidence that insurance companies will sell insurance and figure out what that looks like. We, as workers’ representative, will ensure that workers are getting the best they can in their workplace, but workers shouldn’t be beholden to a workplace because of health coverage. They shouldn’t be beholden to decisions around their medical health based solely on finances. I think we need to take that back as a community, as Canadians; these should be medical decisions, not financial decisions. That will put us in the best place moving forward.
We’ll go to the bargaining table regarding what people should be doing with the money they get back and doing our best for workers.
The Chair: Ms. Megyery, a short answer from you, please. You represent employers. We are talking about employers vacating and simply leaving a certain drug space. What are your members telling you? Will they do this?
Ms. Megyery: We have 400 chambers of commerce across the country. We had a call with many of them a few weeks ago, and they are very concerned about the uncertainty surrounding this piece of legislation. They are not clear on whether they can still maintain private plans. It’s not clear. It’s not what the legislation says.
Their concern is very much aligned with what Mr. Frank just said: This raises too many questions. They are very nervous. That’s what they’re hearing from their communities, from their members across Canada, that there are too many questions in this legislation and too little information around what the next steps could possibly look like. What are the next therapeutic categories? How would that happen? Is it the minister’s decision? There is too much uncertainty in this legislation.
Senator Pate: I’m curious how you both square this with the fact that in B.C., there’s already a memorandum of understanding. Despite these fears that medicines being covered will mean that people will abandon others, there’s been a very clear memorandum of understanding that where contraceptives are covered, the federal funding will be used to fund hormone replacement therapy, or HRT. There’s a memorandum of understanding to look at rare disease research. So it flies in the face of what you’re suggesting — that, in fact, people will be abandoned. Instead, it would point to the fact that alternative discussions will be happening in different jurisdictions depending on what the agreements are.
I’d like you to each clarify, and Ms. Vipond, if you also want to add where you see the risks of people actually facing this administrative burden or being at risk of losing access as to medicines they currently use when already a public memorandum of understanding has already started a negotiation that shows just the opposite and doesn’t feed into this fear.
Mr. Frank: That memorandum of understanding has not been signed, and that program is not real yet. There was an announcement of an intent to do that if the legislation passes. That kind of announcement precipitates questions from employers that we are fielding today, so suggest there has not been an impact is not correct.
Employers are already asking themselves, “What should I do about this?” As that memorandum of understanding has already expanded beyond contraceptives and diabetes medication, to get into other classes, it’s already getting bigger. It’s creating more uncertainty. Employers are asking even more questions.
To reiterate Ms. Megyery’s comments, there’s so much uncertainty around this. This is a finely tuned system. We dispense six prescriptions a second in Canada in real time. People go to the pharmacy, and they expect their medications.
It’s enormously risky to embark on this before we’ve thought it through. We understand what is going to happen. We understand what the rules are. This legislation does not allow us to do that.
Senator Seidman: I want to hark back to the first day we started our hearings. We had the minister in the first panel, and then we had the Parliamentary Budget Officer in the second panel. He gave us some very interesting insights that are very much in line with what you’re saying.
Going back to the transcripts of that day, I asked him:
Do you believe there is a market-based incentive for private insurers to reduce or eliminate their coverage for drugs that would be covered under a universal public plan? . . .
When I pushed him on that, he said:
Absolutely. If the government is providing a regime that covers 100% of prescription drugs for diabetes and contraceptives, whereas private plans have to incur these costs, there is obviously an incentive for them to say that they’re removing it through collective bargaining . . . .
I asked him again: “In your costing, you have said to us there’s an incentive for private insurers to eliminate their coverage. . . .”
He said:
If you want to limit the potential for private plans and public plans to off-load that to the provinces, legislation or regulations have to be drafted so that you have to go to your private provider or your province first. Then the feds cover only the remainder.
Then he said there is the potential:
. . . for a clever insurance company to say, “Look, there’s a payer with deep pockets.” Then they discreetly remove some of the coverage for diabetes and contraceptives, not — bang — the day of legislative Royal Assent, but over time progressively. . . .
And he talked about a shift, which, I believe, Mr. Frank, is what you spoke about.
I suppose I could ask any of you to comment on the testimony that we heard from the Parliamentary Budget Officer, which I would suggest is pretty darn credible.
Mr. Frank: I think he’s raising exactly the right concerns.
Ms. Megyery raised the Canadian Dental Care Plan. When that program was designed, it was carefully designed to protect the incentive structure so that employers and provinces don’t drop what they already provide. People have to attest to the fact they don’t have coverage. There are rules, requirements and regulations around that. It was designed to be a second payer.
This one has none of those protections. In fact, it’s designed to be single payer, universal, first-dollar coverage. It is designed to push us out. So we shouldn’t be surprised that that’s how the incentives will be. That is what may result from this legislation.
Senator Moodie: Mr. Frank, I will give you have the opportunity to answer my question. Coming from an industry that has a finely tuned mechanism, you can tell me the exact number of prescriptions per minute. How much money does your industry stand to lose if this bill passes unamended, and do your members have a financial interest in suggesting the amendments you have presented?
Mr. Frank: We can try to do some work on what the financial impacts of that would be. It’s a very complicated system, and so I don’t have that at my fingertips.
We’re looking at this from the patients’ perspective. We poll our clients every day, and we ask them what they want. I’m hearing from our clients that they do not want what they have today disrupted. Overwhelmingly, they do not want that. They like what they have. They get everything that they ask for and need, and they don’t want it disrupted. They want to help people who need help. We can, again, provide a lot of evidence to support that. Canadians are not looking for a single-payer pharmacare.
Senator McBean: I feel like I’m the cherry, but I should have been in the middle.
Back to the chart that Senator Seidman asked you about, and it also goes to Senator LaBoucane-Benson’s question. I’m new here. I’m a guest, but I’m getting the sense it’s not most or all diabetes drugs and your chart maybe presents that it’s just a few of them. You’re saying there’s such a large delta from the drugs that are currently covered to what would be covered. I don’t have the chart, but that’s okay. I don’t need it.
I’m just wondering if that chart, which contains the amount of money with respect to the drugs that are currently covered versus the amount that would be covered on the list, actually covers the majority of users. Does that include most users and it’s just sort of rare expensive ones on the outside, or —
Mr. Frank: That is a good question. It’s in the annex to our submission, Annex A. That’s probably the best chart. That’s the number of claimants. This is the number of people, and you can see that plan covers only about — well, there are about 4 million people who are currently on a medication that’s not on that list.
Senator McBean: And how many are on the list?
Mr. Frank: It only covers about 30%, so less than half. Less than half of the people are on medications that would be covered under this new one.
Just to reiterate, we cover on the private plans in aggregate 13,000 medications.
Senator McBean: Let’s just stick with the diabetes drugs.
Mr. Frank: I don’t have the numbers of the meds, but less than half of the people would be covered under the federal program. It’s about 52% who are not on the list.
Senator McBean: Thank you.
The Chair: Ms. Vipond, in the last one minute, would you like to respond?
Ms. Vipond: I heard that 48% of people would get coverage for their diabetes medications and devices, and that’s a good start to helping folks.
I will say that this is good legislation. It does need to do more, and we don’t deny that. Getting this passed can ensure that we’re on a pathway to taking care of people’s health, and we will all feel the benefit of that. So we, again, are encouraging swift passage of this to get those bilateral agreements and opportunities there for provinces to design that, and we can move forward.
The Chair: Thank you, Ms. Vipond. Colleagues, this brings us to the end of this panel. I would like to thank our witnesses for sharing their perspectives and knowledge with us.
Honourable senators, we will be proceeding to clause by clause tomorrow at our meeting at 11:30. I would like to remind all committee members that if you intend to propose amendments or observations at tomorrow’s meeting, please share them with the clerk in advance of the meeting and, if possible, also with your colleagues, in both official languages.
(The committee adjourned.)