December, 2010 / Author:

There are massive holes in Canadian pharma-quilt

Divide and conquor has long been a sound policy if you want to win and it’s one that Big Pharma has certainly capitalized on. In recent years, drug companies have massively increased the cost of some life-saving drugs and health ministers are becoming increasingly worried about the escalation. Others are worried that Canada seems to have no national plan when it comes to helping citizens pay for expensive drugs.

Winnipegger Jim Kane, who recently became prairie regional representative on the board of the Canadian AIDS Society, says it’s time politicians paid attention to the uneven and unfair costs that burden people buying drugs, especially those for life-threatening illnesses. He says every province has a different system for covering drug costs and it’s causing hardship for many people. He’s been living with HIV for almost 25 years and says the cost of obtaining drugs depends on where you live, whether you have a low income, whether you have third-party insurance and many other factors. His own annual drug costs are now around $36,000.

 “People recently diagnosed and who have no resistance to HIV drugs generally have lower bills but as you survive longer and develop resistance the costs tend to go up because you need new types of drugs,” he says. “The problem is that getting access to HIV drugs varies from province to province and gets more complicated when you consider the federal government has its own drug access programs.”

Few people realize that in Canada our catastrophic drug plans resemble a patchwork quilt with some big holes in it. Manitoba used to have a Life Saving Drugs Plan that provided free HIV drugs, but that was dropped in 1995 and now your income determines what you pay for drugs. This year, for example, the sliding pharmacare scale requires anyone with an adjusted net family income below $27,000 to pay 4.13 per cent of that towards their drug costs. Anyone with a family income above $75,000 would pay 6.12 per cent. 

In Alberta, one of the richer provinces, HIV drugs are free. In Ontario, the user pays for drugs up to four per cent of net family income, while in Saskatchewan you pay up to 3.4 per cent of net income. Clearly, what you pay depends on where you live and Jim Kane thinks that’s wrong, since our health-care system is supposedly universal. Each province or territory makes its own decision about which drugs and other treatments it will cover. The decision is based mainly on economic factors, including its drug budget, population base and number of eligible residents with each disease or condition.

Unlike most countries that are members of the Organization for Economic Co-operation and Development (OECD), Canada does not have a national catastrophic drug coverage system.  What it has is a confusing patchwork of public and private drug insurance plans. There are 19 publicly funded drug plans: 10 provincial, three territorial and six federal. These programs complement more than 1,000 private drug insurance programs offered by employers, unions and professional associations across the country. These plans vary significantly in terms of eligibility, benefit payment structures and drug formularies.

Alberta provides a universal drug coverage program for its residents. The program caps out-of-pocket expenses at $25 per prescription. However, it does not provide an overall cap to protect against high drug costs, but instead limits its payout to $25,000 per year. Prince Edward Island, New Brunswick and Yukon do not have universal programs. In Nunavut the government provides 100 per cent drug coverage.

Manitoba used to have a life saving drugs plan that provided free Hiv drugs, but that was dropped in 1995 and now your income determines what you pay for drugs.

In 2004, as part of a National Pharmaceuticals Strategy, Canada’s first ministers established a federal/provincial/territorial ministerial task force to develop, assess and cost options for national catastrophic drug coverage. Kane says Ottawa did come through with a large pot of new health money for the provinces in 2003/4 but there is still no national drug coverage plan. “The trouble is that the feds attached no strings to the money,” he says. “An election was on the horizon and each province used the new money for whatever it decided needed it most.”

That funding agreement is up for renegotiation in 2014 and Kane hopes by then there will be enough pressure on governments to move forward with some kind of national plan for catastrophic drug coverage.  The Canadian AIDS Society -– a national coalition of more than 125 community-based AIDS organizations from across Canada – will be one group pressuring politicians to get the national catastrophic drug plan in place.  Jeffrey Keller, a lawyer who lives with HIV and is also the prairie region director for the Canadian AIDS Society, told Outwords the current hodge-podge of plans is unfair.

“Some people with HIV do have trouble paying for their portion of the drugs,” he says. “In Saskatchewan I might end up paying hundreds a month, but I live in Alberta now and I never see a drug bill. If you live in Ontario the best thing to do is go on welfare and then your drugs are free. How can that make sense?” 

The Canadian Council on Integrated Health Care (CCIH), an independent think tank, is also urging change. As it noted in a recent report: “The 2003 Health Accord promised to ensure that all Canadians would have reasonable access to catastrophic drug coverage, public drug insurance to prevent financial hardship.”  

Most provinces and territories do cover drug costs for people with specific diseases that require high-cost prescription drugs, though the types of diseases covered vary by province and territory. Programs for those on social assistance and low-income seniors either require minimal co-payments, or they cover the full costs of drugs. Many employers also offer private plans which offer some degree of protection from huge drug bills.  

The federal government has its own dizzying array of plans to cover drug costs. Its drug plans cover aboriginals, public servants, veterans and members of the armed services, regular and retired members of the RCMP, Correctional Service of Canada workers, federal offenders, refugee claimants, Convention refugees, and persons detained by the government for immigration purposes.

 The Mulroney government gave Big Pharma companies a 20-year patent on their drugs before generic products could be made at a lower price. They have made many millions in profit from HIV drugs and cancer drugs. When life itself is at stake people—and governments—are really over a financial barrel and Canadians pay some of the highest drug prices in the world. Kane says a loophole in the patent legislation allows for “evergreening” and it’s costing governments and consumers plenty. Basically the clause allows drug companies to extend their 20-year patent protection by three years, provided they ‘improve’ the drug in some way. In one case, he says, they simply changed a large, chalky-tasting pill into a smaller more easily digested tablet, thus extending their patent protection. “The government needs to closely monitor this kind of patent extension,” he says.


– Peter Carlye-Gordge is a Winnipeg-based freelance writer, former producer for CBC and former Maclean’s writer. To comment on this or any other article in Outwords, write to letters@outwords.ca

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