Prime Minister Justin Trudeau and Minister of Finance Bill Morneau arrive in the Foyer of the House of Commons to table the Budget, on Parliament Hill in Ottawa on Tuesday, March 19, 2019. (Justin Tang/The Canadian Press)

BUDGET 2019: Liberals to create national drug agency for pharmacare plan

Canada’s current patchwork of drug coverage is not well equipped to handle increasingly expensive drugs

The Trudeau Liberals’ new budget promises a new agency to buy drugs in bulk and cut Canadian medication costs, the first step toward a national drug plan.

In a sign of just how expensive pharmacare could be, the government is also promising to spend $500 million a year, starting in 2022, just on subsidizing drugs that treat rare diseases, which have few patients to split huge research and development costs.

The government said it intends to work with provinces, territories and other partners to develop the mandate for the national drug agency, with Health Canada to receive $35 million over four years starting in 2019-2020 to create an office to support the plan.

The budget also includes plans to create a national formulary, a list of drugs that have been evaluated for both efficacy and cost-effectiveness. Lower-tier governments now assess drugs on their own, duplicating much of the work.

Despite clear language in the budget on how the government eventually intends to move ahead on a pharmacare plan, a central question remains: how to pay for it.

A universal pharmacare plan does not appear affordable for Canada right now, said Rebekah Young, the director of fiscal and provincial economics for Scotiabank. She said adding such a plan to the government’s books without major tax hikes would require stronger growth than Canada sees even in the best of times.

Provinces do not have a lot of capacity to take on substantial new costs, she said, noting the parliamentary budget office has estimated the cost of a pharmacare plan at about $20 billion a year.

“The big question then becomes who is going to pay and how much?” she said. “That will definitely be a key feature of the summer debate when we head into the election.”

The federal New Democrats have promised that if elected, they would follow through on a universal pharmacare plan to respond to dramatic increases in prescription drug costs.

READ MORE: As deficit grows, feds spend on job retraining, home incentives

Over the past three decades, Canadians’ spending on medication has soared from $2.6 billion in 1985 to $33.7 billion in 2018. People take more drugs to manage more conditions than they used to — living longer, and better, but at considerable cost.

The Canadian Institute for Health Information says drugs are the fastest-growing component in health spending but that most people’s medication needs aren’t covered by public health insurance, unlike care provided in hospitals and through visits to the doctor.

Canada’s current patchwork of drug coverage — including more than 100 public programs and 100,000 private insurance plans — is not well equipped to handle the increasingly expensive drugs now coming to market, the government said in its budget document.

“Absorbing these rising costs is difficult for individual Canadians and their families — and poses challenges to the long-term sustainability of government- and employer-sponsored drug plans,” it said.

The steps toward pharmacare contained in Tuesday’s budget follow interim findings issued by a federal expert panel led by former Ontario health minister Eric Hoskins.

It recently issued a report on the “building blocks” of pharmacare, including a recommendation that Ottawa oversee an agency to roll out a national drug plan.

The interim report said drug spending in Canada is expected to surpass $50 billion by 2028.

At the time of its release, British Columbia Health Minister Adrian Dix described the panel’s interim report as encouraging, but said the federal government would need to “step up.”

“It’s very positive to see the interim report, but ultimately this issue will be about whether the federal government is prepared to cost-share or not,” he said.

Hoskins’ advisory council is set to issue a final report on the issue of access to drug coverage this spring, with the findings to be tabled in the House of Commons.

Kristy Kirkup, The Canadian Press

Like us on Facebook and follow us on Twitter.

2019 federal budget

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Non-profits that are helping people impacted by COVID-19 can apply for relief funding

Red Deer and District FCSS can draw from a provincial pot of $30 million

No Alberta renter will be evicted for non-payment on April 1, promises the premier

No evictions during the entire Alberta public health emergency

Opening Red Deer’s safe consumption site would reduce strain on system during COVID-19, says advocate

Alberta should give also give addicts clean drugs, added Deborah Watson

Sylvan Lake product named SCAHL’s Best Goaltender

West Central Bantam AA Tigers’ Spencer Michnik received the coach-voted award for the 2019-20 season

A message from the publisher

Consider a voluntary subscription to Sylvan Lake News

COVID-19 world update: Enforceable quarantine in NYC?; France orders 1 billion masks

Spain warns EU’s future at stake; New York governor calls Trump’s idea ‘federal declaration of war

Families urge action to get Canadians home from cruise ship stuck off Panama

1,243 passengers and 586 crew on board and more tests are being done every day

Canada could face legal trouble over refugee deportations: advocates

Deputy Prime Minister Freeland holding ‘urgent’ discussions with U.S. officials

Regions brace to fight rising flood waters and cases of COVID-19

Pontiac is one of dozens of flood-prone regions bracing for the possibility of rising waters

Feds working to get 248 Canadians stranded on COVID-19-infected cruise ship home

The federal government is working with the Panamanian government and Holland America

Most Read