The false promise of pharmacare

A look at the facts suggests that mucking around with the existing Canadian pharmacare system is a bad idea. Photo credit: People Images/Getty Images


Among all the other hot topics in our world today, the issue of pharmacare will likely be a key part of discussions in Ottawa at least until the end of this year. The reason is of course the demand of Jagmeet Singh’s NDP that the Liberals introduce a pharmacare program before year end. This demand is part of the so-called Supply and Confidence agreement between the Liberal Party and the NDP to ensure the NDP will continue to prop up the minority Liberals through until October 2025, as long as the Liberals satisfy NDP demands. 

A look at the facts suggests that mucking around with the existing Canadian pharmacare system is a bad idea. First of all, a grandiose national government-run pharmacare system is a solution looking for a problem. Currently, about 90 per cent – and some studies have found higher percentages – of Canadians have sufficient drug coverage of one kind or another. Much of this is done through the provinces and the private sector with employers, insurance companies and others contributing to the mix.

It is not exactly the same for every Canadian, as some programs cover drugs other programs do not, but generally it is a pretty good system. As well, there are back-up agencies such as the Trillium Drug Program in Ontario, who can step in and provide coverage for lower-income people, the disabled and others that need assistance with drug costs. For the small minority of Canadians who truly lack drug coverage, it would be much more sensible to focus on them than upend the entire current system which is on balance working well. 

The NDP, defying centuries of factual experience, continue to believe that government monopolies are the ideal way to deliver any service. They would like to see the creation of a massively costly government bureaucracy to oversee a one-size-fits-all pharmacare program for the country, no matter the different needs of the various regions and subsets of the population. And it will be expensive. 

Estimates of how much a national government-run pharmacare program would be range from $11-30 billion annually and, as with most government program estimates, this is likely on the low side. Federal finances are already in a perilous state because of the massive overspending of the Trudeau government, and debt rating agencies are paying close attention to any worsening of our debt burden by the introduction of costly new programs. 

The unions are of course gung-ho about the prospect of a new national program, as they foresee lots of new government unionized jobs for the big bureaucracy that will be needed with their overly generous salaries, rich pensions and other pricey benefits. Trudeau has already increased the unproductive federal public sector by 40 per cent, and an additional new bureaucracy will further worsen the government cost burden on the productive private sector. 

Proponents of a national pharmacare system tout the notion that money will be saved by having one national entity obtain drugs at higher volume and a lower price, but much of that “bulk buying” is already taking place within and among the provinces. Furthermore, the notion of “free” drugs suggests that the over-prescription and use and abuse of unnecessary medications would be even worse than it already is if there are not some kind of costs attached to it. Furthermore, experience with these types of programs in other jurisdictions suggests that the range of drugs covered by the program would be significantly less than with the current system.

From the legislative standpoint, the likelihood of the Liberals presenting a piece of legislation acceptable to the NDP in the few weeks left that Parliament will be sitting in 2023 is slim to none. Any sensible pharmacare Bill would be very complex and detailed and will never be accomplished in a few weeks. If anything is produced, it will probably only be a rough overview put together to satisfy the NDP’s arbitrary deadline. And although the NDP loves to rattle the sabres occasionally and say that they will back out of their coalition agreement with the Liberals and force an election, no one believes that will happen as NDP leader Singh currently has the most power he will ever have, and even that isn’t all that much. 

It’s also ironic that Jagmeet Singh, who loves to rail against large companies and their supposed rip-off of Canadians, will actually be benefitting the private sector by taking pharmacare off their hands. Employers would be foolish to offer drug coverage to their employees if the government steps in, despite the fact the employer-funded program is likely to be much superior to what the government will offer. It is also worth noting that if a national government pharmacare program does come to pass and is viewed to have failed in future, it would be impossible to go back to the previous system of primarily private sector participation.  

Many Canadians may believe that a government administered national pharmacare program will be a great addition to our array of expensive and inefficient government social programs. Given the probable outcome, they should be careful what they wish for. If it ain’t broke, don’t fix it. 

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