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HESA Committee Meeting

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Minutes of Proceedings

42nd Parliament, 1st Session
Meeting No. 21
Thursday, September 29, 2016, 8:47 a.m. to 10:45 a.m.
Bill Casey, Chair (Liberal)

Library of Parliament
• Karin Phillips, Analyst
• Marlisa Tiedemann, Analyst
Library of Parliament
• Jean-Denis Fréchette, Parliamentary Budget Officer
• Mostafa Askari, Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer
• Peter Weltman, Senior Director, Costing and Program Analysis, Office of the Parliamentary Budget Officer
• Carleigh Malanik, Financial Analyst, Office of the Parliamentary Budget Officer
Pursuant to Standing Order 108(2) and the motion adopted by the Committee on March 7, 2016, the Committee resumed its study of the Development of a National Pharmacare Program.

Jean-Denis Fréchette and Carleigh Malanik made statements and, with Mostafa Askari and Peter Weltman, answered questions.

At 10:05 a.m., the sitting was suspended.

At 10:08 a.m., the sitting resumed in camera.

The Committee proceeded to the consideration of matters related to Committee business.

It was agreed, — That the motion adopted Tuesday, September 27, 2016, concerning the Parliamentary Budget Officer be rescinded and replaced with the following: "That the Committee request the Parliamentary Budget Officer to provide it with an analysis of the following items by (specify date based on PBO’s estimate of earliest date this analysis can reasonably be completed):

a. The total number and percentage of Canadians:

i. who are ineligible for full public coverage of all prescription pharmaceuticals outside of hospitals (under current provincial and federal programs), excluding catastrophic coverage, and who do not have equivalent private or employer sponsored coverage; and
ii. whose private or employer-sponsored coverage has been reduced or eliminated in the past 10 years.

b. Estimate the current Canadian annual total of:

i. employer contributions to employer-sponsored private insurance benefit plans in respect of prescription pharmaceutical coverage;
ii. employee contributions to employer-sponsored private insurance benefit plans in respect of prescription pharmaceutical coverage;
iii. total out-of-pocket payments by patients for prescription pharmaceuticals;
iv. direct and indirect government subsidies to private pharmaceutical insurance plans;
v. expenditure on prescription pharmaceuticals broken down by province or territory and by source of funding;
vi. individual expenditure on private pharmaceutical insurance coverage;

and where possible, broken down by province or territory, by urban/rural, by age quintile and by annual household income quintile, for all of the above information.

c. Estimate the cost of (1) creating and (2) administering:

i. a single-payer universal first-dollar prescription drug coverage under the Canada Health Act; and
ii. a single purchaser and national distribution system for prescription drugs, possibly modeled on the Canadian Blood Services and/or other relevant models in Canada or other jurisdictions.

d. Assume that there is a single national formulary for prescription drugs with tiers based on the relative importance of the health condition treated, and the relative effectiveness of the drug in addressing the health condition, ranging from essential medicines for tier 1, and then proceeding to drugs that are less essential or equivalent but more costly in subsequent tiers.

In terms of the financing of a single-payer prescription drug coverage program, analyze the efficiency of an:

i. introduction of a payroll tax;
ii. increase in sales tax;
iii. increase in corporate and/or personal income tax; and
iv. introduction of a co-pay based on France’s SMR/ASMR model.

e. Discuss the implications of and the tools available for raising any additional revenue needed to finance such a program.

f. To the extent possible:

i. estimate of the total annual savings to the health care system from eliminating cost-related non-adherence to pharmaceutical prescriptions in Canada;
ii. estimate of the total annual savings achievable by a single-payer, as opposed to the present multiplicity of public and private payers, acting as the sole original purchaser of prescription pharmaceuticals in Canada; and
iii. estimate of the total annual savings from bulk buying, exclusive licensing, increased use of generic medicines, and evidence-based formulary.

In carrying out this analysis, the PBO will work with Canadian Institutes for Health Information, Statistics Canada, Canadian Agency for Drugs and Technology in Health, IMS Brogan and other sources to obtain appropriate data. The PBO’s report will disclose in detail the sources of data, the quality of the data and the methods of analysis used".

At 10:45 a.m., the Committee adjourned to the call of the Chair.

David Gagnon
Clerk of the Committee