Question Period Note: Pharmacare and Canada'a Drug Agency

The Government has introduced Bill C-64: An Act respecting pharmacare (Pharmacare Act), which proposes the foundational principles for the first phase of national universal pharmacare in Canada.
On December 18, 2023, the Government of Canada announced its plan to advance with the establishment of Canada’s Drug Agency (CDA, the Agency), built from the Canadian Agency for Drugs and Technologies in Health (CADTH) and in partnership with provinces and territories, featuring an investment of $89.5 million over five years, starting in 2024-25. The CDA will provide the dedicated leadership and coordination needed to modernize the Canadian pharmaceutical system, laying a strong foundation to support ongoing growth. CADTH officially launched as the CDA on May 1, 2024. The CDA is also featured in Bill C-64, an Act respecting pharmacare.

Canadians should have access to the right medicines, regardless of where they live or their ability to pay. People should not have to choose between paying for their medications and putting food on the table. Unfortunately, many are still forced to make this impossible decision.
The Government of Canada introduced foundational legislation that will lay a path forward towards the first phase of national universal pharmacare in Canada.
Provinces and territories play a critical role as our partners in ensuring Canada will move forward towards national universal pharmacare.
Our government is already working successfully with provinces and territories on other initiatives to help ensure Canadians can access the medicines they need, including the National Strategy for Drugs for Rare Diseases and the Improving Affordable Access to Prescriptions Drugs Initiative with Prince Edward Island.
We are pleased to report that, building on our government’s December 2023 of plans to advance with the establishment of the Canadian Drug Agency (CDA), supported by an investment of $89.5 million over five years, the Canadian Agency for Drugs and Technologies in Health (CADTH) officially launched as the CDA on May 1, 2024.
The CDA is featured in Bill C-64, an Act respecting pharmacare; the establishment of the CDA will lay a strong foundation to support ongoing pharmacare priorities, such as the development of a national formulary and a national bulk purchasing strategy.
IF PRESSED ON CONTRACEPTIVES
Contraceptive drugs were chosen as part of this next step of universal pharmacare specifically because improved access to contraception improves equality.
Cost has consistently been identified as the single most important barrier to access to these medications and the cost is unevenly borne by women and gender diverse Canadians.
Bill C-64 will ensure that Canadians will have access to a comprehensive suite of contraceptive drugs and devices.
IF PRESSED ON DIABETES MEDICATIONS
Diabetes is one of the most common chronic diseases affecting people living in Canada, affecting more than 3.7 million Canadians.
In 2015, 25% of Canadians with diabetes reported they had difficulty following their treatment due to cost, in some cases rationing medications to save money.
Improving the affordability of these medications will improve the health of Canadians living with diabetes and reduce the risk of serious life-changing health complications such as blindness or amputations.
The Government of Canada will be launching discussions with provinces and territories on providing universal, single-payer coverage of diabetes drugs.
The Government of Canada also plans to establish a fund to support Canadians’ access to diabetic supplies, such as syringes and glucose test strips.
IF PRESSED ON PHARMACARE LEGISLATION AND CDA
The Government of Canada is committed to working with stakeholders to advance the implementation of pharmacare. The newly launched CDA will address key system gaps and lay a strong foundation upon which future pharmacare work can be built, including formulary development and bulk purchasing.
IF PRESSED ON THE DEVELOPMENT OF A NATIONAL FORMULARY AND BULK PURCHASING PLAN
Bill C-64 sets out next steps with the CDA on the development of a national formulary and a national bulk purchasing strategy.
This advice would be a starting point for partners to consider which pharmaceutical products should be included under national universal pharmacare.
The CDA is ideally placed with its expertise to develop this starting point, in collaboration with provinces, territories, Indigenous Peoples and other partners and stakeholders.
The CDA will be expected to develop this advice no later than the first anniversary of the day on which the Act receives royal assent.
In the meantime, we will continue to work with all provinces, territories, and stakeholders to lower costs and improve access to the safe, high-quality medications Canadians need.
IF PRESSED ON THE PRINCE EDWARD ISLAND INITIATIVE
Progress has already been made to improve the affordability and accessibility of needed prescription drugs for Prince Edward Island residents.
As of 2023, PEI expanded formulary access to a total of 100 new medications to treat a variety of conditions including cancer and heart disease.
Effective June 1, 2023, PEI expanded its provincial drug coverage to reduce co-pays to $5 for almost 60% of medications regularly used by Islanders. As of March 2024, Islanders have saved over $2.8 million in out-of-pocket costs on more than 330,000 prescriptions under the $5 co-pay program.
IF PRESSED ON THE NEED FOR CANADA’S DRUG AGENCY
Canada has internationally recognized pockets of excellence in pharmaceuticals management, including the regulatory approvals process within Health Canada.
The CDA will focus on the system as a whole to address gaps, remove duplication, improve system coordination and enhance access and equity.
More specifically, the CDA will build on CADTH’s existing functions to include the following work streams:
Data and Analytics
Appropriate Prescribing and Use
System Coordination
Through these functions, the CDA will provide the dedicated leadership and capacity that is needed to implement national priorities to improve the pharmaceuticals system.
The CDA will not duplicate well-performing functions or organizations.

Bill C-64: An Act respecting pharmacare
Bill C-64, An Act respecting pharmacare, was introduced on February 29, 2024. The Bill proposes foundational principles for national universal pharmacare and describes the Government’s intent to work with provinces and territories to provide Canadians with universal single-payer first dollar coverage for a range of contraception and diabetes products. The Bill also sets out next steps with Canada’s Drug Agency on the development of a national formulary, a national bulk purchasing strategy and a pan-Canadian appropriate use strategy. In addition, it requires the Minister to establish an expert committee to provide advice on the financing and operation of universal single payer pharmacare. The substantive provisions of the Bill, including those related to the national formulary and the bulk purchasing strategies, expressly require that PTs be consulted.

Private Member’s Bill on Pharmacare
On February 24, 2020, NDP MP Peter Julian introduced Private Member’s Bill C-213, An Act to Enact the Canada Pharmacare Act, in the House of Commons. This bill would provide for a legislative framework for a public single-payer drug coverage system in Canada, which was defeated. On March 13, 2020, the House of Commons unanimously adopted a motion from NDP MP Don Davies that called on the government to negotiate with the PTs to establish a dedicated fiscal transfer for universal, single-payer, public pharmacare. On June 13, 2023, NDP MP Don Davies introduced Private Member’s Bill C-340, An Act to Enact the Canada Pharmacare Act. This bill is similar in text to the previously defeated Bill C-213.

Supply and Confidence Agreement
The agreement announced on March 22, 2022, committed to continuing progress towards a national pharmacare program by passing a Canada Pharmacare Act by the end of 2023 and then tasking Canada’s Drug Agency to develop a national formulary of essential medicines and bulk purchasing plan by the end of the agreement (June 2025). This commitment was reflected in Budget 2022 and in language outlined within Bill C-64.

Advisory Council on the Implementation of National Pharmacare
In Budget 2018, the Government announced the creation of the Advisory Council on the Implementation of National Pharmacare, chaired by Dr. Eric Hoskins. The Council engaged with Canadians, patients, provincial, territorial and Indigenous leaders, health care experts, and stakeholders through regional roundtables, town halls, an online questionnaire, and written submissions. On June 12, 2019, the Council’s final report was tabled in Parliament, recommending the implementation of national universal pharmacare over seven years, starting in 2020 and achieving a comprehensive national formulary under pharmacare by 2027. This report recommended universal, single-payer, public pharmacare in Canada through step-by-step progress including the establishment of the Canada’s Drug Agency (CDA), implementing a National Strategy for Drugs for Rare Diseases, and the development of a national formulary funded by pharmacare.

Under these recommendations, this formulary, developed by the CDA, will start with an initial list of essential medicines that provinces would cover with incremental federal funding. Hoskins’ estimated that the initial net incremental public cost to cover essential medicines in 2022 would be about $3.5 billion. In addition, the council recommends out of pocket costs for all products listed on the national formulary not exceed $5 per prescription, with a copayment of $2 for essential medicines, and an annual maximum of $100 per household per year to ensure that patients face few barriers to access.

Over the subsequent five years, additional prescription drugs would be added to the national formulary as prices and supply arrangements are negotiated with manufacturers leading to a comprehensive national formulary available under pharmacare. Hoskins’ estimated that the incremental public cost once national pharmacare is fully implemented in 2027 would be $15.3B.

Parliamentary Budget Officer: Cost Estimate of a Single-payer Universal Drug Plan
In response to parliamentary interest in implementing a single-payer universal drug plan, on October 12, 2023, the Parliamentary Budget Office (PBO) released a report entitled Cost Estimate of a Single-payer Universal Drug Plan. The report estimates that the incremental public cost to implement single-payer universal drug plan based on Quebec’s Régie de l’assurance maladie du Québec (RAMQ) formulary to be $11.2B in 2024-25, increasing to $13.4B in 2027-28. The RAMQ formulary was used given that the drugs it lists represent the largest share of system-wide spending of any PT formulary. The PBO costing is based on the framework proposed by the House of Commons Standing Committee on Health (HESA) in 2016 and used by the PBO to prepare pharmacare costing in 2017 (Federal Cost of a National Pharmacare Program). In its 2017 report, the PBO estimated full implementation of national pharmacare in 2015-16 would have required $7.3B in incremental public spending.

Budget Commitments (CDA)
Budget 2019 announced federal investments to move forward on three foundational elements of national pharmacare:
• Creation of Canada’s Drug Agency to take a coordinated approach towards assessing effectiveness and negotiating drug prices;
• As part of the work of the Agency, development of a national formulary to promote more consistent coverage across the country; and,
• Creation of a national strategy for drugs for rare diseases to help Canadians get better access to the effective treatments they need.

Budget 2019 proposed $35 million over four years, starting in 2019-20, to establish a Transition Office to support this initiative. It also announced an investment of up to $1 billion over two years, starting in 2022-23, with up to $500 million per year ongoing, to help Canadians with rare diseases access the drugs they need.

These commitments were reiterated in the 2020 Fall Economic Statement, Budget 2021 and Budget 2022.

On December 18, 2023 the Government of Canada announced approved funding of $89.5 million over five years, beginning in 2024-25, to establish Canada’s Drug Agency (CDA).
The Canada’s Drug Agency will be established as a not-for-profit pan-Canadian health organization, built with, and from, the Canadian Agency for Drugs and Technologies in Health (CADTH) and in partnership with provinces and territories. CADTH announced its transition to the CDA on May 1, 2024.

CADTH
CADTH was established in 1989 as an independent pan-Canadian health organization, governed by a Board of Directors with representation from seven jurisdictions and non-governmental entities. CADTH reports directly to the 13 PT Deputy Ministers of Health.

CADTH provides Canada’s health care decision-makers with objective evidence, including health technology assessments and post-market safety and effectiveness work, support informed decisions about the optimal use of drugs and medical devices.

CADTH’s 2022-2025 Strategic Plan has supported growth and innovation, promoting innovative approaches and positioning the organization as a catalyst for system change. Growing capacity underscored by the recent successful integration of the Post-Market Drug Evaluation (PMDE), formerly situated with the Canadian Institutes of Health Research.

Prince Edward Island Improving Affordable Access to Prescription Drugs Initiative
On August 11, 2021, the Government of Canada announced the signing of the first agreement with the Government of Prince Edward Island (PEI) to inform the advancement of national universal pharmacare. Through this agreement, PEI will receive $35 million in federal funding. The Government of Canada will use early lessons from PEI’s efforts to inform its ongoing work to advance national universal pharmacare.

A first drug coverage improvement was announced May 25, 2022. As of June 1, PEI has increased formulary coverage of opioid and alcohol dependency medications to provide to residents at no cost through its Substance Use Harm Reduction Program. In addition, PEI is strengthening community mental health services with second generation long-acting antipsychotic medications to the Community Mental Health program. Other improvements include changes to special authorization requirements for 23 medications on the Pharmacare formulary that will allow greater ease of access for physicians seeking to provide medications to Islanders. As of 2023, PEI expanded formulary access to a total of 100 new medications to treat a variety of conditions. Effective June 1, 2023, PEI expanded its provincial drug coverage to reduce copays to $5 for residents covered in the Seniors Drug Program, the Family Health Benefit Program, the Generic Drug Program and the Diabetes Drug Program. The medications identified in this list represent about 60% of prescriptions that Islanders use on a regular basis. PEI also increased access to the provincial High-Cost Drug Program as of June 1, 2023, making it available to all income levels, and PEI also made adjustments to the Catastrophic Drug Program as of July 1, 2023, by lowering the annual cap on the amount of money a household needs to spend out of pocket on eligible medications.

External Perspectives
Media and Public Opinion
Canadians are generally supportive of improving affordable access to prescription drugs, but are also sensitive to cost considerations as government health-related expenses continue to grow.

Mainstream media coverage of the pharmaceuticals system focuses primarily on approval of new treatments, science-based innovation, clinical trail breakthroughs, and accessibility / affordability of treatments from a human interest perspective.

Media reports are generally factual and link the mandate letter and related federal Budget announcements. Select media emphasize Quebec’s unique approach to health.

A May 2022 Fraser Institute poll following the federal budget, found that 79% of Canadians support universal national pharmacare with no costs attached. Support fell by almost half, to 40%, if the program was to be financed by an increase in the GST.

An October 2020 Angus Reid study found that one quarter (26%) of Canadians had to pay for half or more of their prescription drug costs in the past year. Nearly nine-in-ten Canadians supported the idea (86%) of an affordable drugs program and more than seven-in-ten (77%) said increasing coverage should be a high priority for government.
Stakeholders
The stakeholder ecosystem for the pharmaceuticals management system is very large and diverse, including patients, patient organizations, Indigenous representatives, healthcare professionals, prescribers, dispensers, scientists and researchers, employers and employees, and innovative and generic manufacturers. Stakeholder engagement has been neutral to positive, with many signalling willingness to discuss further collaboration.

Stakeholders want to see progress on national pharmacare, but have differing visions of the end state. In general, patients, health care professionals, and labour organizations are supportive of a “medicare” (public single-payer) approach, while the insurance and pharmaceutical industries advocate a “fill the gaps” (mixed-payer) approach that would extend public coverage to those who need it most while maintaining existing private plans. The majority of stakeholders that envision a “medicare” approach have expressed support for Bill C-64 given the provision outlining the Government of Canada’s intent to work with provinces and territories (PTs) to provide universal, single-payer coverage for a number of contraception and diabetes medications.

Pharmacy stakeholders have expressed concern on implementing single-payer public coverage and how that might impact their dispensing fees as well as the potential for disruptions in their ability to provide professional services to patients/clients who are switching from private to public coverage for these medications.

A phased approach to implementation of coverage improvements is generally supported by all stakeholders.
Some stakeholders, including brand name manufacturers and unions, have developed written input to share their perspectives on the mandate and role of a CDA.

Industry emphasizes priorities such as accelerating approvals processes, support for innovation, a data-driven approach to technology assessment, value analysis, and assessing treatment outcomes.

Provinces and territories
Through the Council of the Federation, provincial and territorial Premiers publicly and persistently call on the federal government to increase funding for healthcare through the Canada Health Transfer (CHT).
Provincial and territorial governments are responsible for the delivery of health care for their residents, including determining which drugs are covered under government-run public plans, under what conditions this coverage is offered, and which populations are eligible for this coverage.

Bill C-64 outlines the Government of Canada’s plan to ensure universal, single-payer coverage for a range of contraception and diabetes medications. This includes the Government of Canada’s intention to establish a fund for diabetes devices to help support Canadians manage and monitor their diabetes and administer their medication.

The Government of Canada will work with willing provinces and territories to implement this coverage through bilateral agreements.

Pharmaceuticals Management Landscape
In recent years, decisions related to system management have been driven by rapidly evolving system demands, new technologies, and evolving international market factors that have been challenging to reconcile with the traditional division of responsibilities and the provisions of the Canada Health Act.
This has resulted in gaps, challenges, and inefficiencies particularly in relation to:
• Coordination across jurisdictions and throughout the life cycle of a drug
• Data, real-world evidence, and analytical capacity
• Health outcomes and appropriate use
• Negotiations, pricing mechanisms and sustainability

On February 29, 2023, the federal government introduced Bill C-64: An Act respecting pharmacare (Pharmacare Act), which proposes the foundational principles for the first phase of national universal pharmacare in Canada and describes the Government of Canada’s intent to work with provinces and territories (PTs) to provide universal, single-payer coverage for a number of contraception and diabetes medications.
On March 22, 2023, the Government of Canada announced measures in support of the first-ever National Strategy for Drugs for Rare Diseases, with an investment of up to $1.5 billion over three years, to help Canadians with rare diseases access the drugs they need.
On December 18, 2023 the Government of Canada announced the creation of Canada’s Drug Agency (CDA). The CDA will be built from the existing Canadian Agency for Drugs and Technologies in Health (CADTH) and in partnership with provinces and territories (PTs). The Government of Canada is investing $89.5 million over five years to establish the CDA. CADTH officially launched as the CDA on May 1, 2024.
In Budget 2024, the Government of Canada announced $1.5 billion over five years to support the launch of national pharmacare and coverage for contraception and diabetes medications.