Pharmacare Fact Sheet #2

Pharmacare works in British Columbia

Although the Liberal government says it is spending too much money on B.C.’s Pharmacare program, this province actually spends less per capita on its drug expenditures (public and private combined) than any other province.

PROVINCIAL COMPARISION PRESCRIPTION DRUG EXPENDITURE Province % Private % Public Per Capita Expenditures Alberta 61.2 38.8 $321.89 B.C. 43.7 56.3 284.86 Manitoba 54.8 45.1 328.32 New Brunswick 72.4 27.6 381.68 Newfoundland 57.4 42.7 292.36 Nova Scotia 63.1 36.9 344.30 Ontario 60.6 39.4 416.49 Prince Edward Island 73.1 26.7 371.13 Quebec 52 48 379.55 Saskatchewan 55.4 324.45 Source: Canadian Institute of Health Information, Drug Expenditures in Canada, 1985 to 2000; Comparisons in the table are for year 2000

B.C. has managed to keep the annual per capita cost of drugs at the nation’s lowest despite the fact that at 13 per cent we have the highest percentage of citizens over the age of 65. Compare this to Alberta’s annual per capita cost even though its seniors only make up 9.6 per cent of the population.

B.C. also spends less of its total health care budget on drug expenditures than any other province.

DRUG EXPENDITURE AS % OFTOTAL HEALTH EXPENDITURES Province Drugs Total health expenditure %Drugs of Total Alberta 931.0 $7,214.80 12.9 B.C. 1241.6 11,306.60 11.0 Manitoba 439.9 3,177.20 13.8 New Brunswick 251.2 1,808.80 13.9 Newfoundland 196.9 1,366.30 14.4 Nova Scotia 367.0 2,278.60 16.1 Ontario 4,777.2 31,551.00 15.1 Prince Edward Island 57.5 350.80 16.4 Quebec 2,559.6 17,706.60 14.5 Saskatchewan 339.6 2,746.60 12.4 Source: Canadian Institute of Health Information, National Health Expenditure Trends, 1975 to 1998; Comparisons in the table are for the year 2000

In other words, Pharmacare works!

WHY IS B.C.’S PHARMACARE MORE EQUITABLE AND COST EFFECTIVE THAN IN OTHER PROVINCES?

Pharmacare has found ways to control drug costs by requiring the use of generic and low cost options that have been proven to be as clinically effective as the patented equivalents. A lot more could be done to control these costs if B.C.’s provincial government worked with other provinces and the federal government to support the implementation of a national Pharmacare program.

B.C. has the lowest per capita prescription drug costs in the country (see page 1), and that’s because such a large percentage of the province’s drug expenditures are publicly paid. The government’s argument that the public expenditure is too rich is backwards — it keeps the costs down. Cutting the public contribution would only shift the costs to individuals (and employers) and drive prices upward.

PHARMACEUTICAL COMPANIES ARE DRIVING THE COST OF PRESCRIPTION DRUGS UP

The costs of all drugs have skyrocketed since Brian Mulroney’s conservative government extended the patent protection on new drugs to a whopping 20 years. This limits the choice of doctors and patients and means the pharmaceutical companies can charge inflated prices. That money comes out of patients’ pockets and the provinces’ public Pharmacare budgets.

While some new drugs offer benefits, evidence shows the majority of new drugs add little value. Breakthrough medications made up only eight per cent of newly patented drugs between 1991-95 in Canada. But pharmaceutical companies patent new drugs, market them as innovative and charge an arm and a leg when an existing and less expensive drug in most cases would be just as affective.

While expenditures for existing drugs have been declining in the last decade, spending on new drugs has skyrocketed and even surpassed the established drugs.

Drug companies are aggressively marketing to both patients and doctors, resulting in patients demanding — and getting — drugs prescribed to them which may not be necessary.

WHAT WILL BE THE IMPACT OF CUTS TO PHARMACARE?

There will be an increase in costs for union members who pay for all or part of their benefit package — like HEU members on long-term disability and people at some long-term care facilities. And there will be an increase in costs to the employer.

Businesses in B.C. now enjoy a competitive edge owing to costs covered by universal health care of which Pharmacare forms a part. That edge will be lost when employers must ante up for some of the costs covered by Pharmacare now. Canadian employers are the envy of their American counterparts who pay up to two to 2.8 times that of their Canadian counterparts for health care benefits — a large part of which is the cost of prescription drugs.

The government is talking about means testing, with seniors and the disabled having to prove that they are poor enough to deserve this benefit. This type of screening is degrading and would cost more money than it would save. There are so few seniors that would be disqualified by use of such a test that the administrative costs would far outweigh the savings.

If moderate and low-income persons pay for drugs out-of-pocket, they may simply go without and they could end up costing the health care system even more money when they show up in emergency wards and acute care hospitals. In Quebec, when the government told seniors and those on low incomes they had to pay 25 per cent of their prescription costs instead of the $2.00 they had been paying before, fewer patients purchased the drugs their doctors had prescribed. The result was more extreme adverse effects and costs to the health care system.

NEW DRUGS MAY NOT BE SO NEW - THEY MAY BE:

  • me-too drugs with new doses, new delivery systems
  • marketed as major breakthroughs, but have only minor therapeutic advantages for few people
  • heavily promoted and put on market before fully tested
  • sold with sponsor-based medical “education” programsadvertised direct-to-consumer
  • 1991-1995, only eight per cent of newly patented drugs were “breakthrough” medications 49 per cent were new strength formulations of existing drugs and 43 per cent were only moderate or no improvement over existing drugs (Canadian Health Coalition 1997 study)