The Globe on drugs (2)

Since it appears to be drug day at RPE, I should mention as a follow-up to a previous post on the National Pharmaceuticals Strategy that I did track down the document in question, a NPS Progress Report,  and that the Globe reporter did indeed misrepresent the estimates of the cost of that program. The Globe stated that the Report “pegs the cost of a national program for catastrophic drug coverage — drugs that place undue financial hardship on families — at as much as $10.3-billion”. This number comes from Figure 8 on page 32.

What was left unstated by the reporter was that this is a gross cost. Public drug plans already pay $6.6 billion, and would still kick in $1 billion after the national plan, so the net cost to taxpayers would be $4.7 billion. Furthermore, this was but one of four scenarios, and was the most costly one. The lowest net cost proposal was for an additional $1 billion in public expenditures.

In terms of total public and private costs, the plan does not change anything; it merely shifts the costs from private to public sector. Thus, even under the $10.3 billion version, the portion of total drug costs paid for by private insurers falls from $6.2 billion to $3.8 billion, and the portion paid out of pocket by families falls from $5.7 billion to $3.4 billion.

Finally, it is worth reiterating that there are cost savings that can be achieved through a more rational public system. Andre Picard’s Globe article speaks to some of these. Thus a national plan could actually reduce the total bill for drugs. No wonder the politically-influential drug companies do not like it.