As talks about the future of Canada’s health-care agreements kicked off in Vancouver yesterday, federal Health Minister Jane Philpott announced that Ottawa is joining the provincial drug bulk-buying program. But plan sponsors should be prepared for the long-term impact of excluding private insurers from such a plan.

“It continues to entrench two levels of pricing for the Canadian market, one for the provinces and the second, higher price, for anyone paying through a private insurance plan,” says Stephen Frank, vice president, policy development and health, the Canadian Life and Health Insurance Association.

“We don’t think that’s the right approach going forward. We would like to see the bulk purchasing strategy include all the private insurers as well, so that we’re negotiating as a country to get the best price for everybody, and that everybody gets the same price.”

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In his mandate letter to federal Health Minister Jane Philpott, Prime Minister Justin Trudeau has written: “I expect you to work with provincial and territorial governments to support them in their efforts to make home care more available, prescription drugs more affordable, and mental health care more accessible.”

The first focus was for the federal government to work with provincial and territorial governments in developing a new multi-year Health Accord, which should include a long-term funding agreement.

Despite the move towards a national approach to the bulk purchase of drugs, the CLHIA believes this strategy should include the private insurers as well. However, they have to be formally asked before joining any government agreements.

“It would require an opening to us from the provinces to join,” says Frank. “There are many, many ways how that could happen. But we continue to hope that we will someday be included in those negotiations.”

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All of this is highlighted against the backdrop of escalating drug costs in Canada, which are putting a strain on employee plans. According to recent Benefits Canada research, 64% of the 200 plan sponsors surveyed have concerns about the rising drug costs, particularly biologic and other rare specialty drugs.

“If we don’t do something to address that, there is a real risk that employers will start to reconsider their commitment to prescription drug coverage and that’s not going to be in anyone’s interest,” says Frank. “Working together to get prices down is important for everyone in Canada.”

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