Prescription drug coverage system in need of ‘major overhaul’: CLHIA report

Recommends national minimum list of drugs to be covered for all Canadians
|hrreporter.com|Last Updated: 06/26/2013

The prescription drug coverage system in Canada is in need of a major overhaul, with unequal pricing, rising costs and a patchwork of drug coverage offered to Canadians, according to the Canadian Life and Health Insurance Association (CLHIA). If changes are not made soon, the system will not be around for future generations, it said.

"There is no question that the prescription drug system that exists today is badly in need of reform,” said Frank Swedlove, president of the CLHIA. "The current patchwork of systems across the country inflates costs, creates a great deal of confusion, and even worse, results in significant financial hardship for some Canadians with respect to the cost of drugs."

Employers face a number of issues due to prescription drug coverage. Costs are simply too high and at some point employers, and provinces, will no longer be able to sustain their plans, said CLHIA. Canada has the second highest drug costs per capita in OECD.

Cost pressures are likely to get worse, due to rapid increase in the number of very expensive drugs that treat rare diseases. Today, such drugs represent only one per cent of total claims but 15 per cent of total costs — this is forecasted to grow to over 25 per cent in just three years, according to CLHIA.

CLHIA has released a public policy paper — Ensuring the Accessibility, Affordability and Sustainability of Prescription Drugs in Canada — setting out actionable recommendations for reform. As a priority, the CLHIA recommends that:

• the federal agency that regulates prices for new drugs be fundamentally reformed to drive prices down
discussions start on creating a common, national, minimum list of drugs that will be covered for all Canadians
governments lead a discussion to work towards the creation of a new, collaborative, approach to approving and paying for very rare orphan drugs.

"We need to get the conversation started and believe that our recommendations will result in lower costs and improved access to prescription drugs for all Canadians,” said Swedlove. "Employers and individual Canadians should expect nothing less."

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