by Charles Cirtwill

My family physician is very cautious when prescribing drugs. She believes it is important to know what condition you are trying to treat and to prescribe precisely the correct drug in precisely the correct amount in order to address that illness. She is a firm believer that the cure should not be worse than the cold.


I think a little of that caution needs to be exercised in the discussion about the need to fill the gap in catastrophic prescription drug coverage in Canada. There is no question that some Canadians simply do not have any catastrophic drug coverage and that the absence of that coverage creates hardships and harm that we must address. Recent media coverage has brought us the heartrending stories of single mothers having to ration needed drugs in order to balance treating their illness against feeding their family. Of people being forced to give up work and go on social assistance in order to cover the cost of their drug treatments for horrendous diseases, the burden of the disease itself being more than many of us would wish to bear.


Those stories should not happen in Canada.


But let’s consider the prescription that is being offered to treat the problem. A national pharmacare plan that, by some estimates, will cost about $2 billion. A national pharmacare plan to address a gap in catastrophic drug coverage that everyone recognizes only exists in Atlantic Canada. A national pharmacare plan to supply coverage to the 2% of Canadians who don’t have any coverage. Yes, only 2% of Canadians do not have catastrophic drug coverage. Unfortunately that 2% all reside in Atlantic Canada.


In fact, in Atlantic Canada it has been estimated that as many as one in four people do not have catastrophic drug coverage. With the exception of Alberta and Atlantic Canada, however, all other provinces provide full protection for their population, meaning that out-of-pocket costs are capped and in Alberta, while the total is not capped, the per drug cost is. So why do we have a hue and cry for a national pharmacare plan?


Ontario, Quebec and the western provinces are protecting their citizens and delivering this service. They are delivering on their provincial responsibilities under the constitution and doing so without a national plan. Is the national plan required because Atlantic Canada can not afford plans similar to those already in place for 98% of Canadians? That would make sense, if the federal government is going to step in and pay for coverage for Atlantic Canadians then surely it is only fair that the federal government pay for all Canadians.


But before Tony Clement opens up the federal chequebook one more time, lets consider the provincial ability to pay in Atlantic Canada.  Estimates of the costs for a catastrophic drug plan range from $50 to $150 million per year. Assuming the worst case scenario on costing, where, you ask, would the Atlantic Provinces come up with that extra 150 million per year?


According to the Dominion Bond Rating Service, the combined surplus being projected by the four eastern provinces for 2005-2006 is $327 million. That is more than twice what is needed to cover the worst case scenario and more than 6 times that $50 million.  Only PEI is forecasting a deficit. Working together the four provinces could certainly cover the costs all on their own. Working separately, three out of the four would appear to have the money to make it happen. 


Taking a different approach, in 2005-2006 the combined health budgets of the four eastern provinces was $7.7 billion. Just one half of one percent of that figure gives them the $50 million. Just 2% would allow them to cover the full cost of the most generous catastrophic drug coverage plan.


We don’t need a 2 billion dollar solution to a 50 million dollar problem.  We just need the Atlantic Provinces to step up to the plate and do what other provinces have done. Spend provincial health dollars in a more prudent and productive way. The last four provinces must follow the lead of their peers and help their residents address the catastrophic drug costs associated with catastrophic illness.


To their credit, they have started to do so. “Working families pharmacare” has been promised in Nova Scotia. Newfoundland and Labrador has committed to using their own resources to extend coverage to 100,000 of their citizens.  But time is of the essence and by acting sooner rather than later, the governments in Atlantic Canada can help not only their residents but themselves.


By covering these catastrophic drugs the provinces can actually save money by reducing the total demands on the health system and by keeping people productive in society. That is the right prescription for the real problem.

Charles Cirtwill is the acting President of the Atlantic Institute for Market Studies, a non-partisan public policy think tank in Halifax, NS.