CLHIA-ACCAP

Investing in Canada's Health and Prosperity 5 ENSURING ACCESS TO AFFORDABLE PRESCRIPTION DRUGS IN CANADA INTRODUCTION Prescription drug coverage in Canada is a mixed public and private accountability and, for those with coverage, generally works well. The current system of drug coverage in Canada is not universal however, and does result in gaps in coverage across the country that is cause for concern. In addition, the continued rise in prescription drug costs is threatening the sustainability of coverage that currently exists. Of particular concern is the increasing incidence of very high cost and relatively rare drugs. For example, specialty drugs represent less than 1 per cent of total claims but are forecast to represent 25 per cent of total costs by 2015. In April 2012, the Canadian life and health insurance industry took action by announcing a national drug pooling agreement to share the costs of highly expensive and recurring drug treatments for all fully‐insured drug plans in Canada. As a result of this initiative, these employers will be insulated from the full financial impact of any high cost claims and they will be able to continue to offer such coverage to their employees. Twenty‐four insurance companies across Canada, that collectively represent 100 per cent of the supplementary drug market, have joined this pooling framework. In addition, Canadian life and health insurers have been aggressively introducing new and innovative solutions to the market to help better manage drug costs. PROVINCIAL INITIATIVES TO ADDRESS PRESCRIPTION DRUG COSTS On their end, the provinces have also been introducing new cost‐saving measures. For example, provinces have all engaged in aggressive generic drug pricing reform, agreed to continue to support a pan‐Canadian approach to bulk‐buying brand drugs and continuing to pursue other cost‐saving strategic initiatives. The Canadian life and health insurance industry has been engaged with the provinces on all of these reforms and supports any initiative to lower drug costs to Canadians. OUR PUBLIC POLICY PAPER AND PROPOSALS While the reforms being pursued by various stakeholders have led to some important improvements, they have tended to be targeted at a narrow section of the overall prescription drug market. Ultimately, a more comprehensive and coordinated reform to the overall prescription drug system is needed in order to address the challenges Canadians face over the longer term. Accordingly, on June 25, 2013, the CLHIA released a public policy paper ‐‐ Ensuring the Accessibility, Affordability and Sustainability of Prescription Drugs in Canada ‐‐ setting out actionable recommendations for reform. From an overall public policy perspective, the paper's recommendations are broadly geared towards ensuring that no Canadian takes on undue financial hardship as a result of prescription drug costs and encouraging a more active collaboration between all stakeholders in the prescription drug market, including between the public and private drug systems. To this end, our policy paper sets out a number of recommendations. As a priority, we recommend that: the federal agency that regulates prices for new drugs (the Patented Medicine Prices Review Board) be fundamentally reformed to drive down prices; discussions start on creating a common, national, minimum list of drugs that will be covered for all Canadians; and governments lead a discussion to work towards the creation of a new, collaborative approach to approving and paying for very rare orphan drugs.

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