Budget 2019: the federal government proposes to create a national drug agency

By Andrea Lubeck | March 20 2019 01:30PM

In its 2019 budget, the federal government decided to adopt recommendations made by the Advisory Council on the Implementation of National Pharmacare and create, notably, the Canadian Drug Agency.

This measure and two others which accompany it, “mark important first steps on the way to a system that helps all Canadians get the prescription drugs they need to stay healthy,” says the Department of Finance.

Negotiating drug prices

In particular, the agency would be responsible for assessing the effectiveness of new prescription drugs and negotiating drug prices on behalf of Canada’s drug plans and recommending which drugs represent the best value-for-money for Canadians. In cooperation with provinces, territories and other partners, it would also identify which drugs could form the basis of a future national formulary, says the Department of Finance.

To set up the agency, the budget proposes that Health Canada receive $35 million over four years, starting in 2019–20, “to establish a Canadian Drug Agency Transition Office to support the development of this vision.”

National strategy for high-cost drugs

Budget 2019 also proposes 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.

This investment would include the creation of a national strategy for high-cost drugs for the treatment of rare diseases that would gather and evaluate evidence on high-cost drugs and improve the consistency of decision-making and access. It would also involve negotiating prices with drug manufacturers, and ensure that effective treatments reach the patients who need them.

Finally, the Department of Finance has proposed the creation of a National Formulary of Prescribed Drugs. This “comprehensive evidence-based list of prescribed drugs” would provide the “basis for a consistent approach to formulary listing and patient access across the country.”

For its part, the Canadian Life and Health Insurance Association said it supports the budget's direction towards better coordination of efforts to reduce the high costs of medications.

The association says it welcomes the development of a national formulary and considers this “an important step to ensuring a more common level of coverage regardless of where Canadians live or work.” The CLHIA also welcomes the budget’s proposal for funding to address high-cost drugs for rare diseases.

Urging a sensible approach to pharmacare

"Our industry has been urging the federal government to take a sensible approach to pharmacare," said Stephen Frank, CLHIA's President and CEO. "One that allows public and private insurers to work together to respond to Canadians' top concerns – expanding access to those who need it and controlling rising drug costs while protecting the workplace benefits that the vast majority currently have."

The CLHIA cited research by Abacus Data, conducted this month, indicating that “over 80 per cent of Canadians want governments to focus tax dollars on a solution that provides prescription drug coverage to those who need it, not those who have coverage through workplace plans.”

The same research found that 94 per cent of those surveyed favor an approach to pharmacare that combines public and private coverage and that would keep group benefit plans intact.

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