grootendorst national pharmacare€¦ · Universal drug plan deductibles, by province Province...
Transcript of grootendorst national pharmacare€¦ · Universal drug plan deductibles, by province Province...
Doweneedanationalpharmacareprogram?
PaulGrootendorstLeslieDanFacultyofPharmacy,UniversityofTorontoDepartmentofEconomics,McMasterUniversity
December2017
overview
• Currentdruginsurancecoveragearrangements• Criticismsofcurrentarrangements• Possiblewaysforward
Currentdruginsurancecoveragearrangements
Currentdruginsurancearrangements
• Privatelyfunded• Groupcoverage(mostlyemployer-sponsored)[68%ofCanadians]
• http://clhia.uberflip.com/i/878840-canadian-life-and-health-insurance-facts-2017/1?
• Thesebenefitsaretaxfree• $1paidaswagetoemployee:taxedatindividual’smarginalrate
• marginaltaxratevarieswithincome• Marginalrate>50%insomeprovincesonincomeover$200,000
• http://www.taxtips.ca/marginaltaxrates.htm
• $1paidasdrugbenefitstoemployee:notax
Currentdruginsurancearrangements
• Twomaintypesofprivategroupcoverageavailable• administrativeservicesonly(ASO)plans(over½ofprivatecoverage)
• Groupsponsor(anemployer,university,etc.)paysfordrugcosts.• Athirdpartyfirmrunstheplan,handlingtransactionsbetweenpharmacyandemployer.
• http://www.benefitscanada.com/benefits/health-benefits/the-basics-of-aso-34925
• conventionalinsuredgroupbenefits• thegroupsponsorpaysapremium;inexchange,theinsurerwillcoverdrugcostsincurredbyplanbeneficiaries
• Thereisprivatedruginsuranceavailabletoindividuals,butthiscoverageisquitelimitedowingtoadverseselectionproblems
Currentdruginsurancearrangements
• Publiclyfunded• Provincialgovernmentdrugplans
• Seniors65+[15%ofCanadians]• Welfarerecipients[about5-6%]• Longtermcareresidents[1%]• Otherswithhighoutofpocket(OOP)drugcostsrelativetoincome(“universal”plans)[about5%]
• Federalgovernmentdrugplansforfirstnations,military[3%]
Currentdruginsurancearrangements
• Almostallplansrequirebeneficiarypayforportionofdrugcost• OOPpaymentsrepresent23%oftotalrx drugcosts• NationalHealthExpenditureDatabase,2015,CanadianInstituteforHealthInformation
• Amountpatientrequiredtopayforaprescriptioniscalledthe“copayment”or“copay”• Beneficiarycopaytakesavarietyofforms.Examples:• Deductible =beneficiarypaysfirst$xperyearthenplancoverstherest
• Mostuniversal planshavedeductiblessetatsomefractionofhouseholdincome• Coinsurance =beneficiarypaysy%ofprescriptioncost
Universaldrugplandeductibles,byprovince
Province Deductible amount
BritishColumbia 2-4%ofnetfamilyincome1
Saskatchewan 3.4%oftotaladjustedfamilyincome2
Manitoba 2.97%-6.73%oftotaladjustedfamilyincome3
Ontario 4%ofnetfamilyincome4
Quebec $1,0295
NovaScotia 0-33%ofadjustedfamilyincome6
Newfoundland 5,7.5or10%ofnetfamilyincome7
PEI 3,5,8or12%oftotalhouseholdincome8
Alberta9 Nodeductible.Premium+30%co-paytomax$25/rx
NewBrunswick10 Nodeductible.$800annualpremium+30%co-paytomax$30/rx
$12,598
$6,378
$10,235
Rxdrugspendingshares,Canada,2015,andspendingin$millions
public outofpocket privateinsurer
SourceCIHINHEXhttps://www.cihi.ca/en/spending-and-health-workforce/spending/national-health-expenditure-trends
Currentdruginsurancearrangements
• Provincialplansaremoreactivelymanagedthanprivateplans• Provincescollaboratetonegotiateondrugpricesviathepan-CanadianPharmaceuticalAlliance• http://www.conseildelafederation.ca/en/initiatives/358-pan-canadian-pricing-alliance
• Theyemploytherapeuticsubstitution&otherformularyrestrictions• Routinelyuseeconomicappraisals
• Privateplanstypicallylessmanagedthanpublicplans;relymoreonbeneficiarycopayments
FormularyrestrictionsinpublicplansExample:
OntarioDrugBenefit(ODB)planwillreimburselevofloxacinonlyincertainconditions,includingfailureonfirstlinetherapy(amacrolide)
https://www.healthinfo.moh.gov.on.ca/formulary/
Economicappraisalinpublicplans
• TheCanadianAgencyforDrugsandTechnologiesinHealth(CADTH)performsaCommonDrugReview(CDR)• TheCDRreviewsevidenceoncostandeffectivenessofnewdrugsandmakesformularylistingrecommendationstothepubliclyfundeddrugplans• https://www.cadth.ca/about-cadth/what-we-do/products-services/cdr
• Newdrugsthatdonotoffersufficientcostoreffectivenessadvantagesovercompetitorsarenotrecommendedforfunding
Criticismsofcurrentarrangements
Criticisms
1. privateplanadministrativecostsaretoohigh2. drugpricespaidbyprivate&publicplansaretoohigh3. privateplansimposefewformularyrestrictions4. existingcoverageleadstopoorprescribingchoices5. consolidationofplanswouldbetterspreadriskforspecialtydrugs6. privateinsurersareconflicted7. oursystemofdrugcoverageisinequitable8. patientcopaysreducemedicationadherence
1.privateplanadministrativecostsaretoohigh
Administrativecostsforprivateplansarehigherthanforpublicplans.
Privatehealthcareplans10xtimesmorecostly
“Canada'snationalhealthinsuranceprogramhadoverheadof1.3percent;theoverheadamongCanada'sprivateinsurerswashigherthanthatintheUnitedStates(13.2percentvs.11.7percent).”
Woolhandler S,CampbellT,Himmelstein DU.CostsofhealthcareadministrationintheUnitedStatesandCanada.NewEnglandJournalofMedicine2003;349:768–75.
Administrativecostsforprivateplansarehigherthanforpublicplans.
Privatehealthcareplans5xtimesmorecostly
“Whileadministrativecostscomprisedonly3.2percentofpublicspendingonhealthcareinCanadain2009,administrationcostsrepresented15.1percentofspendingfinancedthroughprivateinsurance(CIHI2012).”
MorganS,Daw J,LawMR.RethinkingPharmacare inCanada.CDHoweInstituteCommentary,2013.
https://www.cdhowe.org/pdf/Commentary_384.pdf
Administrativecostsforprivateplansarehigherthanforpublicplans.
Privatedrugplans4xtimesmorecostly
“Theadministrativefeesforpublic[drug]plansinOntarioandQuebecwereestimatedat2%,whereastheywere8%forprivateplans.”
GagnonMA,HébertG.TheEconomicCaseforUniversalPharmacare.CanadianCentreforPolicyAlternatives,2010
https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2010/09/Universal_Pharmacare.pdf
Administrativecostsforprivateplansarehigherthanforpublicplans.
PotentialsavingsfromaNationalPharmacareplan
“Theadministrativecostsofthesingle-payerPharmacaresystemwouldbe$1billionto$2billionlessthanthecostofamixed,private-publicsystemofdrugcoverage.”
MorganSG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.Vancouver,PharmaceuticalPolicyResearchCollaboration,UniversityofBritishColumbia,2015.
http://pharmacare2020.ca
Administrativecostsforprivateplansarehigherthanforpublicplans.
Assessment
Acentralizednationalplanwouldreducepercapitaadmincosts:• nomarketing,sellingor(fornon-ASOplans)underwritingcosts• couldbesomescaleeconomiesin
• negotiatingpricesfordrugs,wholesaledistributionandpharmacistservicefees
• decisionmakingarounddrugcoverage
“Thewastefulduplicationcausedbythevariedformularylistingprocessesemployedbyeachseparateprovinceandterritoryincreasesadministrativecostsforbothdrugplansandpharmaceuticalmanufacturers…”
KeonJ.Nationalpharmacare:let’sgetitright.TheHillTimes.2015.• https://www.hilltimes.com/opinion-piece/2015/04/06/national-pharmacare-lets-
get-it-right/41654
Administrativecostsforprivateplansarehigherthanforpublicplans.
Assessment
Howeverprivatefirms(suchasBlueCross)handleprescriptionclaimsadjudicationforsomeoftheprovincialpublicplans.Thesefirmsseemquiteefficientatthistask.
Overall,unclearhowmuchadminsavingswouldresultfromcentralizingdrugcoverage.Likelywellunder$1B.
2.drugpricespaidbypublicandprivateplansaretoohigh
Drugpricespaidbyprivateplansarehigherthanforpublicplans.
“Drugcostsareaprimeculprit.Provincesarefinallyactingontheirpartthroughnegotiatingdiscounts,greateruseofgenericdrugsandlimitstothefeestheyarepreparedtopay.Butmuchofthecostofdrugsisbornebyprivatesectoremployersthroughtheiremployeebenefitplans.Theseemployersfeelandactasthoughtheyarepowerlesstoreininthecostincreasesthathavebeenrunningaround10percentperyear.”
DonDrummondMatthewsFellowinGlobalPolicyandAdjunctProfessor,Queen’sUniversityForwardtoStevensonH.Anendtoblankcheques:Gettingmorevalueoutofemployerdrugplans.Reformulary Group2011.
http://www.reformulary.com/files_docs/content/pdf/en/end_to_blank_cheques.pdf
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
“drugpricesremainmuchhigherinCanadacomparedtocountriesotherthanSwitzerlandandtheUnitedStates”GagnonMA,HébertG.TheEconomicCaseforUniversalPharmacare.
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
“Intermsofdrugprices,Canada’smulti-payersystemisamongthemostexpensivesystemsintheworld,becauseitdiminishesourpurchasingpower.
ThepricesofgenericdrugsinCanadaarenearlydouble(79%higherthan)themedianofpricesfoundinotherOECDcountriesandmorethanfourtimes(445%)higherthanthebestavailablepricesintheOECD.
Similarly,thepricesofbrand-namedrugsinCanadaare30%higherthanincomparablecountriesliketheUnitedKingdom.”
MorganSG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
“Overall,Canadiansspentjustover$22billiononthemedicationsincludedinouranalysisduringthefiscalyear2012/13.Underourbasescenarioestimates,totalspendingontheseprescriptiondrugsunderasystemofuniversalpubliccoveragewouldbeabout$15.1billion,representingadeclineof$7.3billionor32%.”
MorganSG,LawM,DawJR,AbrahamL,MartinD.EstimatedcostofuniversalpubliccoverageofprescriptiondrugsinCanada.CanadianMedicalAssociationJournal2015187(7),491-497.
http://www.cmaj.ca/content/early/2015/03/16/cmaj.141564.full.pdf+html
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
Howtoreducedrugcostsbyonethird?
Lowerdrugprices(2/3ofsavings)
“…weuseddrugpricesfoundinCanada’sofficialcomparatorcountriestogaugetheextentthatbrandname andgenericdrugpricesmightdecreaseunderauniversalpublicdrugplan.”
Moreformularyrestrictions(1/3ofsavings)
“Weusedproductselectiondecisionsseenunderexistingprovincialdrugplanstoestimatechoicesbetweenbrand-nameandgenericdrugsunderauniversalpublicdrugplan.”
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
Assessment
““Intermsofdrugprices,Canada’smulti-payersystemisamongthemostexpensivesystemsintheworld,becauseitdiminishesourpurchasingpower.”
MorganSG,etal.Pharmacare2020
Wealreadyhavelotsofpurchasingpower
NewZealandgetsverylowpriceswithapopulationofabout4.5million;theODBprogramalonepaysforthedrugsofabout3millionpeople.• http://www.health.gov.on.ca/en/public/programs/drugs/publications/op
dp/docs/odb_report_13.pdf
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
Assessment
Unclearifthereismuchroomforfurthercutstogenericdrugprices
1. GenericdrugpricesinCanadahavebeenreducedtoaslowas15%ofthereferencebrandeddrugprice.• http://www.canadaspremiers.ca/pan-canadian-pharmaceutical-alliance/
2. MarketentrycostsforgenericdrugsarehigherinCanadaowingtotrade-dressconventionsandpatentlitigationrisk• http://www.canadiangenerics.ca/en/advocacy/docs/10.24.12%20Tendering%20Gen
eric%20Drugs%20-%20What%20Are%20the%20Risks_FINAL.pdf
3. Distributioncostsarealsohighergiven10,000pharmaciesspreadoutoverCanada’sgeography• http://napra.ca/national-statistics
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
Assessment
“thepricesofbrand-namedrugsinCanadaare30%higherthanincomparablecountriesliketheUnitedKingdom.”
MorganSG,MartinD,GagnonMA,etal.Pharmacare2020
Unclearifthisisthecase.Internationalpricecomparisonsaredifficultbecauseofhiddenrebatesanddiscounts
Howeverthedatawedohaveindicatesthatpatented(mostlybrand)pricesinCanadafor2016aboutsameasthosepaidinUK(seenextslides).
Unclearifwecanreducebrandpricesby30%
Canadiandrugpricesarehigherthanpricespaidincomparablecountries
Assessment
Letscomparepatentedbrand-namedrugpricesinCanadatopricesincomparablecountriesusingdatafrom2016PatentedMedicinePricesReviewBoard(PMPRB)annualreport:
• PatenteddrugpricesinGermany&Switzerland9%higherthaninCanada• PricesinandUKaboutsameasinCanada• PricesinItaly,Sweden5to8%lessthanCanadianprices• PricesinFrance77%ofCanadianprices
PMPRB2016AnnualReporthttp://www.pmprb-cepmb.gc.ca/en/reporting/annual-reports
AverageForeigntoCanadianPriceRatiosforPatentedDrugs,byCountryandYear1987-2016.Countriesrestrictedtothosewithnationaldrugplans.
DataSource:PMPRBAnnualReports
4060
8010
012
040
6080
100
120
1990 2000 2010 2020 1990 2000 2010 2020 1990 2000 2010 2020
France Germany Italy
Sweden Switzerland UK
pric
erat
io
yearGraphs by country
3.privateplansimposefewformularyrestrictions
privateplansimposefewformularyrestrictions
“privatedrugplans’formularieswelcomeallnewexpensivedrugseveniftheyarenomorebeneficialtopatientsthancheaperexistingdrugs.”
GagnonMA,HébertG.TheEconomicCaseforUniversalPharmacare.
privateplansimposefewformularyrestrictions
“only19%ofCanadianemployeeswithdrugbenefitplansappeartohavemanagedformularies,suggestingthismightbeamajoropportunityforreducingprivatesectordrugcosts,againwithoutlimitingpatients'accesstomedicines.”
“Cost-shiftingmechanisms,includingdeductibles,co-paymentsandfixeddispensingfees,aremorewidelyused”
Kratzer J,McGrail K,Strumpf E,LawMR.Cost-ControlMechanismsinCanadianPrivateDrugPlansHealthcarePolicy2013Aug;9(1):35–43.
http://www.longwoods.com/content/23479
privateplansimposefewformularyrestrictions
Adissentingview:
“Forcing24millionCanadianswithprivatedrugplanstoaccepttheinferiorcoverageprovidedbypublicdrugplanscouldhaveprofoundhealthandeconomicimplications.”
“Reducedaccesstonewerandbettermedicineswillleadtoworsehealthoutcomesandadditionalcostsforthehealthsystem.“
SkinnerBJ,Rovere M,Mohindra M,TranK.Pharmacare:whatarethecostsforpatientsandtaxpayers?CanadianHealthPolicyInstitute,September24,2015.
http://www.canadianhealthpolicy.com/product_articles/pharmacare--what-are-the-costs-for-patients-and-taxpayers-.html
%ofnewdrugscoveredinprivatevpublicdrugplans,byyear
Averagewaitindaysforcoverageofnewdrugsinprivatevpublicdrugplans,byyear
privateplansimposefewformularyrestrictions
Assessment
Increasedmanagementofprivatesectordrugplanscouldreducecosts.
Indeed,thisisgraduallyhappening:
Reformulary Group,acompanyfoundedbyaformerODBexecutiveofficer,offerstohelpmanageprivateplanformulariesandsavemoney.• https://www.youtube.com/watch?v=AtvqGL4WXfo• http://www.reformulary.com/index_en.php?page=home
ManulifeDrugWatch• http://www.theglobeandmail.com/report-on-business/manulife-
launched-drugwatch-program-to-scrutinize-coverage-of-pricey-drugs/article27265898/
privateplansimposefewformularyrestrictions
Assessment
Skinneretalmakeunsubstantiatedclaimsrehealthconsequencestopublicplanbeneficiariesof:• theuseofformularyrestrictionsonnewdrugs• delaysinlistingnewdrugsThispapercreatestheimpressionthatanyformularymanagementisharmful.
Evidencetosupporttheseclaimswouldbehelpful.
4.poorprescribingchoices
existingcoverageleadstopoorprescribingchoices
Thereis“inadequatemonitoringofprescribingpracticesandrelatedhealthoutcomesinCanada”
“multiplicityofdrugplansinCanadacanalsocreateaburdenonprescribingdoctorsandinhibitsafeandappropriateprescribingpractices”
“Anestimated1in3elderlyCanadiansreceivesprescriptionsfordrugsknowntoposehealthrisksforolderpatients.Andanestimated1in6hospitalizationsinCanadacouldbepreventedifprescriptiondrugswereusedmoreappropriately.”
Morgan,SG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
existingcoverageleadstopoorprescribingchoices
“EstablishapubliclyaccountablebodytomanagePharmacare,onethatintegratesthebestavailabledataandevidenceintodecisionsconcerningdrugcoverage,drugprescribing,andpatientfollow-up.”
“ByconsistentlyusingevidenceandinformationsystemstoguidedrugcoverageandprescribingforallCanadians,aPharmacareprogramcouldrealisticallyreduceby50%theexistingproblemsofmedicineunderuse,overuse,andmisuse.”
Morgan,SG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
existingcoverageleadstopoorprescribingchoices
Assessment
Proposaltotrackprescriptiondruguseandtheoutcomesofprescriptiondrugusewouldprovideimportantinfoonrealworlddrugsafetyandeffectiveness.
In2012,abouttwo-thirds(65.9%)ofseniorsonpublicdrugplanshadclaimsfor5ormoredrugclasses,andmorethanone-quarter(27.2%)ofseniorshadclaimsfor10ormoredrugclasses.• https://www.cihi.ca/en/types-of-care/pharmaceutical-care-and-utilization/most-
seniors-take-5-or-more-drugs-numbers-double
In2007-2011,about11%of45- to64-year-oldstookatleast5prescriptionmedicationsconcurrently.• http://www.statcan.gc.ca/pub/82-003-x/2014006/article/14032-eng.pdf
existingcoverageleadstopoorprescribingchoices
Assessment
“Anestimated1in3elderlyCanadiansreceivesprescriptionsfordrugsknowntoposehealthrisksforolderpatients.”
Morgan,SG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
Unclearifthesehealthrisksareentirelyavoidable– manydrugsproducebenefitsandharms,andareusedbecauseofanticipatednet benefit.Ontheotherhand,poorprescribingcontinuestobeaproblem,amongseniorsandchildren
Unclearifanationalpharmacare (NP)planwillreducemedicationchoicestoprescribersgiventhatprivateplanscanaugmentcoverageprovidedbyNPplan
5.Riskpoolistoosmall
Riskpoolistoosmall
“Agrowingnumberofspeciality drugs— whichcancost$50,000oreven$500,000perpatientperyear— arenowavailableinCanada.Whereasthesetypesofdrugsaccountedfornegligibleexpensesadecadeago,theynowaccountformorethan25%ofprivatedrugspendinginCanada.”
“PharmacarewouldalsocreatethelargestpossibleriskpoolforthecostsofspecializedmedicinesinCanada,whichisthebestwaytoprotectbothpatientsandemployersfromthecostofrarebutexpensivemedicalneeds.”
Morgan,SG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
Riskpoolistoosmall
Assessment
Noquestionthatcostofbiologicsandotherspecialtydrugsrepresentsrisktosmallemployers
Thatiswhyprivateplanshavestartedtopoolsuchrisks• http://cdipc-scmam.ca
Nationalplanwouldallowforgreaterriskpoolandthusfurtherreducerisktoindividualsandplansponsors.
6.Privateinsurersareconflicted
Conflictofinterest
“Thereasonforthesteepriseinpremiumsissimple:mostoftheprivatedrugplansaremanagedbyinsurancecompanieswhichareusuallycompensatedintheformofapercentageofexpenditures.Asaresult,theirfinancialincentiveisnottotrytostemthegrowingcosts,buttoincreasethem.”
GagnonMA,HébertG.TheEconomicCaseforUniversalPharmacare
Conflictofinterest
“therearefewtonoincentivesfacingCanadianinsurerstocontrolcosts.Insurancecompaniestypicallyearnincomebasedonadministrationchargesthatareleviedasapercentageoftotalplanexpenditures.”
Kratzer J,McGrail K,Strumpf E,LawMR.Cost-ControlMechanismsinCanadianPrivateDrugPlansHealthcarePolicy2013Aug;9(1):35–43.
Conflictofinterest
Assessment
• Thereare>20privateinsurancecarriersinCanada• Competitionbetweenthemforgroupcontractsisrobust
• http://healthydebate.ca/opinions/demystifying-private-drug-plans
• Ifthereislittleappetiteformanagedplansthenthatmustreflectdecisionsofplansponsors(employers,unions,etc.)• Possiblethatsponsorsdon’tfinditworthwhiletobargainwithdrug
planbeneficiariesoverplandesign.• See:O’Brady,GagnonandCassels.Reformingprivatedrug
coverageinCanada:Inefficientdrugbenefitdesignandthebarrierstochangeinunionizedsettings.HealthPolicy2015• https://www.sciencedirect.com/science/article/pii/S01688510140
03121
7.oursystemofdrugcoverageisinequitable
Inequitablesystemofdrugcoverage
Twotierdrugcoverage
Canadianswithgoodjobshavecomprehensive,andtax-freeprivatedrugcoverage
Inequitablesystemofdrugcoverage
Twotierdrugcoverage
Canadianswithlowpayingjobs,orthoseunabletojoinagroupplanhaveeither• privatecoveragethatmayrequire
substantialcopayments,or• nocoverageandthusmustrelyon
provincial“universal”plans
Shareofhouseholdbudgetspentonrxdrugs,byhouseholdbudget,2006Households<65yearsnotreceivingsocialassistance
MacLeodetalOpenMedicine 2011http://www.openmedicine.ca/article/view/381/368
Inequitablesystemofdrugcoverage
Assessment
• ThereisnoquestionthatmoreaffluentCanadianshavebettercoverage• Financialburdenofprescriptioncostsfallsmostheavilyonlessaffluent
households.• AppearsthatmostCanadiansagreethateveryoneshouldhavecoverage
foratleastaminimumsetofdrugs
8.patientcopaysreducemedicationadherence
patientcopaysreducemedicationadherence
“Surveyshaveshownthat1in10Canadiansdonottaketheirmedicinesasprescribedbecauseofcosts.
Thisaffectsnearly1in4Canadianhouseholds.”
Morgan,SG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
patientcopaysreducemedicationadherence
Underinsuranceactuallycostshealthcaresystem
“Whenpatientsfacefinancialbarrierstonecessaryprescriptiondrugs,itcostsallCanadians.”
“Becausepatientsoftendonotdirectlyandimmediatelyfeelthebenefitsofpreventivetherapies—suchasmedicinestoreducetheriskofheartattacksandstrokes—theyoftenchoosetostoptakingthesemedicineswhenfacedwithassociatedcosts.Thisresultsinpredictableincreasesintheuseofotherhealthcareservices,whichareoftenmoreexpensivethanthemedicineswouldhavecostinthefirstplace.”
Morgan,SG,MartinD,GagnonMA,etal.Pharmacare2020:ThefutureofdrugcoverageinCanada.
patientcopaysreducemedicationadherence
Assessment
• UnclearifNPinCanadawouldprovidedrugstopatientsatnocost
• Othercountrieswithnationaldrugplansrequirepatientcontributions
• Asaresultthereiscostrelatednon-adherenceincountrieswithnationaldrugplans
Source: D. O. Sarnak, D. Squires, G. Kuzmak, and S. Bishop, Paying for Prescription Drugs Around the World: Why Is the U.S. an Outlier? The Commonwealth Fund, October 2017.
patientcopaysreducemedicationadherence
Assessment
• 100%coverageforatleastaminimumsetofdrugsisagoodidea.• Appropriatepharmacotherapyforchronichealthproblemsnowmay
preventfutureuseofmedical/hospitalservices• See:”CanValue-BasedDesigninPharmacySaveMoneyandCut
HeartAttacks?”• http://www.managedcaremag.com/archives/2011/2/can-value-
based-design-pharmacy-save-money-and-cut-heart-attacks• http://vbidcenter.org/about-us/
• Expansionofcoveragetominimumstandardsseemswarranted
Possiblewaysforward
NationalPharmacareasperMorganetal
• Tax-financedsystemwithfederalgovernmentcontributionstoencourageprovincialparticipation• “Evidence-based”formulary• Electronicprescribing.
Woulditaddresstheseproblems?
1. privateplanadministrativecostsaretoohigh2. drugpricespaidbyprivate+publicplansaretoohigh3. privateplansimposefewformularyrestrictions4. poorprescribingchoices5. consolidationofplanswouldbetterspreadriskforspecialtydrugs6. privateinsurersareconflicted7. oursystemofdrugcoverageisinequitable8. outofpocketdrugcostsreducemedicationadherence
Woulditaddresstheseproblems?
• privateplanadministrativecostsaretoohigh• Wouldbelower,butlikely<$1B
• drugpricesaretoohigh• Limitedsavingsfromcutstogenericprices;perhapsmodest(10-15%?)savingstobrandprices
• privateplansimposefewformularyrestrictions• Certainly,butunclearifrestrictionsimposedbypublicplansaredesirable• QuestionofwhichdrugsarecoveredunderNPwouldbecontentious
Woulditaddresstheseproblems?
• poorprescribingchoices• Seemsthattheinformationsystemsandmanagedformularyproposalcouldimproveprescribingappropriateness• UnclearifNationalPlanisrequired
• consolidationofplanswouldspreadriskforspecialtydrugs• Yes:thiswouldfurtherspreadriskandallowforcreativeprice-quantitycontracts
• privateinsurersareconflicted• Insuranceprovidersarenotconflicted.
Woulditaddresstheseproblems?
• oursystemofdrugcoverageisinequitable• Agreed.Expansionofcoveragetounderinsuredwouldimproveequity
• outofpocketdrugcostsreducemedicationadherence• Yes– underproposedNPpatientdoesnotpayforprescriptionsandthatwouldincreaseadherence
Otherpossibility
• Example:Federallyadministeredandfinancedplanthatcovers100%ofcostoflimitedsetofessentialmedicinesforallCanadians• Provincialandprivateplanscansupplement• Advantages• Poolsbuyingpowerforthesedrugs– perhapsslightlybetterprices• Administrativesimplicitywith1insurerforcommonsetofdrugs• Fedscanhelpensuresecurityofsupply
• Issues• Whatdrugswillappearonthislist?
Howtofinancecosts?Severaloptions
• Generaltaxrevenues(primarilyconsumptionandincometaxes)• Dedicatedpersonalincome-contingenttax• Example:OntarioHealthPremium
• http://www.fin.gov.on.ca/en/tax/healthpremium/index.html• Premiumis$0forthoseearningupto$20,000• Premiumis$60forthoseearningupto$20,001to$21,000• Premiumis$900forthoseearning$200,600andover
• Dedicatedpayrolltax• Example:Ontario’sEmployerHealthTax(EHT)
• http://www.fin.gov.on.ca/en/tax/eht/• TheEHTratesvaryfrom 0.98%onOntariopayrolllessthan $200,000,upto 1.95%forpayrollinexcessof $400,000.