October 10, 2024
Honourable senators, I rise today as opposition critic to speak at third reading to Bill C-64, An Act respecting pharmacare.
First, I would like to thank our chair, the sponsor, Senator Pate and committee colleagues for all of their efforts to listen and respond to the testimony of experts, stakeholders and those with lived experience on a challenging piece of legislation. Today, I will seek to explore what “universal” might mean given that the term has many different definitions.
In the context of pharmacare, there are well-known international examples. I will then revisit some key questions that I raised in my second-reading speech, questions I had hoped committee hearings might shed more light on. Finally, I will share some issues raised by provincial and territorial governments with regard to jurisdictional respect.
To begin, honourable senators, let us assess the assertion that Canada is the only country in the world with universal health care that does not provide universal coverage for prescription drugs. When parliamentarians repeat this remark, we should be explicit in identifying what we mean by the term “universal.”
In the Canadian health care context, we often speak of universal coverage as if it must mean single-payer coverage; however, A Prescription for Canada: Achieving Pharmacare for All, the 2019 Final Report of the Advisory Council on the Implementation of National Pharmacare — sometimes referred to as the Hoskins report — notes that a statutory multi-payer insurance approach is used in a number of countries of the Organisation for Economic Co-operation and Development, or OECD, including France, Germany and the Netherlands, to “. . . provide universal health insurance (including drug coverage) to their residents.”
Annex 5 of the report summarizes key characteristics of the pharmacare systems in these and other comparator countries. This annex makes it clear that universal pharmacare coverage does not mean that the state is exclusively responsible for prescription drug costs, nor does it mean that the plan must be publicly administered.
The Australian system of universal, comprehensive public pharmacare coverage has copayments equal to the lesser of $37 or the full cost of the drug. Copayments are reduced to $6 once a household has paid $1,425 in copayments during the calendar year. About half of adults have voluntary complementary private insurance.
France has universal, comprehensive statutory insurance coverage. The plan pays for as little as 15% and as much as 100% of prescription costs, depending on the medicine’s clinical benefit. More than 90% of residents have voluntary complementary private insurance.
The German system of universal, comprehensive statutory insurance requires copayments of approximately $7 to $15 and allows residents earning over $90,000 a year to opt to purchase substitutive private health insurance.
The Dutch system of universal statutory insurance coverage requires an annual deductible of $584, and more than 80% of residents have voluntary complementary private insurance.
Universal coverage and single-payer coverage are not synonymous. Many of our peer countries have statutory multi-payer pharmacare systems that have much more in common with the Quebec model than with the model proposed in Bill C-64. As a reminder here, I will quote the Hoskins report directly:
Quebec is the only Canadian jurisdiction that has achieved universal drug coverage and it did so by making drug insurance mandatory for all residents. Employers that provide health benefits to their employees are required to provide prescription drug coverage that meets or exceeds the level of coverage provided by the province’s public drug plan. Residents who are not eligible for private insurance through their employer or occupation are required to enrol in, and pay premiums for, the provincial drug plan (some vulnerable groups, such as low-income seniors, are exempted from paying premiums).
Adopting the Quebec model would meet the objective of providing Canadians with universal pharmacare coverage, but in Bill C-64, the government instead proposes a much more expensive plan that will decrease choice for Canadians.
Further, Bill C-64 appears designed to confuse Canadians. Neither the bill’s summary nor its purpose makes mention of prescription drugs intended for contraception or the treatment of diabetes. It speaks of “national universal pharmacare.”
As I noted at second reading, Bill C-64 seems to propose two policies: a conceptual, so-called universal program for the government to work toward and, second, the structure and processes for the implementation of a fill-in-the-gaps coverage for “. . . specific prescription drugs and related products intended for contraception or the treatment of diabetes.”
Why do I say, “fill-in-the-gaps”? This might have been the intent because clause 6(1) states clearly that the minister must “. . . make payments to the province or territory . . . to increase any existing public pharmacare coverage . . . .”
In fact, the Prince Edward Island demonstration project that preceded this bill was a fill-in-the-gaps model. Are you confused yet? Canadians deserve legislation that is transparent. Bill C-64 is not.
Colleagues, I will provide an overview of the main questions I raised at second reading of Bill C-64 and how these were addressed — or not — at committee.
At second reading, I asked whether national, universal, single-payer pharmacare may have a negative impact on pharmacists’ practice. At committee, Dr. Shelita Dattani from the Neighbourhood Pharmacy Association of Canada recalled the challenges of implementing OHIP+ in Ontario. She said:
. . . in 2018, the OHIP+ program in Ontario sought to provide comprehensive medication coverage to Ontarians under the age of 25 whether they had existing coverage or not, based on the Ontario provincial drug formulary. This was well intentioned to ensure no youth was left behind, but in reality, the government paid millions more than needed for medications Ontarians were already accessing. Many of these young adults faced a disruption when their coverage changed or the medication . . . was not now covered by the provincial formulary. . . .
Dr. Danielle Paes, the Chief Pharmacist Officer at the Canadian Pharmacists Association, also shared her perspective as a pharmacist who is on the front line:
I think a lot of what pharmacists do is behind the scenes. We are on the phone with insurance plans. . . . It is not just a list. It is a matter of making sure that everything aligns so that the actual drug gets into the hands of the patients. . . .
On the potential financial implications of Bill C-64, Dr. Benoit Morin of the Association québécoise des pharmaciens propriétaires warned that some Quebec pharmacies will not survive if they can only charge one dispensing fee which has been set by the province or territory. Private plans pay higher dispensing fees; therefore, pharmacies’ finances depend upon a combination of fees from prescriptions filled on the public plan and prescriptions filled on the private plans. He said:
It is precisely this flexibility that allows Quebec pharmacies to grow, to be present in all regions and to offer a multitude of services to patients. Without this flexibility, the financial health of the pharmacy network would be undermined with even greater repercussions in remote regions.
Dr. Dattani from the Neighbourhood Pharmacy Association underscored this point when she said, “. . . an unintended consequence of single-payer Pharmacare could very well be a reduction in pharmacy services and medication access.”
At second reading, I asked, “Can we, in our current health care ecosystem, afford to jeopardize the success of our pharmacies and pharmacists?” It seems that the federal government is poised to do so.
At second reading, I voiced the concern that national, universal, single-payer pharmacare could erode access to drugs and exacerbate drug shortages. At the Standing Senate Committee on Social Affairs, Science and Technology, Ms. Joelle Walker of the Canadian Pharmacists Association addressed this concern:
Pharmacists spend about 20% of their time managing drug shortages. . . . The concept that if you bulk buy a lot of drugs, you save money is perhaps accurate in the pure sense, but it also has a lot of consequences. We’re most vulnerable in Canada when we only have one particular medication for something. . . .
Ms. Walker also noted that there is a common misconception that governments buy drugs. She said:
Pharmacies buy drugs, and then they are reimbursed by governments for those drugs. Bulk purchasing is . . . predicated on a concept, which is that you have to buy one particular drug in bulk, and that’s what makes us vulnerable to drug shortages. . . .
Angelique Berg, President and CEO of the Canadian Association for Pharmacy Distribution Management, told the Social Affairs, Science and Technology Committee that an unintended consequence of Bill C-64 is that it could exacerbate drug shortages and result in contracted availability of drugs on pharmacy shelves. She cautioned that a restrictive national formulary and bulk purchasing agreement could disrupt Canada’s drug supply. The potential for disruption:
. . . can already be seen with the proposed national pharmacare list of diabetes drugs, which only includes half of the drugs on the market today. Affected Canadians would be forced to switch from their current therapy to something on the list, which has a domino effect on the supply chain. As distributors’ buffer stock is depleted and manufacturers of drugs not listed on the list leave the market, over time, the drug supply will be more vulnerable to shortages.
Jim Keon, the President of the Canadian Generic Pharmaceutical Association, noted that the term “bulk purchasing” is not defined in Bill C-64, and it is therefore unclear what it will mean. He reminded the committee that Canadian governments already combine their purchasing power to negotiate internationally competitive drug prices for Canadians through the pan-Canadian Pharmaceutical Alliance, or pCPA. He said:
It is critical that the pharmacare regime respects the existing pharmaceutical pricing infrastructure to ensure stability of the Canadian drug supply.
Any further pressure on generic drug pricing will lead to additional drug shortages, the number of which are already unfortunately high.
. . . limiting the number of suppliers for a given medicine . . . increases the risk of drug shortages. If the chosen supplier or suppliers have production or other issues, there could be few, if any, alternatives to meet patient needs.
At second reading, I asked whether costs for a national, universal, single-payer pharmacare program could far exceed current estimates. The Parliamentary Budget Officer, or PBO, estimated that the first phase of national universal pharmacare would increase federal program spending by $1.9 billion over five years.
Budget 2024, meanwhile, committed $1.5 billion over five years to Health Canada to support the launch of a national pharmacare plan. Therefore, the committee knew, before hearings even started, that pharmacare was underfunded by at least $400 million. But the PBO’s estimate assumed that any medications that are currently covered by provincial and territorial governments, as well as private insurance providers, would remain covered on the same terms. In other words, he presumed a fill-in-the-gaps pharmacare program — he read the bill also. If drugs that are currently covered by provincial and territorial governments and private insurance providers do not remain covered on the same terms, the program would cost $5.7 billion over five years, not $1.5 billion.
I was concerned whether employers would continue to provide their employees with their existing insurance coverage for drugs if those drugs were fully covered by the government. When the Parliamentary Budget Officer appeared before the Social Affairs Committee, I asked him whether there is a market-based incentive for private insurers to reduce or eliminate their coverage for drugs that would be covered under a universal public plan. Mr. Giroux, the PBO, responded:
Absolutely. If the government is providing a regime that covers 100% of prescription drugs for diabetes and contraceptives, whereas private plans have to incur these costs, there is obviously an incentive for [employers] to say that they’re removing it through collective bargaining, for example, and to tell employees [that if you] go to the federal government to get the 20% that is not covered; you might as well go for 100%. . . . That is such an incentive that I am talking about and that you are referring to in your question . . . .
On September 27, less than a week before clause-by-clause consideration, the Chair of the Social Affairs, Science and Technology Committee, Senator Omidvar, received a letter from Minister Mark Holland that was then distributed to the full committee. In his letter, the minister wrote:
For additional clarity, this standard of coverage means that all residents of a participating province or territory will be eligible to receive free access, without co-pay or deductible, to a range of contraception and diabetes medications. Under this program, the cost of these medications will be paid for and administered through the public plan, rather than through a mix of public and private payers.
Hmm. Now are we even more confused?
It would seem, then, that medications that are currently covered by private insurance providers will not remain covered on the same terms. The Parliamentary Budget Officer anticipated $2.5 billion in cost recovery due to private drug plan coverage. Without that cost recovery, this phase of pharmacare is estimated to cost $4.4 billion and is, therefore, underfunded by approximately $2.9 billion.
At second reading, I observed that the proposed list of diabetes drugs is very restricted. On February 29, 2024, on the same day that Bill C-64 was tabled in the other place, Health Canada published a backgrounder on its website with lists of the contraceptives and diabetes medications to be discussed with the provinces and territories as bilateral agreements are negotiated. By my count, the list includes 70 birth control drugs and devices but 18 diabetes drugs.
In a brief to the Social Affairs Committee, the Canadian Life and Health Insurance Association shared an analysis of the lists in the Health Canada backgrounder. They wrote that in 2023, workplace benefit plans covered approximately $1.7 billion in diabetes medications. Per their analysis, 85% of those costs would not be covered under the formulary in the Health Canada backgrounder. Regarding contraception, they wrote that in 2023, workplace benefit plans covered approximately $217 million in contraceptives, and only 21% of those costs would not be covered under the formulary in the Health Canada backgrounder.
You can see that organizations advocating for contraception coverage were pleased with the list. However, organizations representing Canadians with diabetes found the list most inadequate.
Monica Kocsmaros, the Chief External Relations Officer at the Juvenile Diabetes Research Foundation, told the Social Affairs Committee:
. . . based on consultations with health care providers and those living with Type 1 . . . we would like to see the ultimate list that is developed reflect what is in the clinical practice guidelines established by Diabetes Canada. It is important that physicians have therapeutic options to address the wide variations in individual patient responses to and tolerance of any particular drug [and] that patients can access these, as one insulin may work well for one person and not another. It is very individualized care. And as health care providers refer to these clinical practice guidelines, the insulin listed on them should be available for patient care across the board.
Laura Syron from Diabetes Canada noted:
The limited formulary makes individualized care nearly impossible and may negatively impact our health-care system and the health of people living with diabetes by offering sub-optimal therapies . . . . Also, a national pharmacare program with a limited formulary has the potential to impact choice; health-care providers may look to the formulary as a definitive list without collaborating with the person living with diabetes and discussing all therapeutic options.
In a brief to the Social Affairs Committee, the Canadian Generic Pharmaceutical Association expressed concern about the limited formulary. They wrote the following:
CGPA and its Biosimilars Canada division are concerned that the limited list of drugs covered under the pharmacare plan will lead to sub-optimal prescribing to the medicines made available to the public for free, leading to sub-optimal health outcomes for patients. We are also concerned that the lack of a comprehensive approach to universal coverage may provide a disincentive for public drug plan formularies to continue their coverage of a broad range of prescription medicines, and provide a disincentive to expand coverage to include new drugs in the future. These same concerns also apply to employer-sponsored drug plans.
At committee, I asked Mr. Keon the following:
What happens to a diabetes patient, for example, who has tried maybe 10 different drugs? None have been very effective, and then they try the eleventh drug, it’s effective and they want to stay on that drug. But then they go to the universal plan, and that drug is not in that formulary.
Mr. Keon replied, “We would be concerned that they wouldn’t have full coverage.”
A huge potential unintended consequence is that employers may stop providing coverage for diabetes and contraceptive drugs in their workplace benefit plans. Ms. Syron from Diabetes Canada used herself as an example. She said:
I’m on two drugs to manage my diabetes. One is on the current formulary attached to this legislation and one is not. Right now, the one that is not covered is covered by my private insurance.
If my private insurance decided to stop covering that, then I would have to pick up that cost myself.
The unintended consequences would be that, financially, people may actually be worse off in terms of being able to afford the drugs. The very purpose of this bill is to get more people on the right drugs, but the unintended consequence could be that fewer people are on the right drug . . . .
Stephen Frank, the President and CEO of the Canadian Life and Health Insurance Association, said:
For the majority of Canadians, this legislation as it is currently written will eliminate existing prescription drug coverage paid by employers for these medications. It will limit choice. It will use scarce federal dollars to replace existing coverage, and it will leave a huge gap of uninsured Canadians who rely on other medications beyond diabetes drugs and contraceptives.
When I asked the minister about this concern, he said, “On the idea that people would lose coverage, I don’t see that. People have a choice.”
I replied:
. . . they might not have a choice because their private insurer might say, “Sorry, we don’t cover it any longer. Go to the province or the feds and get covered.”
That is the point. You’re saying that I, as an individual — for example, I have private insurance — have the choice to stay with my private insurer or go to the public insurer, meaning the federal government and the provincial arrangement. However, my private insurer might no longer cover me. In fact, it might start to be a gradual process of loss of private insurance.
The minister insisted that this would not happen. However, his eleventh hour letter to the Chair of the Standing Senate Committee on Social Affairs, Science and Technology on Friday, September 27 indicates that Canadians with private insurance are already on track to lose their coverage for diabetes and contraceptive drugs.
At second reading, I pointed out that Bill C-64 includes few definitions of important concepts in this program, which has led to unnecessary confusion.
Indeed, the Standing Senate Committee on Social Affairs, Science and Technology heard from almost all our witnesses that Bill C-64 would have been a much better bill had it included important definitions to add clarity instead of maintaining confusion. Even the key terms of “universal,” “single-payer” and “first-dollar” have not been defined. Suggestions were made to broaden the definition of “pharmacare” to include the critical role of pharmacy services, which have been completely omitted.
When asked whether a bill that limits drug coverage to those who have no coverage would go against the principle of universality, the Parliamentary Budget Officer, Mr. Giroux, responded, “That’s a good question. It depends on how you define universality.”
Professor Matthew Herder, the Director of the Dalhousie Health Justice Institute at Dalhousie University, has studied and written extensively on the issue of pharmacare. He called this bill “. . . fundamentally ambiguous.”
Asked by the chair whether this bill, ambiguities and all, is better than no bill at all, Professor Steven Morgan, an economist and professor of health care policy at the University of British Columbia, said:
As the legislation is currently written, I think no legislation is better than this legislation. I say that as someone who has spent 30 years working on this file in Canada.
Confronted with the same question, Professor Marc-André Gagnon, a political economist with Carleton University’s School of Public Policy and Administration, replied, “Sadly, I don’t know.”
This bill’s lack of definitions only adds to its opacity and ambiguity.
At second reading, I raised the concern that the national universal pharmacare policy envisioned by Bill C-64 infringes on provincial jurisdiction and complicates or interferes with programs that the provinces and territories already have in place.
In a press release issued at the close of the Council of the Federation meetings in Halifax in July, Canada’s premiers reiterated their wish for the federal government to stay in its lane. They said:
Federal engagement with provinces and territories has become increasingly limited and inconsistent, as the federal government seeks to unilaterally advance programs in areas of provincial and territorial jurisdiction.
Our federation works best when all orders of government respect constitutional authority. In recent years, federal actions have repeatedly encroached on provincial/territorial jurisdiction without adequate consultation, collaboration or funding. When the federal government unilaterally overreaches through legislation, regulation, selective investments and taxation in areas of provincial and territorial responsibility, Canadians end up with ill-suited one-size-fits-all programs that are underfunded and do not meet the needs of residents in all regions of the country. . . .
At a press conference at the close of their summer meeting, Premier François Legault of Quebec observed:
Federal interference in provincial jurisdictions is a problem which is becoming worse and worse from budget to budget. . . . These intrusions create management problems. They double the size of bureaucracy. This is not desirable.
Premier Dennis King of Prince Edward Island lamented what he called “jurisdictional creep.” He said:
I think every Canadian would expect that all of their levels of government should try to pitch in and do everything they can to make their lives a little bit easier, but it gets . . . a little bit frustrating with the duplication and the overstepping . . . of the federal government.
In an interview with CPAC, Newfoundland and Labrador Premier Andrew Furey said:
If the federal government decides that it wants to have an impact on what could arguably be provincial jurisdiction . . . tell us how we can be partners. But to wake up one morning and hear that, you know, there’s potential pharmacare or potential dental care, which is . . . provincial jurisdiction, with no consultation or collaboration . . . I mean, that’s where I have concern about the shape-shifting of the Constitution.
In an interview with the New Brunswick Telegraph-Journal, Premier Blaine Higgs said the following of the federal-provincial relationship:
Things are strained to say the least . . . . And I would say that it’s dysfunctional in many ways.
Premier Higgs added that there hasn’t been a general meeting between the premiers and the Prime Minister for years. Their last meeting, in February 2023, dealt solely with health care.
B.C. Premier David Eby echoed the call for a meeting between the premiers and the Prime Minister. He told reporters:
It’s not about money. It’s not about additional funding, it’s about, can we co-ordinate nationally on these areas of shared interest?
Premier Eby continued, “And that is where it sometimes feels like we’re just beating our head against a wall . . . .”
And at the Standing Senate Committee on Social Affairs, Science and Technology, Alberta’s Minister of Health, Adriana LaGrange, said:
The federal government continues to bring forward health initiatives as a way of pursuing its own political goals when its actual responsibility is to act as a good partner on the long-term sustainability of health initiatives and improved health outcomes. Provinces and territories have exclusive jurisdiction over the planning, organization and management of our health care systems. . . .
. . . The federal government must respect provincial and territorial jurisdiction and the decisions we make. Federal initiatives, such as pharmacare, must be developed in a way that is truly collaborative, aligns with provincial and territorial priorities, and respects jurisdictions.
On Tuesday, in this chamber, when Senator Gignac spoke to this bill, he said, “. . . Ottawa should be less critical and show some humility before encroaching on provincial jurisdiction with new initiatives.” I agree.
There are also other outstanding concerns regarding Bill C-64, such as the administration of pharmacare, the composition of the committee of experts and the powers, functions and governance structures of the Canadian Drug Agency. I thank my colleague Senator Osler for capably reminding us of these weaknesses in the legislation.
In conclusion, colleagues, I am not convinced that Bill C-64’s approach to pharmacare is prudent, not fiscally nor as policy. I would have fully supported a bill that ensured pharmacare coverage for the most vulnerable — those who have no insurance or who are underinsured. But with this bill, the government will spend at least half of its pharmacare budget for Canadians who already have comprehensive coverage with their own private plans. The Parliamentary Budget Officer made this point decisively in his testimony before the Social Affairs Committee.
It is relevant here to remember my earlier point about universality. Universal pharmacare coverage does not mean that the state is exclusively responsible for prescription drug costs, nor does it mean that the plan must be publicly administered. France, Germany and the Netherlands have universal, statutory, multi-payer pharmacare systems that have more in common with the Quebec model than with the model proposed in Bill C-64.
The Social Affairs Committee heard persuasive evidence that Bill C-64 could result in the erosion of private insurance, leaving many Canadians worse off than they are today — with a very restricted formulary, drug shortages and reduced pharmacy services.
Frankly, for myself, colleagues, it could not be clearer: I cannot support Bill C-64 as it is currently written. Thank you.
Hon. Leo Housakos: Thank you, Senator Seidman, for your very thoughtful speech. It is evidently clear that this is a bill that is a lot more aspirational than it is logical, pretty much like I guess the Trudeau government in general.
Yesterday, we had a colleague invoking the founders of medicare in this chamber, Tommy Douglas, Prime Minister Diefenbaker and Pearson. I was wondering: What do you think the founders of medicare would have to say about the fact that today we have a government over the last nine and a half years that not a single fiscal year did they transfer over funds that were equitable to what the provinces spend in providing health care? If anything, they have been reducing the transfer payments to health care considerably over the last nine years, and, of course, not respecting the Canada Health Act, which has a number of fundamental principles including being comprehensive, accessible and, most importantly, universal.
With more than 6 million Canadians and families without doctors today, in 2024, what would Tommy Douglas, Prime Minister Diefenbaker and Prime Minister Pearson have to say about the state of health care?
Hon. Judith G. Seidman: Thank you. That’s a big question. I have to tell you that probably they would say what all of us say, and that is that the health system is failing us badly. I think finally Canadians are getting the courage to say that the system isn’t working. How many of us have family members, friends and neighbours who struggle with the health system? They don’t have general practitioners, for example. I know countless numbers of people who go to clinics and don’t have any continuity of care as a result. We all hear it and read it. I think we are gradually recognizing that the system is failing us.
We have been very sensitive about our health system. We have praised it, loved it and there is no question that the concept was excellent. But if we look around to the rest of the world now, we’ll see that a lot of countries that started with the same system as Canada started with have moved beyond it and have found other ways of ensuring their population receives the kind of care they need.
Hon. Flordeliz (Gigi) Osler: Senator Seidman, during the Standing Senate Committee on Social Affairs, Science and Technology’s study of Bill C-64, we received briefs from the Canadian Organization for Rare Disorders and the Canadian Forum for Rare Disease Innovators. They outlined the concerns that implementation of a national pharmacare program could further delay the implementation of the National Strategy for Drugs for Rare Diseases, which is referenced in clause 5 of Bill C-64. Have you reviewed the briefs, met with any of the groups and can you share any of your thoughts or concerns about delaying the implementation of the rare disease strategy?
Hon. Judith G. Seidman: Actually, yes, I can say that I have read the briefs, but I also did meet with representatives of the Canadian Organization for Rare Disorders, Dr. Durhane Wong-Rieger, who is the president of that organization. I do say that I noted at second reading that the government announced investment of up to $1.5 billion over three years in support of the National Strategy for Drugs for Rare Diseases. That was in March of 2023. And $1.4 billion of that $1.5 billion was to be allocated through bilateral agreements. The rare disease community really celebrated; they were very excited about that. But it has been more than a year and a half and only one bilateral agreement has been signed.
In the other place, Dr. Durhane Wong-Rieger, the President and CEO of the Canadian Organization for Rare Disorders, warned the Standing Committee on Health that given the lack of promised progress on rare diseases, what does it say in terms of the prospects for the success of the pharmacare legislation? In fact, she said it is unconscionable and unethical to introduce a program designed to transform and save lives and then fail to execute on it.
I have to say I totally agree that the government has to follow through on its commitments to the rare disease community and ensure that the bilateral agreements for rare disease drug funding are not overshadowed by this new situation where they now have to negotiate bilateral agreements because of Bill C-64.