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Pharmacare Bill

Second Reading--Debate Adjourned

June 6, 2024

Moved second reading of Bill C-64, An Act respecting pharmacare.

She said: I am pleased to sponsor Bill C-64, An Act respecting pharmacare (Pharmacare Act), introduced by the Minister of Health on February 29, 2024.

This bill lays out the foundational principles for the first and vitally important steps towards national pharmacare for Canada. It outlines a plan to work with all provinces and territories willing to provide universal single-payer coverage of necessary medicines, starting with a number of contraceptive and diabetes medications. This legislation could improve access to prescription drugs, promote safe and appropriate prescribing and bring relief to Canadian households and employers who struggle with the high cost of necessary medications.

This bill brings Canada into line with most other wealthy countries that provide universal coverage of necessary medicines as part of their medicare systems. When medicare was introduced in Canada in the 1960s, prescription drugs played a relatively limited role in health care. Most drugs used outside a hospital were inexpensive medicines for common conditions. In the intervening decades, however, the development of drugs has surged as pharmaceutical companies have proliferated and marketed ever-increasing new treatments and cures.

Prescription medications are now a central part of health care. As a share of overall health care costs, spending on prescribed drugs has risen from 6% in 1975 to nearly 14% in 2022. This makes prescription drugs the second largest area of health care spending in Canada, second only, honourable colleagues, to hospital services. The cost of prescription medicines is a concern for far too many Canadians for whom access to affordable medication remains a significant and sometimes life-altering — sometimes life-ending — challenge.

In 2021, Statistics Canada found that 20% — or one in five — of adults in Canada did not have adequate coverage for their medication. In the face of rising costs, some Canadians are dealing with an untenable choice: they must decide between paying for their prescriptions or covering essentials like rent, food or heat. In a country as well resourced as ours, nobody should be abandoned in such ways.

Some people try to ration their drugs to save costs. Skipping doses or avoiding necessary treatments due to financial constraints can make already precarious health conditions far worse, which can lead to more serious health issues and more costly interventions overall.

A key Canadian value is that everyone should have timely access to the health care they need, when they need it, regardless of their ability to pay.

In 2019, the Advisory Council on the Implementation of National Pharmacare released its final report, known as the Hoskins report. It provided a blueprint for implementing a national pharmacare plan. Crucially, the Hoskins report recognized that pharmacare could improve access to necessary medicines for all Canadians while also saving costs if implemented as a universal single-payer system. Allowing Canada’s public drug plans to join forces to provide single-payer coverage of carefully selected medications would increase bargaining power and effectively lower drug prices in a way that Canada’s current patchwork mix of public and private plans simply cannot.

To realize this goal, the Hoskins report recommended an incremental or stepwise process, an approach to national pharmacare implementation that reflects both the significance of the work needed to make this transformational change and the clear end goal of a universal single-payer system to guide and inform each step.

The report recommended as a key first task the development of a national formulary, consisting of “. . . a carefully chosen list of essential medicines covering most major conditions and representing about half of all prescriptions” in Canada today.

Such an approach provides the time necessary to select medications to be covered nationally, negotiate the prices of covered drugs and allow meaningful coverage to begin while serving as a starting point that could be expanded into a more fulsome program.

Bill C-64 reflects this incremental approach to the implementation of national pharmacare. It lays the groundwork for universal single-payer coverage of essential contraceptive and diabetes medications. It also tasks the newly formed Canadian Drug Agency with the development of a broader national formulary of essential medicines that would be the next step for universal single-payer coverage.

Bill C-64 is the first step in addressing current inequities in Canada’s patchwork system of drug coverage. In Budget 2024, the Government of Canada announced $1.5 billion over five years to support the launch of national pharmacare. This investment in contraception and diabetes medications will benefit both the health of Canadians and our health care system.

There are now more than 9 million women and gender-diverse people of reproductive age in Canada; that’s nearly one quarter of our total population. Access to safe, reliable contraception, particularly birth control, is essential. It provides the freedom to plan families and pursue long-term goals and dreams. This could include continuing with education, advancing a career or simply being able to wait to start a family.

Reliable and effective birth control is key to bodily autonomy. It is an essential component of reproductive health and is instrumental in advancing equality.

Too many of us know the consequences of unintended pregnancies, the disproportionate health and financial — not to mention social — consequences of which are disproportionately experienced and borne by women. The negative health and economic impacts can be legion.

Cost is identified as the single-most significant barrier to accessing contraception. This can prohibit people from using birth control regularly and too often prevents them from choosing the most effective measures.

For example, oral contraceptives, which cost approximately $25 per month, have a typical use failure rate of 9%. Compare this with intrauterine devices, or IUDs, which cost up to $500 per unit. IUDs are more expensive up front, but they are generally more effective, can last for five years and have a use failure rate of just 0.2%.

For a young, part-time or gig worker without employment-based drug coverage, that $500 IUD is not merely out of reach, it is unfathomable as an option. Limited employment income coupled with uncertain employment status, which is all too common for young adults, can also make even the cost of a monthly prescription a challenging expense. Just imagine what an unintended pregnancy means in those circumstances. Women from lower-income households, because of affordability, are often forced to use less effective contraceptive methods or no contraception at all.

There can also be stigma and risk associated with trying to access contraceptive medications, such that even girls and women who have drug coverage on paper through a family member might be prevented from using this coverage for fear of potential repercussions from parents or partners.

Studies have demonstrated that publicly funded, no-cost, universal access to contraception can lead to public cost savings. For instance, researchers at the University of British Columbia estimate that no-cost contraception has the potential to save the B.C. health care system alone approximately $27 million per year.

The same cost-saving principles apply to medications for diabetes. Diabetes is one of the most common chronic diseases in Canada. It currently affects about 3.7 million people, and that number is growing. We all know someone living with diabetes, and many of us have witnessed first-hand how this life-changing disease can have massive negative impacts on people’s quality of life. Untreated or inadequately addressed diabetes can lead to heart attack, stroke, kidney failure, blindness and loss of circulatory health that can require the amputation of limbs and even end in death.

The full cost of diabetes to the health care system in 2018 was estimated to be around $27 billion, and that amount could exceed $39 billion by 2028. There is no cure for diabetes, but there are treatments to manage the disease.

In addition to and separate from Bill C-64, the Government of Canada also plans to create a fund for diabetes devices and supplies. This fund would be rolled out to support access to diabetes devices, such as continuous glucose monitors, insulin pumps, syringes and test strips. Combined with the framework outlined in Bill C-64 for universal single-payer coverage for select diabetes medications, this will help ensure that no diabetic in Canada is forced to ration their medication or compromise their treatment.

Providing coverage for these medications aligns with the four foundational principles embodied in Bill C-64. These principles are accessibility, affordability, appropriate use and universality.

Making prescription drugs more accessible means improving the consistency of access to drug coverage and needed medications across the country. Someone in rural P.E.I. or remote Northern communities should have access to the same diabetes medications as someone living in downtown Vancouver, Toronto, Montreal or here in the homeland of the Algonquin Anishinaabe Nation, also known as Ottawa.

Making prescription drugs more affordable means reducing administrative and financial barriers for Canadians, including premiums, deductibles and co-pays. Additionally, national pharmacare should address how to ensure that the prescription drugs people are taking are appropriate. This includes getting the right drug to the right patient at the right time to support their physical and mental well-being.

Finally, national pharmacare should be universal. As the Senate’s Social Affairs Committee noted in its report entitled The Health of Canadians —The Federal Role during its landmark study, universality is one of the five national principles set out in the Canada Health Act and “. . . means that public health care insurance must be provided to all Canadians.” This means we must ensure that the principles of accessibility, affordability and the appropriate use of prescription drugs are applicable to all Canadians, regardless of where they live.

Each of these principles will help guide a step-by-step approach to building national universal pharmacare in collaboration with provinces, territories and Indigenous peoples.

Bill C-64 also outlines some of the work the newly established Canada’s Drug Agency will undertake. As you might recall, this agency was created in December 2023 with an investment of $89.5 million over five years, starting now — in 2024 — through to 2025.

Building upon the existing world-class health technology assessment capacity of the former Canadian Agency for Drugs and Technologies in Health, the new Canada’s Drug Agency will help lead and coordinate efforts to make Canada’s pharmaceutical system more sustainable and prepared for the future. Bill C-64 calls upon the agency to prepare a list of prescriptions and related products to inform the development of Canada’s national formulary of essential medicines. This formulary will outline the scope of prescription drugs and related products to which Canadians should have access under the next stage of national universal pharmacare. As recommended by the Hoskins Report, the agency’s work on this must be rigorous, evidence-based and independent of commercial interests in the pharmaceutical sector in order to arrive at a national formulary that ensures equitable, evidence-based coverage for all Canadians.

Bill C-64 also tasks the Minister of Health with requesting that the agency develop a national bulk-purchasing strategy for prescription drugs and related products in collaboration with partners and stakeholders, including provinces and territories. As with the formulary itself, this procurement strategy must be developed absent the conflict of interest of drug companies and insurers, and with the well-being of all Canadians in mind, in order to best identify ways to increase the availability of and reduce prices for prescription drugs.

The agency must complete the preliminary list and strategy no later than the first anniversary of the day on which this act receives Royal Assent.

Finally, the agency will support the publication of a pan‑Canadian strategy on the appropriate use of prescription drugs and related products. Such strategies have been shown to improve health outcomes and reduce health system costs in other countries. In addition to the first report, Canada’s Drug Agency would also be required to report upon progress made in advancing this strategy every three years.

It is also important to point out that Bill C-64 recognizes and respects the important role of provinces and territories, as well as Indigenous peoples, in delivering health care. After all, Canada is large and diverse. Every province and territory has different needs and faces different challenges. This diversity necessitates a cooperative approach to help ensure that no Canadian is left behind.

If we are going to transform a complex landscape of drug coverage into national pharmacare while also improving access and affordability, we must do so in collaboration with provinces and territories, relying upon their considerable expertise and experience. Therefore, every step taken toward national universal pharmacare needs to be taken in concert with these partners.

The funding to support national pharmacare outlined in Bill C-64 will be provided to provincial and territorial governments through bilateral agreements. At the same time, the Government of Canada will look to learn from initiatives currently under way as they continue to work toward ensuring access and affordability for all Canadians.

Since August 2021, the Government of Canada has been working with the Province of Prince Edward Island to lower drug costs for patients via the Improving Affordable Access to Prescription Drugs program. In that time, P.E.I. has added more than 100 new medications to its list of drugs covered by provincial programs. These include medications for cancer, heart disease, migraines and multiple sclerosis. In addition, effective June 1, 2023, P.E.I. reduced co-pays to $5 for almost 60% of medications regularly used by beneficiaries of its public drug plans. Thanks to this initiative, P.E.I. residents have saved over $2 million in out-of-pocket costs on more than 230,000 prescriptions.

Although not an example of a single-payer system, the work in P.E.I. is an illustration of the benefits of reducing costs for patients. As Canada puts into place the building blocks for universal single-payer public pharmacare, including a national formulary and bulk-purchasing capacity, both P.E.I. and Canada can harness countless additional benefits in the form of institutional capacity to help contain overall drug costs.

Visiting P.E.I. last week and hearing from many involved provided additional helpful context and increased my understanding regarding the need for the universal public drug plan envisioned by the Hoskins Report, and advocated for by Canadian and international experts, to ensure equality of access as well as equality of benefits. No doubt, there will be pressure on this and subsequent governments to follow the United States by implementing a fill-in-the-gap type of pharmacare model. Therefore, colleagues, we will all need to remain vigilant and ensure that our universal pharmacare program is just that.

How do we do that, and how do we ensure this?

We start by insisting that access does not vary from one person to the next. It should not be a fill-in-the-gap style for some people or some benefits. It should not be run as a patchwork of literally thousands of independent private and public drug plans that generates unnecessary administrative costs and program complexity for patients and prescribers. It should not be a multi‑payer system that fragments Canada’s purchasing power when negotiating prices and supply guarantees with multinational pharmaceutical companies. It should not leave individual households and employers bearing most of the program costs on their own. And, especially as it rolls out with the crucial coverage of contraception, it must not force teenagers or young adults to ask their parents’ permission to use their existing private plan to reimburse contraceptives.

To prevent corporate lobbies from subverting the laudable intention of a national pharmacare program, it is imperative that Bill C-64 adhere to the recommendations of the 2019 Hoskins report. These include ensuring the following: First, the federal government should work with provinces, territories and Indigenous peoples to develop national pharmacare as a universal, single-payer, public system of prescription drug coverage that offers universal benefits unconditionally as a matter of citizenship or residency.

Second, national pharmacare should be a public program that applies the fundamental principles of Canadian medicare as embodied in the Canada Health Act.

Third, national pharmacare payments to provinces and territories for the coverage of selected diabetes and contraception medications should result in the provision of universal, single‑payer, first-dollar, public coverage for these first stages of national pharmacare.

Fourth, provinces and territories should have the flexibility to offer coverage beyond the national pharmacare standards.

Establishing these principles clearly and unconditionally in the act, and thereby preserving the national negotiating power of the pharmacare program, will create the institutional capacity necessary to ensure the universal access that Prince Edward Islanders, with whom I met, await — ensuring it’s in a way that will remain equitable and sustainable for generations to come.

Bill C-64 also builds on the work done to make drugs for rare diseases more accessible. In March 2023, the federal government launched Canada’s first-ever National Strategy for Drugs for Rare Diseases. With a federal investment of up to $1.5 billion over three years, this strategy will improve access to drugs for rare diseases and make them more affordable to those who need them.

As part of the initial three-year phase of the strategy, the Government of Canada is providing up to $1.4 billion to provinces and territories through bilateral agreements. This investment will enable consistency in access to these medications across the country, and, colleagues, these are medications that can transform and even save the lives of people with rare diseases in Canada. This is the first step toward looking at drugs for rare diseases from a national perspective.

Bill C-64 represents an important step forward to ensure that every Canadian has access to the affordable, quality medicines that they need. The Government of Canada’s plan to provide universal coverage for contraception and diabetes medications will be transformational for individuals, families, society and our health care system. It is a start, and an important one, for Canadians. In a time when too many are shrinking from the hard‑won struggles of previous generations of women, investing in reproductive health sends a clear and important message.

Also, as the country where insulin was first discovered by Banting, Best and Macleod in 1921 at the University of Toronto, it is fitting that diabetes medications will also be among the first provided. As we work to build a national pharmacare system that puts public interests above all else, we are reminded of the fact that these Canadian scientists, in addition to winning the Nobel Peace Prize, resisted impulses to personally profit over a matter of such importance to public health. Banting refused to even be part of any patent, as he considered it unethical to profit off of people’s need for life-saving medicine. His two colleagues did patent insulin, but sold the patent to the University of Toronto for $1 so that it would benefit all.

Dear colleagues, there is still much work to do. The federal government must clarify the mandate and governance of Canada’s Drug Agency as it relates to national pharmacare. It must carefully select the first medications to be covered beyond these. It must negotiate prices and supply guarantees for covered medications. And it must work with provinces, territories and Indigenous peoples to ensure universal, single-payer, first-dollar, public coverage of these medications. This is serious work in the second-largest component of the Canadian health care system. All Canadians will be better off if we do this work in a principled manner together.

As the Romanow report, the 2018 House committee report and the Hoskins report have consistently made clear, these first steps lay the foundation for a national pharmacare program that will continue to expand to cover every medicine for every Canadian. We must, therefore, resist pushes to privatize and commodify the process.

From the outset, this program will need the buying power of a single-payer system purchasing medications for 40 million Canadians through processes that are evidence-based and publicly accountable. In addition to lowering costs for medications, this should streamline system complexity and administrative costs.

Honourable colleagues, by continuing our work together and passing this legislation, we can ensure that we enhance and fortify our health care system, and continue our work to ensure it is there for us when we need it, both now and in the years to come.

Meegwetch. Thank you.

Hon. Joan Kingston [ + ]

Would the senator take a question, please?

Senator Kingston [ + ]

Thank you. Many health care organizations, including those representing Canada’s nurses, have advocated for a national pharmacare system for a long time. The studies that you mentioned have recommended establishing, of course, universal, single-payer, public pharmacare in Canada, which is what Canada’s nurses have also advocated for.

Could you elaborate, in particular, on how a fully developed national, universal pharmacare system would decrease the costs in the provincial acute care systems of health?

You are far more of an expert than I am, so I think you know the answer already. Part of it is certainly the bulk purchasing power. We know that in the United States, and even in Quebec, where they have gone with the fill-in-the-gaps model, the cost is actually higher. We are already seeing that you can reduce the cost by those measures, but you can reduce the costs far more and, therefore, benefit all Canadians if you use the bulk purchasing power of negotiating on behalf of 40 million Canadians versus however many there are in whichever province or territory you are living.

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