The Canadian Life and Health Insurance Association (CLHIA) says the prescription drug system must be fundamentally reformed if it is to serve Canadians well in the long term.
Its newest public policy paper, Ensuring the Accessibility, Affordability and Sustainability of Prescription Drugs in Canada, states that the current system is inequitable both in terms of access and price.
Rising drug costs, particularly related to the increasing incidence of rare but very high cost drugs, undermines the ability of employers to continue to offer drug coverage benefits to employees.
In 2011, life and health insurers made benefit payments for prescription drugs of $10.1 billion, and private payers accounted for roughly 55% of all prescription drug purchases.
“A pullback on drug coverage by employers would have dramatic implications, not only for individuals but also for governments that are themselves struggling with rising healthcare costs,” according to the paper.
Any long-term solution to these challenges will require both public and private payers to make adjustments to their programs and to work more collaboratively in the future.
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The paper makes many recommendations that need to be addressed.
As a priority, it argues that fundamental reform is required of the Patented Medicines Prices Review Board’s mandate and practices in order to reduce drug prices for all Canadians.
It also recommends that discussions start on creating a common national minimum formulary as a means to reduce complexity in the system and that governments lead a discussion to work toward the creation of a new, collaborative end-to-end approval and funding regime for orphan drugs.
While fundamental reform is pursued, the paper suggests that shorter-term and more tactical reform also be implemented.
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It suggests that provinces start to automatically list generic drugs once they have been approved as bio-equivalent with the brand drug, which will eliminate the current lag in listing new generics and will immediately generate savings for all Canadians.
The paper also recommends that governments implement improved processes to reduce the complexity in the system so that individuals can smoothly transition between public and private coverage and that a monitoring framework for off-label prescribing be developed to address concerns over patient safety and cost escalation.
“There is no question that the prescription drug system that exists today is badly in need of reform,” said Frank Swedlove, president of CLHIA. “The current patchwork of systems across the country inflates costs, creates a great deal of confusion and, even worse, results in significant financial hardship for some Canadians with respect to the cost of drugs.”