Last month’s federal budget came with an announcement of the formation of an advisory panel tasked with studying the feasibility of a national pharmacare plan while also studying the patchwork of systems currently available in some provinces.
Led by former Ontario Health Minister Dr. Eric Hoskins, the panel will also examine international models in an attempt to create broader access to prescription medication across the country. The panel will have until the end of 2019 to complete its study.
Why is this relevant? Because by now, it’s pretty well known that Ontario is one of the provinces with a patchwork system and covers the cost of more than 4,400 drug products for children and youth under the age of 25 in Ontario. Known as OHIP+, this change came into effect on January 1, 2018. It’s good news for employers who, until now, have been saddled with the burden of medical and drug product costs through employee benefit plans.
The drug products covered by Ontario are listed on the Ontario Drug Benefit Formulary/Comparative Drug Index. They include common antibiotics to treat infections, inhalers for asthma, various insulins and diabetes test strips, ADHD drugs, epinephrine auto-injectors, drugs to treat childhood cancers and other rare diseases and much more. Basically, the same drugs and drug products that are covered under the Ontario Drug Plan (ODB) for Ontarians over the age of 65 are now covered for children and youth under the age of 25.
OHIP+ yields savings for businesses
However, while the province is now covering over 4,400 drug products, there are still over 10,000 drugs that are not covered under this program. Some reports suggest that this means that only about 45% of total claims for those under age 25 will be covered under OHIP+. This leaves employee benefit plans to cover the additional 55% of claims on an ongoing basis.
But by lifting some of the weight off the shoulders of employee benefit packages, employers should see a roughly 5% reduction in drug claims and carrier administrative costs over the course of this, and future, years. In anticipation of reduced claim costs, some carriers have already pro-actively offered a rate reduction.
Future of pharmacare
Without weighing in on a political debate on the subject, OHIP+ raises some questions and concerns — mainly what, if anything, is being sacrificed in the provincial budget to fund the cost of OHIP+? How will we ultimately pay for this?
But, since Canadians in general strive to always take care of each other, the bigger question is could this be an indicator of things to come? Are OHIP+ and the province of Ontario blazing a trail towards the creation of a national pharmacare solution?
While health care is available across the country, a national public drug program is not. Where it is, it is typically only for select populations and often requires some sort of co-pay and/or deductible. Ontario is effectively saying that it is moving in the direction of public pharmacare and it’s testing the waters by starting with the most affordable population group. With last month’s advisory panel announcement, the federal government is effectively saying it’s willing to at least consider a national pharmacare solution.
Employers would surely support any move towards a national pharmacare plan. Because as health costs continue to increase, such a solution would no doubt result in cost savings for businesses.
Partner at Thorpe
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