Drug Costs & Pharmacare Flashcards
Medically necessary health needs are covered under 5 conditions, but __________ are not.
Pharmaceuticals are not covered; once you get a prescription from a physician, you are no longer covered by universal health care
Why Pharmaceuticals are not covered by Universal Health care in Canada
- universal care not covering pharmaceuticals is on the policy agenda but we still have not changed it
- the original idea was to do policy in stages: first hospital insurance, then medical insurance, then drug insurance (but they never got to drug insurance)
- policy makers also wanted to wait until there was stability with drug prices (ie lets wait for drug prices to plateoa before we say we will cover it through taxes)
The amount of money spent on prescription drugs is _____________?
- tied for the 2nd biggest thing we spend money on in terms of health
Cost drivers of drugs
- Barriers to government bringing drugs into the universal healthcare system is COST
- Drugs are so expensive because…
○ Population aging - as the population gets older, they require more drugs
○ Inflation
○ Volume of units - the more drugs we prescribe, the more money we need to spend
2 Primary Reasons for increasing drug costs
1) Increase in the overall use of prescription drugs
2) Use of newer and more costly prescription drugs
What is the Problem?
- Canada’s drug prices are the3rd highest among the 38 Organisation for Economic Co-operation and Development (OECD)
countries, influencing Canadians’ access to drugs (impacting their health) and the sustainability of Canada’s health care system
- This can lead to poor health because people are unable to pay for their prescription drugs
- Or we are funnelling too much money toward drugs and not enough elsewhere - 1 in 5 Canadians either don’t have prescription drug
insurance or have inadequate insurance to cover their medication
needs- Work insurance can cover the cost of some drugs, but not all
- Insurance can come with co-pays or deductible’s
(you might need to pay for the 1st 20% of your antibiotics, and healthcare coverage will pay for the rest)
- Work insurance can cover the cost of some drugs, but not all
- 3 million Canadians do not fill their prescriptions
- If they were free, they would fill it and take the prescription
The Aging Population
- All provinces/territories in Canada provide public drug coverage for seniors aged 65+
- Costs of medicines don’t change dramatically, but source of financing does
- money doesn’t come from insurance, it comes from government funding
- so as the population ages, the GOVERNMENT is spending more
- Governments may choose to avoid public liability associated with an age-based entitlement to drugs and switch to means-tested or catastrophic drug plans
- Means-tested - subsidize drugs depending on your means
- What is your income; You get more free drugs, if you have low income and are below the age of 65
- Catastrophic drug plan is a social safety net
- If you get so sick, that drug costs insane amounts of money, the drug plan will financially support you
- Governments may choose to limit public drug expenditures rather
than address the societal burden of total drug expenditures- Are we going to address the fact that the population is aging which requires higher costs for pharmaceuticals because more of them are sick, or will we address the increasing cost of the drugs themselves?
What is the Ontario Drug Benefit?
- aka ‘drug formulary’
- List of drugs that the province has identified they will pay for (If not on the list, you have to pay out of pocket)
Who is eligible
- >65 are covered
- <25 and not covered by a private insurance plan
- Living in a long-term care home/special care home
- Receiving professional home and community care services
- Receiving benefits from Ontario Works or Ontario Disability Support Program
- enrolled in the Trillium Drug Program - Drug plan that says if you spend 4% or more of their after-tax household income, they will cover all or part of your drug care costs
Who sets drug pricing?
STEP 1: Health Canada regulates the use of drugs (look ate safety and efficacy)
STEP 2: common health review
- Evaluate the clinical and cost effectiveness of drugs, societal factors about why people need them , look at inequities, and make recommendation to provinces about if they should list these drugs on the formulary
- most often, provinces do what the health review says to do
STEP 3: Drug companies speak to provinces to negotiate prices
- Happens independently; drug companies go to each province separately
Drug Pricing?
- Patented Medicine Prices Review Board: an independent tribunal
that limits the prices set by patentees for all patented medicines sold in Canada to ensure they’re not excessive
○ Their job is to limit the price for patented medicines to ensure they are accessible
○ Only applies to patented medications (exclusive rights to making money off that drug)
○ A patent is held for 20 years (The patent then dissolves, and another company can produce a generic drug with the same chemical formulation which will be cheaper) - PMPRB can not review the prices negotiated with the federal or provincial drug plans
Evaluates:
- Prices of other drugs from the same therapeutic class in the market
- Prices of the same medicine and other medicines in the same therapeutic class in comparator countries
- we pick France, Germany, Italy, Sweden, Switzerland, UK, USA which jack up the price so we wont find drugs highly priced if comparing it to how much they cost in these countries
- Changes in the Consumer Price Index
Principles of National Healthcare
1) Universal - all canadian residents should have equal access to the national system
2) Comprehensive - pharmacare should provide safe, effective, and evidence-based treatments
3) Accessible - access to prescription drugs should be based on medical need, not ability to pay
4) Portable - benefits should be portable across provinces/territories when people travel
5) Public - should be publicly funded and administered
What is the Trillium Plan?
- plan that says if you spend 4% or more of their after-tax household income, they will cover all or part of your drug care costs
What is the catastrophic drug plan?
the plan is a social safety net
- If you get so sick, that drug costs insane amounts of money, the drug plan will financially support you
ie. you pay a premium fee/month for protection against extremely high costs of drugs
