Presidential hopefuls in the United States don’t typically campaign abroad. Sen. Bernie Sanders (I-Vt.), however, made an exception recently when he traveled across the Michigan-Ontario border on a chartered bus with diabetes patients who were headed to Windsor to purchase affordable insulin in Canada. Sanders’s foreign visit directed a message home: Prescription drug prices in America are too high and must come down.
In the United States, overpriced drugs have become such an issue that the Trump administration, searching for a fix, announced plans to allow Americans to import drugs from Canada. North of the border, observers weren’t keen on the idea, fearing shortages and rising prices in a market where shortages are already common and prices are often prohibitive.
Both Trump and Sanders are looking to Canada for a model — or perhaps a kluge — for affordable prescription drugs in the United States. But if they’re going to look north, they should look past the present and toward the future. Or the future that could be, if Canada decides it wants to provide affordable drug prices and does something about it.
Canada’s medical insurance system is single-payer. But its prescription drug system isn’t. Basic medical services are paid for by the state through a combination of federal and provincial funds. Each province has its own scheme that adheres — more or less — to the Canada Health Act. The act is meant to ensure that every Canadian is covered for basic medical services of similar quality and availability across the country and doesn’t have to pay out of pocket. So, when a citizen visits a general practitioner for a checkup or enters the hospital for a procedure, the cost is billed to and paid by their provincial insurance plan.
As mentioned, prescription drugs aren’t universally covered in Canada (nor are eye care and dental care). There are provincial benefits programs, but they’re inconsistent and inadequate. Millions of Canadians enjoy coverage for pharmaceuticals by supplemental benefits packages through their employer, though some of them are underinsured.
Canadian drug costs are among the highest in the world, though they are well behind the United States. Many Canadians pay considerable premiums for drug plans. Many are uninsured, stuck paying the inflated “sticker price” — the list price — for drugs (if they can afford to).
In a study published in the Canadian Medical Association Journal, Steve Morgan, professor in the School of Population and Public Health at the University of British Columbia, and his colleagues Christine Leopold and Anita K. Wagner found that drug costs fluctuate wildly among high-income countries with universal health care — by more than 600 percent. Canada and its mixed private/public drug scheme is on the high end, where “the list prices of medicines used … were about 61% higher than the average list prices in other countries.”
The solution to pricey pharmaceuticals is more government: a national, universal, single-payer program that includes a single body to negotiate drug prices with manufacturers.
As Morgan pointed out to me by email, the hodgepodge system in Canada tilts toward higher prices in part because private insurers have neither sufficient capacity nor authority to manage price negotiations with pharmaceutical companies. He said “it can even be argued that private insurers, who bear no risk in the majority of the drug plans that they sell, have a perverse incentive in so far as they do better when prices are higher and more money is flowing through the system. And with literally thousands of independent private plans being operated for each separated employee group, it is virtually impossible for insurers to use a common, evidence-based formulary.”
A unified program would, in contrast, ease the negotiation for the buyer, making the process more effective and driving down the cost of drugs while ensuring that every Canadian is covered in the primary market.
Universal pharmaceutical coverage would also deliver the benefits of universality found in other government programs and commitments, such as health care and education. Universality breeds solidarity and resilience. The more we’re in it together, the more we support that which we’re in; the more we’re in it together, the harder it is to pick off or ignore the weak and wounded or to install and perpetuate a system of winners and losers, buttressed by structural privilege and the whims of fortune and misfortune.
Support for a universal pharmacare plan is widespread. In June, a national advisory council created by the Trudeau government recommended such a system. With an election in the fall, the New Democratic Party is running on “pharmacare for all,” noting that “Canada is the only country in the world with universal health care that doesn’t cover medication.”
Last winter, a report prepared by Environics Research for the Canadian Federation of Nurses Unions found that 88 percent of respondents agreed “strongly” or “somewhat” that “It is better to have a simple, cost-effective prescription drug coverage program that covers everyone in the country than to have a patchwork program that allows some people to fall through the cracks.”
Yes, indeed it is. So, Canada ought to get on with it. And if the United States is to look to Canada for guidance on how to justly manage the pharmaceutical needs of Americans, if it insists on gazing northward, then it ought to look not only upward but into the future, too. Only once Canada has national, universal, single-payer pharmacare and a national body to negotiate prices will it be worthy of emulation.