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17 June 2024 | Country Update
A step toward national Pharmacare: expanding coverage for contraception and diabetes medications -
15 January 2023 | Country Update
Pharmacists in Ontario authorised to prescribe treatments for common acute conditions
5.6. Pharmaceutical care
Inpatient drugs are dispensed by hospitals without charge to patients as part of medicare. Outpatient pharmaceuticals, the cost of which may be covered in whole or part through public or private drug plans, are prescribed by physicians and in rare cases by other health providers who have the right to prescribe certain classes of drugs. Individuals obtain their prescription drugs at retail pharmacies. Almost all pharmacies, whether they are independent or part of a chain, sell a host of products beyond prescription and OTC drugs. Pharmacies in large chain grocery stores now compete directly with traditional stand-alone pharmacies by selling prescription and OTC drugs. In 2018 there were 10 692 retail pharmacies and drug stores in Canada of which two thirds were commercial chains (IQVIA, 2019).
Pharmaceutical sales in Canada doubled from 2002 to 2017, with the majority of sales to retail drug stores (88%), and the remainder to hospitals (Canada, 2019d). In 2018 there were 29 802 Canadians employed in pharmaceutical manufacturing, mostly in the three largest cities: Toronto, Montreal and Vancouver. While there is some domestic pharmaceutical production, the majority of the pharmaceuticals in the Canadian market are imported (about 64%), mostly from the USA (38% of all imports) and the European Union (40% of imports) (Canada, 2019d).
FPT governments manage multiple drug plans for their populations; across Canada public drug plans vary in terms of the target populations, formularies and the extent and depth of coverage (CIHI, 2018d; see Chapter 3). There are over 100 public drug plans across the country, since provinces and territories generally administer a catastrophic drug coverage programme for the general population as well as targeted benefits for specific subpopulations such as lower-income people receiving social assistance, older adults aged 65 years and older, and disease specific programmes such as for HIV and cancers. Unlike all other provincial plans, the Quebec drug programme is a mandated insurance plan in which private insurance plays a key role (Pomey et al., 2007). To add further complexity to these PT differences, eligible First Nations and Inuit patients are covered through the federal NIHB programme administered by Indigenous Services Canada. The one exception to variations in coverage for prescription drugs across jurisdictions is inpatient drug therapy: since prescription drugs provided in hospitals are considered insured health services and part of universal coverage, they are provided by all PT governments to all PT residents, including First Nations and Inuit, free of charge, by PT governments. Geographical variations in drug coverage and costs to individuals reflect this patchwork of programmes in place. For example OOP spending on pharmaceuticals was lowest in Ontario (Can$ 402 per household, €272) and highest in Quebec (Can$ 534 per household, €358); and spending on private drug plan premiums was also lowest in Ontario (Can$ 153 per household, €103) and highest in New Brunswick (Can$ 396 per household, €265) in 2016 (Morgan, 2018a).
Since the early 2000s there have been a number of Canada-wide initiatives where FPT governments have collaborated to strengthen pharmaceutical pricing and reimbursement policies. With the exception of Quebec, governments agreed to allow CADTH to establish a pan-Canadian process to review the clinical and cost–effectiveness of new prescription drugs known as the Common Drug Review (CDR), which began in 2003. However, the CDR makes only recommendations, and provincial governments ultimately decide whether or not to consider CDR analyses in determining whether or not to include specific pharmaceuticals in their respective formularies. Cancer drugs are reviewed separately by CADTH through the pan-Canadian Oncology Drug Review.
In 2010 the provinces established the Pan-Canadian Pharmaceutical Alliance to jointly negotiate drug prices with the objective of reducing prices, to reduce duplication of effort with each province negotiating separately with drug manufacturers for its own public drug programmes, and to improve consistency of drug decisions across the country. The federal government joined in 2015. As of November 2019, FPT governments collectively negotiated prices of over 300 drug products (COF, 2019). The introduction of this Canada-wide drug review process and joint negotiations have reduced the differences in timing and nature of drug coverage decisions across the country over time, so the provincial drug plan formularies have become increasingly aligned (Gamble et al., 2011; Milliken et al., 2015; PMPRB, 2017).
Pharmaceutical prices in Canada are determined through a mix of statutory price limits and voluntary price negotiations. PMPRB regulates the non-excessive price ceilings of newly patented medicines in Canada by setting the maximum price against the public price across several countries. In 2019, the federal government made several changes to the PMPRB primarily to address the significantly higher price of drugs in Canada compared with other countries. One of these changes was to the list of international reference countries. Prior to 2019 the comparator countries included France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the USA, but since then Switzerland and the USA have been removed and other countries have been added (see Box5.5). Provinces and territories then negotiate confidential price discounts through the Pan-Canadian Pharmaceutical Alliance (Morgan, 2018b). For generic drugs, the individual public drug programmes set price limits (relative to brand name equivalents), and the Pan-Canadian Pharmaceutical Alliance has set a price limit for over 60 high volume generic drugs at approximately 10–18% of the equivalent brand name product.
Box5.5
As noted above, prices in Canada are higher than most other OECD countries (see Box5.5). A recent study of the cost drivers of the differences in spending on prescription drugs in six primary care therapeutic categories between Canada and nine OECD countries found that the difference in spending was primarily driven by the price of drugs and not by volume (Morgan, Leopold & Wagner, 2017). They found that the use of generic drugs in these six therapeutic categories was higher in Canada than in the nine other countries. Moreover, the volume of prescribed medications in these therapeutic categories was comparable across the countries. The main reason for the differences were twofold. First, the list prices in Canada were significantly higher (about 61%) than the average list prices in nine comparator OECD countries (and higher than all comparators except Switzerland). Second, Canadians were prescribed higher-cost drugs within these therapeutic categories than in the other countries (particularly for lipid lowering drugs and antidepressants) (Morgan et al., 2017).
In response to the variations in drug coverage and costs to individuals across the country, along with the high prices paid in Canada relative to other countries, some experts have long argued for a single national drug plan and formulary as well as a single agency to regulate pharmaceutical pricing. However, such an approach is challenged by two opposing imperatives: that of provincial governments, especially Quebec, that wish to retain control over provincial drug policies including prescription drug plans, and that of the federal government, which has resisted assuming the financial burden and future fiscal risk of a federally financed and administered pharmaceutical coverage programme (Marchildon, 2007).
Since the introduction of Canadian medicare, all attempts to introduce a national Pharmacare programme have been unsuccessful (see Chapter 6). Attempts such as the 2004 National Pharmaceuticals Strategy that was part of the 10-Year Plan to Strengthen Health Care led only to incremental change. That strategy encompassed nine action items including developing a common national formulary, strengthening evaluation of drug safety and effectiveness, expanding e-prescribing, and strengthening drug purchasing strategies (CICS, 2004). While there was some effort to address these recommendations, it largely came to a halt by the end of the decade. This was due in part to changes in FPT government administrations in the intervening years (HCC, 2009). Since then the establishment of the Pan-Canadian Pharmaceutical Alliance in 2010 has strengthened purchasing strategies. More recently there has been increased federal interest in developing a national Pharmacare programme, with the appointment of a federal Advisory Committee on the Implementation of National Pharmacare in 2018, and 2019 Federal Budget which signalled the intention to create a “Canadian Drug Agency” and take “steps towards the development of a national formulary”. Following the election in October 2019, the government expressed its intent to establish the Canada Drug Agency, and to implement a national formulary and a rare disease strategy (see Chapter 6).
Authors
From 1 January 2023, pharmacists in Ontario are authorised to prescribe medication for common acute conditions that can be managed with minimal treatment or follow-up. They will be able to prescribe treatments for 13 common ailments including: allergic rhinitis, candidal stomatitis (oral thrush), conjunctivitis, dermatitis and others (see OCP 2023). The new prescribing regulations are part of a wider scheme to expand pharmacists’ scope of practice that began in 2019. Ontario is the second-last province in Canada to grant prescribing authority to pharmacists for minor ailments since Alberta did so in 2007. The expanded powers are widely welcomed to ease pressures on primary care physicians and emergency departments. Pharmacists have expressed some concerns about the lack of integration in the province’s fragmented information systems (for example, how information about treatments can be recorded or shared with a patient’s GP) that may inhibit their capacity to contribute to collaborative team-based case.