Former federal budget watchdog Kevin Page will deliver a blunt message to premiers this week about the costs of a future national pharmacare program: if Canadians want one, taxes will have to go up.

Page, who now heads a University of Ottawa think tank, will walk through the numbers Friday when he gives a presentation to the provincial and territorial leaders on what lawmakers should know about creating a cross-country, publicly funded plan for prescription drugs.

The federal Liberals have put together a group of advisers, led by former Ontario health minister Eric Hoskins, to consult with Canadians and explore options for a national program. The council is due to report back next year, when the topic of pharmacare is sure to become a major issue during the federal election campaign.

Read: Feds announce members of national pharmacare advisory council

But the burning question remains: who’s going to pay for it?

Last fall, an analysis by the parliamentary budget officer estimated national pharmacare would carry a hefty cost in the neighbourhood of $20 billion a year. That’s about one percentage point of Canada’s gross domestic product and twice Ottawa’s annual deficit projections in each of the next few years.

Page said there’s a solid argument to be made for national pharmacare because it would help Canadians save significantly on their out-of-pocket drug expenses and create more consistency in terms of health costs across the country. The 2017 parliamentary budget office study estimated such a plan would save Canadians more than $4 billion every year on prescriptions.

But Page said Ottawa’s books are already facing a difficult fiscal situation and warned the federal balance sheet would become unsustainable if it assumed the full cost of such a program. The provinces, as a group, are in even rougher fiscal shape, he added.

Read: Assessing pharmacare’s impact on private drug plans

His presentation, which is based on a study by the Institute of Fiscal Studies and Democracy released today, recommends spending cuts and tax increases as ways to afford it.

Page, however, believes there’s no way to avoid tax hikes if Canada is serious about pharmacare. One option would be to boost the GST by two points, back to seven per cent, he added.

“Raising taxes is never easy, politically, in this environment, but I think if we’re going to really do something like this, we’re going to have to do it,” he said in an interview. “I don’t see any other way of really moving this forward.”

Read: National pharmacare the wrong solution: think-tank

Page will address the premiers in St. Andrew’s, N.B., where they will gather this week for Council of the Federation meetings. Without tax increases, governments will see their shortfalls balloon well beyond existing levels, he said.

“I think it would shock people,” said Page. “Deficits would literally double.”

He supports the argument that, in certain cases, public servants have a responsibility to tell taxpayers that raising taxes is in their interests as a way to make life easier for politicians to take unpopular decisions.

“I think the case for a national public pharmacare program is pretty strong, even from a fiscal perspective,” he said.

“Just on the numbers, it’s pretty clear that these public systems . . . produce much lower costs. Canadians are paying a lot for drugs. A lot.”

Read: Commons committee recommends national pharmacare program

Health-care advocates have long urged Ottawa to work with provinces and territories to implement a universal public prescription drug program that covers all Canadians.

Critics call the country’s current system an inefficient, expensive patchwork that has left 3.5 million Canadians unable to afford the medication they need.

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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Chas:

The advisory council doesn’t include any pharma, eligibility or adjudication expertise, actuarial expertise and limited medical expertise. How can a budget chief make any comment about tax impact when he doesn’t know what the eligibility criteria will be, not to mention formulary, co-pay, COB or the adjudication controls?

We spent over $40 million to audit less than $1 million of questionable senator expenses, and the chamber itself lost incalculable credibility capital from the way it handled what should have been a simple administrative review of ambiguous expense guidelines. If this is anything like what our approach to national pharma will be, I say get someone who actually knows how to do this on that advisory panel, or forget it.

Monday, July 16 at 11:36 am | Reply

Vince Pellegrino:

Yes, there is no free lunch. However, overall, I do agree we are best off with a universal drug plan. There will be a cost, but there should also be savings to corporations and their employees that currently pay for drug plans. The insurance premiums for existing employer drug plans should be lessened as a result of a universal drug program. Perhaps a tax on both employers and individuals may be appropriate and would be partly offset by expected insurance premium savings.

Monday, July 16 at 12:07 pm | Reply

Cindy Cavanagh:

I believe that pharmaceutical companies are the real issue. They need to be regulated more and should not be able to charge such high prices for life saving medications. In the long run, when we as a country pay these ridiculous prices, we enable them to keep them so high. Bringing in a countrywide pharmacare program is not really going to help as they are still able to get away with this.

Monday, July 16 at 12:25 pm | Reply

Sarah:

The issue is a very small proportion of private plan members who are unable to afford their high cost medications because their private plans are unable to pool the risk properly. In those cases, if private insurers were regulated to be forced to pool across all plans across the country, suddenly the small plan who is hit by a 100,000 drug per year for their employee will be in a better place to help their employee access the medication that will save their life and keep them at work.

The other issue is the poor and low-income who are unable to pay for even their very cheap medications, even if they have public drug insurance because the deductibles are too high. Those are the same people who also struggle to pay for their food and rent. Is the solution to give them free drugs, or give them free rent and food instead? This warrants a different approach than changing the entire system for the very few who are struggling.

If we are trying to save governments money, that is one thing. Scrap the whole thing and go to bulk buying. But don’t pretend it is for the benefit of those who have no drug insurance.

If we are trying to fill in the gap and make sure no one suffers from having no drugs, well then let’s find a solution to that problem, as I have said above. But let’s not mix up the two (use patients having access to justify governments saving) because the solution in one case will not work in the other.

Tuesday, July 17 at 11:38 am | Reply

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