Good afternoon, Mr. Chair and committee members.
First, thank you for the opportunity to appear as a witness on this important discussion. I am Natasha Mistry, director of stakeholder relations and community development at CARP.
CARP is a non-profit organization committed to enhancing financial security and improving health care for Canadians as they age. I am here today representing the more than 300,000 CARP members across the country, and to share the perspectives of retirees, seniors, and older Canadians. CARP has long believed that Canadian drug policies need improvement. The status quo is no longer a sustainable option. Reform is required to ensure that drugs are affordable and accessible to Canadians regardless of age, income, and geography. When used appropriately, these medications help seniors manage their conditions.
For example, drugs for MS patients slow down the progression of disease and ward off the advancement of physical disabilities. For people living with inflammatory bowel disease, specialty medications, such as biologics, have increased remission rates, reduced hospitalizations, and postponed the need for surgery—surgery that entails removing large sections of their gastrointestinal tract.
Seniors, especially those living with chronic health conditions, comorbidities, and disease, face challenges in accessing the medications they need. Among CARP members, 10% have admitted to skipping prescription medications because of costs. In 2014 a CARP survey on pharmacare revealed that 85% of CARP members have drug coverage. Nearly half, at 49%, commonly held private plans, and 28% received drug coverage through provincial plans. However, approximately 700,000 Canadians have no insurance coverage at all. Regardless of private or public coverage, the vast majority of CARP members support the development of a national pharmacare program. Access and affordability are key factors in ensuring better health care outcomes for all Canadians.
At CARP we have the following three recommendations for improvements: one, create national pharmacare standards; two, facilitate bulk buying to reduce costs; and three, have the federal government lead this process.
Recommendation one is to create national standards for pharmacare. Roughly 11 million Canadians are eligible to receive drug coverage through one of 19 provincial and federal public drug programs. Prescription drugs in Canada are currently financed by a fragmented patchwork of public and private drug formularies that vary by province. Each province manages its own health and drug plan. This results in varying programs for drug coverage across the country, with Ontario and the Atlantic provinces as the few that continue to provide public pharmacare coverage specifically for seniors.
As the boomer generation transitions from private to public plans, they place greater pressure on existing provincial drug budgets. This was a key instigator in B.C.'s decision to move from an age-based program to an income-based one. Private coverage too has its challenges, and it should not be assumed that private insurance provides sufficient coverage. To further complicate matters, approximately 40% of Canadians lack adequate private coverage for reasons of being self-employed or underemployed. For people living with chronic conditions or illnesses, insurance companies will often attach higher premiums or even decline applications in order to balance the cost of the benefits against the risks assumed by the insurer.
Recommendation two is to facilitate bulk buying to reduce costs. CARP members are in favour of national drug purchasing as the best way to bring down the cost of drugs. CARP supports the work of the pan-Canadian Pharmaceutical Alliance to jointly negotiate and help lower the cost of treatments. We appreciate the sophistication with which these negotiations take place; however, we encourage decisions to be made on a timely basis and financial challenges not to delay access. The way it stands, pharmaceutical costs should not be viewed in a silo, but instead be integrated into the health care system. In reality, provincial drug programs are kept separate from other health care budgets.
This makes it harder to evaluate the real value of drugs or the health care savings that result from pharmaceutical compliance. Because data on the cost of drugs and the cost of other health care are separate, the benefits of drug access will not be accounted for in understanding their impact and savings to the overall provincial health budget. We understand that provinces face difficult financial situations, and we all need to ensure that health care expenditures are judicious, with demonstrated improvements and outcomes.
With new technologies, drugs are lowering hospitalizations, surgeries, and emergency visits. Standardization and the creation of robust formularies are a way to achieve universal access no matter where Canadians reside. Without standards, drug access will continue to hinder access.
For example, the Gastrointestinal Society, together with Crohn's and Colitis Canada, recently produced a report card that graded provinces on access to biologic treatments for people with inflammatory bowel disease. The report card showed that because of varying criteria and formularies, access was inequitable in different provinces for people with gastrointestinal disease. Worse yet, in order to get access, gastroenterologists have expressed the desire to misdiagnose patients in order for them to quality for treatments gastroenterologists believe would help their patients achieve remission. This example demonstrates how formularies are out of step with the medical needs of patients.
The same drugs at the same price should be covered in every province and territory. Uniform standards among provincial catastrophic drug programs and public drug formularies are necessary to achieve equity. However, these standards must be robust and not merely reach minimum levels of drug coverage. There should be no race to the bottom. We must carefully review the best practices, the best criteria, and the best formularies to ensure adequate coverage and options. Patient choice must be made available to allow Canadians the most appropriate treatment.
To do this, governments, both provincial and federal, should work with medical practitioners and patients to devise appropriate standards for provincial catastrophic plans and formularies. The federal government should partner with provinces and territories to create a robust set of conditions that make drugs accessible.
This leads me to CARP's third recommendation: federal leadership for a pan-Canadian approach. CARP believes that creating a national pharmacare plan would require governments to jointly negotiate prices and access with private-sector insurers and pharmaceutical manufacturers. The federal government has a responsibility to play a strong role in the development of a national pharmacare plan. CARP has been recommending universal pharmacare for many years, calling on the federal and provincial governments to work together in the best interests of Canadians. We look to an expanded role for the federal government, one in which it would co-operate with provincial counterparts in creating the best plan possible.
As you have most likely heard from witnesses before me, Canada is the only country with a universal health care system that lacks universal coverage for prescription drugs. We need to do better, and the time is now. Each of you as a committee member has a crucial role to play in setting the course for the future of Canadian pharmacare. I urge you to devise recommendations that help to enhance pharmacare and that will allow our decision-makers to take these recommendations and implement change.
On behalf of the Canadian Medical Association and our over 83,000 physician members, I appreciate the opportunity to appear before the committee as part of its study on the development of a national pharmacare program. My name is Dr. Cindy Forbes. I'm a family physician from Nova Scotia and president of the Canadian Medical Association.
Prescription medication plays a critical role in health care. This is indisputable. However, Canada stands out, as you've heard certainly from the last speaker and I'm sure from many others, as being the only country with universal health care that does not also have universal pharmacare coverage. As a result, there are far too many Canadians who simply cannot afford to take the medication that they need.
Allow me to share some examples that illustrate the scope of this issue. At the national level, The Commonwealth Fund's 2013 international health policy survey revealed that 8% of Canadian respondents had either not filled a prescription or skipped doses because of cost. At the provincial and territorial level, there is wide variation in average household out-of-pocket spending. According to the 2014 survey of household spending, the poorest Prince Edward Island households spent more than twice as much, so $645, as did the poorest in Ontario at $300. We're also seeing patients being released from hospital having their prescriptions suddenly cut off, or we see patients covered for a drug in one province but not covered in another. This is especially common with cancer drugs, which are particularly expensive.
We all know that we can and that we must do better. However, we're unlikely to address the significant access gaps in prescription medication coverage without the leadership and support of the federal government. The CMA is therefore putting forward three recommendations for federal action to improve access to medically necessary drugs.
Our first recommendation to the committee is that the Parliamentary Budget Officer conduct a detailed examination of the financial burden of prescription medication coverage across Canada and develop costing options for a federal contribution to a national pharmacare program.
We recognize that these are fiscally challenging times at all levels of government. That's why our second recommendation, a proposal for a federal funding program, is fully scalable. We're recommending that the federal government establish a cost-shared program of coverage for prescription medications as a positive first step towards comprehensive universal coverage. This gradual and scalable approach would help ensure that Canadians have comparable access to the prescription drugs they need regardless of their ability to pay and wherever they live in Canada.
Finally, there are several other crucial elements that must be addressed in the development of a national pharmacare program. These include the need to influence prescribing behaviour, to advance electronic prescribing, and to mitigate drug shortages.
To ensure that these elements are captured in work going forward, our third and final recommendation is for the federal, provincial, and territorial health ministers to direct their officials to convene a working group on a national pharmaceuticals strategy. This working group would consult with stakeholders representing patients, prescribers, and the health insurance and pharmaceutical industries, and report their recommendations by the spring of 2017.
Few would argue that prescription medications are less vital to the health and health care of Canadians than are hospital and medical services. We would not have the medicare program that Canadians cherish today without the leadership and financial contribution of the federal government. Similarly, without it now we will not have any form of a national pharmacare program in future.
I thank you for your time, and I'd be pleased to answer any questions you may have.
Thank you, Mr. Chairman and committee members, for providing Consumer Health Products Canada with this opportunity to contribute to your study of pharmacare.
My name is Gerry Harrington. I'm vice-president of policy with CHP Canada, and my colleague is Kristin Willemsen, our director of scientific and regulatory affairs.
Our organization represents the makers of evidence-based over-the-counter medicines, or non-prescription drugs, and natural health products. These products fall into the broad category of consumer health products and are used by millions of Canadians every day to manage their personal health and to treat minor ailments. They are products like sunscreens, vitamins, pain relievers, and allergy medicines, to name just a few.
Let me begin by putting everyone at ease and say that I am not here to advocate for the broad inclusion of consumer health products in any potential national pharmacare plan. That may be a conversation for another day. This afternoon, I'd like to address the important role consumer health products play in the broader context of access to affordable medicines, and the specific way in which they would impact the development of any national pharmacare plan.
Over the years, CHP Canada has commissioned a great deal of research to look at how Canadians deal with their health concerns, including how they respond to minor ailments like colds, flu, allergies, heartburn and the like; how they manage the pain of arthritis; and how they invest in prevention with things like smoking-cessation aids. We have learned, consistent with international research on this, that their responses vary widely in terms of how they deal with those health concerns. I'd like to highlight just a few key findings from our most recent surveys that I think would be of interest to the committee.
In 2015 we surveyed 1,200 Canadians who reported having suffered from a cough or cold, headaches, allergies, heartburn or indigestion within the past 60 days. Over three-quarters of these Canadians told us that they generally preferred to self-manage these ailments without seeing a doctor, and that's great. It's also worth noting that those who self-managed these ailments were just as happy with the outcome as those who did visit a doctor.
I'd like to talk a little bit about the 14% of Canadians who did go to the doctor for these minor ailments. The motivations of this group would be, I think, particularly relevant in the development of a pharmacare environment. When we looked a little more closely at this group, we found that university-educated Canadians were 35% more likely to visit a doctor for a minor ailment than those with a high school diploma or less, and higher-income earners were 22% more likely to see a doctor. That may seem initially a little counterintuitive, but it makes perfect sense if you take prescription drug coverage into account, because in fact 26% of those who saw the doctor and received a prescription told us they did so precisely to have it covered by their pharmacare plan.
That explains the correlation: Higher incomes and education are correlated with drug-plan coverage.
I want to be clear that we are not advocating against physician care of minor ailments, or even against prescription treatment for those ailments where appropriate, as can be the case where the diagnosis is unclear or, perhaps, the underlying condition of the patient is complex. But it's worth noting that even relatively modest shifts in these kinds of behaviours can have a major impact on the health care system. For example, our research indicates that roughly 2% of all the people who suffered from one of these four minor ailments said that they went to the doctor even though they had self-assessed their symptoms as being relatively mild. That 2% does not sound like a very large number, but 2% of all minor ailment-sufferers in those four categories represents three million doctor visits a year. If we were to target those people who represent one-seventh of the one-seventh who do go to a doctor, we could free up an awful lot of physician resources, roughly the equivalent of what it would take to give access to a family doctor for 500,000 Canadians who currently don't have one.
Now, I know we're here to speak about pharmacare and not physician shortages or health system economics, but the point I wanted to make is that the design of a pharmacare system can't be done in a vacuum, because there could be far-reaching effects on the rest of the system as a result, especially if the result drives more Canadians to seek out prescription medicines when they might not otherwise do so.
At the same time, we're not advocating for new barriers to physician care or prescription medicine access, even for minor ailments.
Instead, we're asking you to consider including in your recommendations some things that would lower the barriers to self-care for those Canadians who would prefer to manage their own ailments.
I'm going to keep up with my colleagues at the table and offer you three recommendations on matters you may not be aware of. Just to preface this, many over-the-counter medicines on the market today began life as prescription drugs. They are made available to Canadians through a process known as the Rx-to-OTC switch. I'm talking about such things as ibuprofen or Advil, naproxen or Aleve, mometasone or Nasonex, etc. Even nicotine patches began as a prescription drug. Unfortunately, in Canada the process of switching products from prescription to non-prescription status has underperformed relative to that in other jurisdictions, such that Canadians are getting access to these products on average seven to nine years later than their U.S. or European Union counterparts are.
The first of our recommendations is aimed at trying to close that gap and provide earlier access to these medicines for Canadians. That addresses the mishmash of federal and provincial regulations that govern this process.
Currently, after Health Canada reviews all of the evidence and approves one of these switches, the manufacturer must then negotiate a process at the provincial level that reaffirms the switch and attaches additional conditions of sale. This decides whether the product is available only in pharmacies, perhaps just from behind the dispensary counter, and so forth. That process can delay product launches by up to two years in some provinces. It leads to different outcomes in different provinces, and discourages innovation by making this process extremely onerous for the manufacturer.
We believe Health Canada could play a leadership role in integrating the switch and drug-scheduling processes. In fact, Canada is the only jurisdiction right now that uses provincial pharmacy acts to fulfill that role. We think the dialogue that will go on between the federal government and the provinces over the potential development of a pharmacare program presents an ideal opportunity to begin the discussion around integrating those two processes. That is our first recommendation.
Our second recommendation is on the need to bring the treatment of intellectual property within the Canadian consumer health product regulatory framework into line with that of our major trading partners.
When a manufacturer submits evidence to Health Canada to support one of these switches and that switch is approved, the data package that has been provided by the manufacturer then becomes available to all competitors, and in fact second-entry manufacturers actually pursue a shorter regulatory approval process to get to market.
Combine this with the delays we experience around the scheduling front and the six-month notification process we have to go through for the World Trade Organization, and—it has happened before—the second-entry product actually hits the market before the innovator's does. This acts as a big disincentive to manufacturers applying for these switches.
Our major trading partners, such as the U.S., the EU, and Japan, offer between one and six years of data protection, so it's not a patent. Other manufacturers are free to conduct their own research and submit it in support of the switch, but the data submitted by the original manufacturer is protected for a period of one to six years. We believe Canada should match the three-year period that is offered by the U.S.
Finally, our third recommendation concerns the tax status of these products. It's ironic that when Health Canada approves one of these products for use without a prescription, with the aim of making it more accessible and more affordable to Canadians, that product goes from being GST-exempt and eligible for the medical expense tax credit to being taxable under the GST and exempt from the METC.
We think it would be very helpful if the committee were to recommend a reassessment of this tax treatment in Canada and to try to get a better alignment between tax policy and health policy.
While I recognize that the subject of the study is pharmacare and that I've made a number of recommendations related to products that are typically outside the scope of most drug plans, the point we are trying to make here today is that we believe the committee would be remiss if it did not consider pharmacare within the larger patient-centred context of how Canadians actually manage their own health and the things that drive that behaviour.
Thank you for your time. I look forward to your questions.
Thank you very much, Mr. Chair.
Thank you to the witnesses for being here today.
Mr. Harrington, I'd like to start with you, because I think you brought up how Canadians manage their own health. I think that is the question, because whatever system you put in, I think, has to be patient-centric and we have to look after the best interests of Canadians. One of the worries I have is that if you put too many marbles in one pot.... For a pharmacare program, for example, sometimes a pharmaceutical may not be the best treatment for someone. My colleague who is an emergency room physician brought up the issue of statins for cholesterol. Sometimes the harder treatment is exercise and maybe diet. If the government is covering a statin, I'll go that route. In the long term it may not be the best benefit.
One of my concerns is market distortion. I've seen it in my own community of Oshawa, where people have really great coverage. If they go to their physician, they get the coverage for 35¢, and that could be the over-the-counter cough medicine, or it could be something that is much more expensive. There's a bit of a distortion there, and I'm worried about that.
I was wondering if you could give us some advice on what steps could be taken within the design of any drug coverage program to ensure the patients do not seek unnecessary prescriptions when they're looking at the management of their maladies.
Thank you for that question. It's certainly an issue that is talked about in many different forums and formats in the medical profession.
I can think of a reference to some of the work we've done around senior care, and in our document on a senior strategy, we do talk about de-prescribing and some of the issues around polypharmacy. It is something that the profession is aware of and there's certainly a movement.
You may be familiar with the Choosing Wisely type of program whereby we're looking not only at the issue of prescriptions but also at how to ensure that the use of health care resources, tests, and procedures is necessary and in the patient's best interest. There is a lot of focus within the medical profession on professional education around prescribing.
I do agree that being overly controlling, from a federal government point of view, could be a problem in practice, that there does need to be some flexibility for physicians to use clinical judgment. However, at the same time, some of the formularies do look at the cost-benefit ratios and can contribute to lowering some of the costs when it comes to looking at which of the drugs gives the same value at the lowest cost.
That's often a helpful thing. I find myself being educated on a daily basis with regard to our provincial pharmacare program when a pharmacist calls and says that one drug isn't covered and that another one is much less expensive. Those things are happening on the ground every day.
One of the things that we also mentioned, though, was the concept of e-prescribing and support for electronic prescribing as well. That is something that the federal government could assist with in terms of national support. This would not only allow a national database but also allow physicians to communicate electronically with the pharmacies and to have that information on which prescriptions patients are taking.
Sometimes, as a family physician, I don't actually know all the prescriptions my patients are taking because they may come from different sources, such as the emergency room or a walk-in clinic, so I think a key component to improving pharmaceutical prescribing in Canada is to have a means of prescribing electronically so we can share data from across the country.
I hope that answers your question.