Response to the New Brunswick Government Consultation on a Prescription Drug Plan for Uninsured New Brunswickers

Transcription

1 Response to the New Brunswick Government Consultation on a Prescription Drug Plan for Uninsured New Brunswickers Brief submitted by The New Brunswick Nurses Union April 2012

2 Background The New Brunswick Nurses Union (NBNU) is a labour organization, representing over 6000 registered nurses in the Province of New Brunswick. The nurses we represent practice in acute care facilities, long term- care facilities, correctional facilities and the community. As an organization, we acknowledge the direction the government is taking on this very important matter and we thank the Advisory Committee on Health Benefits for this opportunity to participate in this consultation process and provide our views from the perspective of public health policy. We are pleased that this plan will allow input and discussion around all provisions of the program. We look forward to playing an active role in the ongoing development process of a prescription drug plan for all New Brunswickers. The NBNU welcomes the government s commitment to a made-in-new-brunswick prescription drug plan by looking at ways to address the needs of many different New Brunswick families who require drug coverage and provide an approach to funding that is both affordable in the short term and sustainable in the long run. We commend the New Brunswick government for embarking on this consultation process on designing a prescription drug plan that will assist New Brunswickers afford the drugs they need. NBNU believes that all New Brunswickers deserve a right to have access to the most appropriate, highest quality medications and health services, regardless of where they live in the province and whether they are receiving treatment in hospital or at home. 2

3 The following are our recommendations: Recommendation 1: That the NB government establish a provincial prescription drug program that would be publicly funded and administered. Recommendation 2: That the NB Government fund a thorough and reliable research project on funding for a public prescription drug program to analyze the above possibilities in detail. Recommendation 3: That the plan should have a premium based on ability to pay and adjusted for different income levels. Recommendation 4 That the provincial formulary cover the complete cost of all essential drugs and that decisions on which drugs are paid for are based on independent evaluation of safety, effectiveness, and value for money. Allowances for special needs and circumstances are recommended. Recommendations 5 That a provincial strategy for bulk purchasing be developed to obtain reductions in drug prices. Recommendation 6 That education to professionals be highly considered to improve prescribing behaviors so that drugs are used only when needed, and the right drug is used for the right problem. Recommendation 7 That the new publicly-funded prescription drug program not have any limitations and/or restrictions for people who have pre-existing conditions. Recommendation 8 That all employers be involved in some form of cost sharing in the provincial prescription drug program. 3

4 Introduction Pharmaceuticals are a vital component of our health care system. They save lives, treat diseases, and enhance the quality of life. New forms of drug therapy are enabling more patients to be treated at home and close to their families. By shortening and preventing hospital stays, pharmaceuticals can also ease the burden on health care facilities and services. Despite these benefits, pharmaceuticals give rise to a number of challenges related to safety and effectiveness, access, optimal drug therapy and health system sustainability. In particular, prescription drugs constitute the fastest growing and second largest category of health care expenditure. 1 New Brunswick is faced with the challenge of optimizing the benefits of prescription drugs for New Brunswickers while managing the risks and complexities associated with this rapidly evolving sector. At the same time, the drug costs are continuing to rise, and many New Brunswickers are concerned that this may not be sustainable. Spending on drugs is increasing faster than all other health care spending. In 2010, the total amount spent by all payers on prescription drugs in New Brunswick was over $625 million. This is more than double the amount spent in This current rate of increase in drug costs is unsustainable. Escalating spending on drugs is undermining current drug plans and will threaten the sustainability of any system unless restrained. We urgently need a new system that would be cost effective, accessible, promote the safe and appropriate use of drugs and be public and affordable. Many New Brunswickers cannot afford to take medications once they make it to market. Some new drugs can cost hundreds or even thousands of dollars for a course of treatment. Many people have drug coverage provided as part of their employee benefits, while others are covered by government drug plans. Some have no drug coverage at all. Our current patchwork of public and private drug plans is inequitable, because obtaining coverage for drug costs is not determined by need, but by where you live and work. Here are some important New Brunswick facts: According to the Canadian Cancer Society, New Brunswick is one of only two provinces in Canada without a catastrophic drug coverage program in place; At one point in time, 11% of New Brunswick households are at risk of facing catastrophic drug costs; Prescription drugs administered outside the hospital setting are not paid for by the Government of New Brunswick and must be paid by the individual; 1 Federal/Provincial/Territorial Ministerial Task Force on the National Pharmaceuticals Strategy. (2006). National Pharmaceuticals Strategy Progress Report. Ottawa: Health Canada. 4

5 As many as 33% of New Brunswickers have no private health care plan; Those who have a private health care plan may find their plan does not pay for new or expensive drugs and treatments. 2 It is also important for New Brunswickers that there be an equitable access and fair distribution of public services which contribute to a healthy population. Access and distribution are often referred to as the social determinants of health which include, in this case, gainful employment income, education, access to health care, and health insurance. All are inter-related and when in imbalance can negatively impact the health of individuals and populations. Income, however, has been determined to be the most significant social determinant of health. One s level of income has a direct correlation with an individual s ability to undertake higher education, provide adequate housing, purchase healthy food, provide dental hygiene, and access to prescription drug programs. Similarly, education is another key social determinant of health. Studies have shown that people with higher education tend to be healthier. Higher education leads to higher incomes, better job security, and better access to a wider range of health care services and resources. Education increases one s overall understanding of how the individual can promote his/or her own health through individual action. A provincial, public system would enable government to have more impact on prescribing practices, including the ability to inform doctors and others through expert opinion and medical research. Improved prescribing would also be achieved by making better use of pharmacists, nurse practitioners, and other health professionals working together as a team. Canada s publicly- funded universal health care system provides our private businesses with a competitive advantage over businesses in the United States. A national public drug plan would strengthen that advantage. Our public system operates much more efficiently than the largely private system in the U.S. Health care spending in the U.S. is well over $5000 per person almost two and a half times Canada s per capita spending. 3 With public health insurance, Canadian employers also enjoy more workplace stability. In the United States, every significant strike or bargaining conflict involves health insurance costs. 4 If we fail to address rising drug costs, labour-management conflicts over work-place benefit plans will also intensify in Canada. 2 Canadian Cancer Society. (2011). Catastrophic Drug Coverage. 3 World Health Organization (2005). World Health Report, pp August 15, AFL-CIO (2005).Quality, Accessible Healthcare.Nov. 17,

6 Universal Drug Plan for all New Brunswickers NBNU believes that all New Brunswickers should be publicly insured for essential drugs for healthy living. The goal would be a universal plan, providing first dollar coverage to all New Brunswickers. This means the entire cost of drugs on the provincial formulary would be covered without any co-payment or deductibles. New Brunswick s Prescription Drug Plan (PDP) should be a public plan where it would provide essential drugs approved on a provincial formulary to all New Brunswickers with all costs covered. Seniors, children, those with disabilities, those with medical conditions requiring high-cost drugs and those on low incomes should be immediately relieved of any drug costs. NBNU further believes that a properly constituted public drug plan must be based on three fundamental objectives: 1. Equity and access: Ensure universal and equitable access for all; 2. Drug safety: Improve the safety and appropriate use of drugs; and 3. Cost control: Ensure the cost of drugs is sustainable for public finances. Like Medicare, the provincial PDP would benefit all New Brunswickers. Such a plan would be a public plan similar to the provision of other health services, like visits to doctors and hospitalization, providing essential care to everyone. Recommendation 1: That the NB government establish a provincial prescription drug program that would be publicly funded and administered. How would we pay? The rapid rise in drug costs is primarily due to the ongoing substitution of newer, more expensive drugs in place of existing, less expensive products. Of the 231 drugs with new ingredients introduced in Canada over the ten years from 1996 to 2005 inclusive, only 34 (15%) provided substantial improvement over existing drugs. 5 The rest are me-too drugs that offer little or no therapeutic advances over existing therapies, but were found to be responsible for 80% of the increased expenditure on drugs in BC. 6 5 Calculated from Patent Medicine Prices Review Board. Annual Report P. 28 and Annual Report 2001, 2002, 2003, 2004, Annex 2. Ottawa 6 Morgan, S>G> et al (2005, October) Breakthrough drugs and growth in expenditure on prescription drugs in Canada. British Columbia Medical Journal. Vol. 331, pp

7 The PDP could also replace the more expensive private insurance plans, reducing administrative costs and eliminating profits, sales and commissions. As a single payer system, the PDP would have the negotiating strength to obtain lower prices for drugs and have the capacity to introduce controls. To fund the PDP, the government contribution to drug cost would have to be increased from its current level. The substantial drug costs now paid only by those employers who provide work-based plans could then be replaced by an equitable tax on all employers. This PDP plan would benefit employers by removing responsibility for the health care of their workers to an equitable and cost-controlled system. Paying for drugs: insurers, employers and workers For all employers, public health care is a major advantage. It relieves them of responsibility for workers healthcare costs, and it averts the serious expense and disputes experienced in the U.S. Employers find that private drug plans are expensive, complex to negotiate and a source of increasing disputes and strikes. The administration of private drug plans is an enormous expense. Moving to a provincial PDP would save a significant amount of money, as does our Medicare system compared to private health insurance. Paying for Drugs: individuals Paying for your own drugs puts a significant burden on many New Brunswickers. In this plan, additional funding would be available from controls on the cost of drugs, increased government funding, contributions from additional employers, and savings of money now going to insurance companies for administration, profits and marketing. These funds could be applied to substantially reduce out-ofpocket expenses for individuals. This would provide at least for much broader first dollar coverage for drugs than now exists. NBNU estimates that a public system could finance the additional costs of increased usage by those now without adequate insurance, reduce the amount currently paid by contributing employers and substantially decrease payments by individuals. Recommendation 2: That the NB Government fund a thorough and reliable research project on funding for a public prescription drug program to analyze the above possibilities in detail. 7

8 Should the plan have a premium? Should the premium vary by level of income? NBNU is of the opinion that while the first dollar coverage would be provided for a broad definition of those in need, others would pay a reasonable and affordable premium, adjusted for different income levels. For a phased-in period, while cost-saving mechanisms would be coming into effect, this would provide for additional financing for the new system during its introductory period. With such a public system, work-based plans would be unnecessary for basic drug coverage, but could supplement the public service. This could be done in the same way as additional health services such as semi-private hospital rooms and physiotherapy are currently negotiated. Recommendation 3: That the plan should have a premium based on ability to pay and adjusted for different income levels. What deductibles, copayments and maximums should the plan include? Should these vary by level of income? NBNU believes that instead of shifting drug costs onto patients with co-payments and deductibles, government should pursue other approaches to control the cost of drugs. The NB government can reduce the overall amount they spend on drugs by setting up a provincial formulary that would not cover all drugs, but only those that are the most cost effective. Another policy would be a system of reference-based pricing, in which the formulary would restrict what the government will pay to the price of the least expensive option, unless there is a good medical reason, such as bad side effects. Another approach is to work with doctors on the way they prescribe medications. Some doctors may prescribe expensive medications when cheaper choices are available, or give them to patients who may not need them. The NB government could influence how doctors prescribe, either by setting limits, or by educating them about better prescribing. New Brunswick could also do more to regulate drug prices by negotiating better prices with the drug companies and do more to control the price consumers pay for drugs. The NB Government s recent endorsement of a generic drug pricing policy correlates with and further supports our aforementioned proposal. This initiative will result in large annual savings for both the government and the private drug programs. 8

9 Recommendation 4 That the provincial formulary cover the complete cost of all essential drugs and that decisions on which drugs are paid for are based on independent evaluation of safety, effectiveness, and value for money. Allowances for special needs and circumstances are recommended. Recommendations 5 That a provincial strategy for bulk purchasing be developed to obtain reductions in drug prices. Recommendation 6 That education to professionals be highly considered to improve prescribing behaviors so that drugs are used only when needed, and the right drug is used for the right problem. How should the plan deal with individuals who have pre-existing medical conditions? NBNU strongly feels that there should be no limitations and/or restrictions for those with pre-existing conditions. The greatest challenge for New Brunswickers living with acute or chronic diseases remains affordability and access to medications, treatments, devices and supplies. The costs of the illness are overwhelming to many people who do not have insurance coverage or financial assistance. New Brunswick needs a public prescription drug program that covers everyone because people with pre-existing diseases will never be able to get drug coverage through private insurance plans. Recommendation 7 That the new publicly funded prescription drug program not have any limitations and/or restrictions for people who have pre-existing conditions. Should there be a waiting period after enrolment before benefits become available? How long? NBNU feels there should be no waiting period after enrolment in the provincial plan. 9

10 How should employers be involved? NBNU feels that the plan should not come under Medicare, so there should be some involvement of employers in the plan s costs and operations. NBNU further agrees that employers who do not presently offer a prescription drug insurance plan to their employees should be required to contribute to the provincial PDP. In addition, and as stated previously, the substantial drug costs now paid only by those employers who provide work- based plans could then be replaced by an equitable tax on all employers. Recommendation 8 That all employers be involved in some form of cost sharing in the provincial prescription drug program. 10

11 Conclusion A provincial drug plan providing first dollar coverage, established alongside a rigorous drug assessment process, would not only ensure greater fairness in accessing medications and improve drug safety, but would also help contain the inflationary costs of drugs. New Brunswick needs a public prescription drug program if we are to eliminate the inequities that people deal with on a daily basis when it comes to access to prescription drugs. The publicly-funded provincial plan would not only improve access to necessary drugs, but would reduce costs through a more efficient and controlled system. NBNU calls on the New Brunswick government to take responsibility for the provision of prescription drugs, an element of health care no less critical than hospitals and physicians. We need a provincial drug plan a plan that would be publicly-funded and administered, cost controlled, provide universal access and ensure the safe and appropriate use of drugs. 11