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Public Access to Drugs Meets Health Needs, Cuts Costs

Pills on table

(e-Magine Art/Flickr)

28 February 2017. A study shows adding universal access to essential drugs as part of Canada’s health care system would meet much of that country’s pharmaceutical needs and save billions of dollars. The analysis by a team from University of British Columbia and University of Toronto appears in the 27 February issue of Canadian Medical Association Journal.

In a related study in the same journal, Nav Persaud, a family physician at St. Michael’s Hospital in Toronto, and colleagues compiled a list of 125 essential prescription drugs for Canadians, based on World Health Organization’s model list of essential medicines developed in 2013 and clinical practice in Canada. Persaud is a participant in and co-author of the universal access study led by UBC public health professor Steven Morgan.

The UBC-Toronto team seeks to gauge the impact on public health outcomes and government budgets if the Canadian government purchased in bulk and insured access to prescription drugs most needed by its citizens. While Canada has a single-payer health care system, the country’s prescription drugs are offered in a hybrid program that mixes public coverage with private plans. An analysis of survey data from 2014 by Morgan and colleagues shows some 8 percent of Canadians age 55 and over skipped filling their prescriptions due to the drugs’ costs, second only to the U.S. with 17 percent among 11 high-income countries.

The researchers compiled a list of 117 drugs considered essential to Canadians similar to the list collected by Persaud’s team based on the WHO initiative, known as CLEAN Meds, short for carefully selected and easily accessible at no-charge medications. The 117 drugs include those prescribed for primary health care needs, such as antibiotics, insulin, heart medications, and anti-depressants. The list also has treatments for public health priorities such as oral contraceptives, HIV, hepatitis, and some inflammatory conditions. The 117 medications account for 44 percent of all prescriptions written in Canada and 30 percent of the country’s prescription drug costs in 2015.

The team ran simulations to calculate the effects of bulk purchases on Canadian drug spending, from administrative and market research data of prescription drugs filled in Canada, as well as pricing models of single-payer systems from Sweden and New Zealand, as well as the Veterans Administration in the U.S. The team found on average, generic drug costs are 47 to 84 percent lower under these single-payer plans, while brand-name drugs are on average 43 percent lower in the V.A., than those paid by Canadians.

The researchers estimate Canadians filled 568 million prescriptions in 2015 at a total cost of $26.2 billion, with the 378 million publicly-paid prescriptions costing some $10.8 billion that year. Having the Canadian government purchase and provide the essential medications would reduce the total annual expenditure for prescription drugs in the country by $3.1 billion. Savings to consumers and private drug plans are calculated at $4.3 billion per year, an average of 28 percent. The Stockholm region in Sweden experienced a similar 28 percent savings when it introduced its Wise List formulary for essential drugs. The Canadian government would have to pay an additional $1.2 billion per year to purchase the drugs. (All estimates are in Canadian dollars, equal to $US 0.75.)

“A program of this kind is a feasible way of improving the overall health of Canadians while dramatically lowering drug costs,” says Morgan in a UBC statement. “We show that adding universal public coverage of essential medicines to the existing system of drug coverage in Canada is a significant and feasible step in the right direction.”

Morgan and Persaud tell more about the study in the following video.

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