CEP’s Julie White speaks to CURC Convention on pharmacare

Julie White speaking to Convention on pharmacare.

Julie White speaking to Convention on pharmacare.


I’m going to start by telling you about George Rozon, a member of CEP and President of one of our locals in Alberta. This is what he said about his situation when the Canadian Health Coalition held hearings on the problems people are having with drugs.

“I’ve had diabetes for over 40 years, and I’ve had heart bypass surgery and a kidney transplant. 

“Right now my anti-rejection drugs cost $2000 a month and are covered by the Alberta government, under a special program that covers kidney transplant drugs. The government did approach my work place drug insurance about covering these drugs, but the plan covers only 80% of drug costs and would have left me paying the other 20%. That’s $400 a month. A doctor at the renal transplant unit stepped in to say that patients should not have to pay for these drugs and so the government is paying. 

“My drug plan at work covers my other drugs and the drugs my wife needs. Together this cost $11,000 last year. The plan at work pays 80% and I pay the other 20%, so I pay $180 a month, $2,200 a year. 

“I’m worried about what happens when I retire in a few months. I have to take early retirement and leave work when I turn 55 years old. I won’t be covered by my drug plan at work and will still need $900 a month for drugs. I don’t know how much of this the Alberta government will pay under their insurance plan.  

“Another problem is that when I retire I’d like to move to Halifax to be close to my wife’s family and the grandchildren. But I have to check on whether the Nova Scotia government will pay for my drugs before I can move. 

“It puts a dim view on retirement when you’re spending so much money just to keep yourself alive. We have this idea that retirement should be a time to enjoy life and travel. Instead I have to think about whether I can afford my drugs. It’s pretty frightening when you look at it.”

(George Rozon, CEP Local 1118, Edmonton, Alberta)


How can this happen? We like to think that we have public health care in Canada, but the truth is that we have only 2/3 of a public health system — Tommy Douglas wanted hospitals, which we got first; doctors, which we got some years later; and a drug plan, which never happened.

Part 1: What we have

Provincial programs cover those most in need, on social assistance, some seniors based on income, certain conditions or types of drugs. These programs vary from one province to another, and are generally worse in the Atlantic — which is why George might have a problem moving to Nova Scotia. In some cases they are also an administrative nightmare. In PEI, not our most populous province, there are more than 20 drug programs that cover different people, different illnesses and different drugs. It’s a huge burden when you’re ill to find your way through all this.

Work based programs: In the absence of a public plan for everyone, unions try to negotiate drug care for our members. It’s the big part of our health care that is still private, handled through private insurance companies. Sixteen million Canadians are covered through work based plans — that’s half the population.

But unions are having trouble meeting people’s needs: 

a) How many workers have no drug plan? 42%. So only 58% of workers have drug plans at work. 

b) What do we mean by coverage? The plans vary — George had 80% coverage which is pretty good, but it wasn’t enough. 100% coverage is rare, lots of people have 70% or 60%. Often it’s the lowest paid workers who have the worst plans or no plans — non-union, part-time, temporary, young workers. They are the people who can least afford to pay for their own drugs — how fair is that?

c) The other obvious problem is that a work based plan is attached to the job. If you change jobs, get laid off or retire, the plan disappears. Like George, retirees are often not covered. Only one quarter (26%) of retirees over 65 are covered by a work based plan.

All this has nothing to do with your health or your need for drugs — it has to do with where you work and where you live. 

Three million people have no coverage or are under-insured — 10% of the population. A lot of people are paying a lot for drugs.


The Quebec situation is better in terms of access to drugs because everyone in the province must be covered — either through private insurance at work, or the public system. This is positive, because it means everyone has access to drugs and there would not be a George Rozon in Quebec. However, it is still a mix of private and public, not a single public system, and there are real problems. 

The more healthy working population is covered by private insurance, leaving the most needy at the cost of the public system. This means that the burden on the public system is a heavy one, while insurance companies get the “healthier” group to insure. The cost of the public system is escalating dramatically and the amount paid by Quebecers through the tax system is rising fast. Quebec faces the same problem of financial sustainability as the rest of the country, because nothing has been done to bring costs under control. (See below) Also, Quebecers face the same problem with mobility — if they move to another province, their coverage will change.

Part 2: This inadequate patchwork is threatened — by the rising cost of drugs

Over the last 10 years expenditure on drugs has been rising at an average of 11-12% a year, way above inflation, three to four times the rate of inflation. These increases are unsustainable — putting enormous pressure on both public and private plans.

Pressure on provinces — money is being sucked out of other aspects of health care to finance drug programs; cutbacks have been made in the provision of drugs, or contributions have increased; most provinces are calling for federal involvement as with our Medicare system (currently the federal government contributes only 3% of the cost of drugs). 

Pressure on private plans and in bargaining — employers are looking to cut costs, unions cannot negotiate improvements, are having a hard time holding on to our drug plans. There is a loss of benefits, as well as increases in workers’ contributions to premiums.

Reasons for the rising costs — The Pharma Companies

Why are drug costs rising so fast?

You will hear that we have an aging population; you will hear that people are able to leave hospital earlier with drugs to help them; and of course there are the new miracle drugs — they are called that because, if you can afford them, it’s a miracle. 

All of this is true to an extent, but all of it obscures the main and overwhelming reason for the increases. 

A study in BC found that 80% of cost increases are due to “me-too” drugs.

What are “me-too” drugs?

They are the same drug, or almost same drug as one already on the market — there might be a very slight difference, it might be a different dose or a different size or a different colour, but therapeutically it’s the same drug. This “me-too” drug gets a new approval from Health Canada. Of the drugs that Health Canada approves each year, 85% are “me-too” drugs. A drug gets approval if it is better than a placebo — better than a sugar pill — but it is never compared to any other drug already on the market, it does not mean because it is newer that it is better. In fact it could be worse, because it has not been used widely in the general population, it’s less tried and true. But the drug may get a new name, a new package and for sure it gets a new, much higher price — and then it goes on the market.

Now what you would be asking about now is this: But how can they sell the same drug at a higher price? That just doesn’t work because people wouldn’t buy it.

Comparison of acetaminophen from Shoppers Drug Mart — exactly the same product, same number of pills, same drug. One costs 58% of the other brand name drug. How do they do this? Who would buy this? Think about another product — a pair of jeans — same thing, side by side on a shelf, one costs more. 

The answer is: advertising — lots of advertising. Drug companies spend three times the amount on advertising that they spend on research. It works or they wouldn’t do it. But acetaminophen is an over-the-counter drug. For prescription drugs, its much more insidious, much more sinister.

Julie White shows that ads lead people to buy higher priced brand name over lower priced generic drug which is the same.

Julie White shows that ads lead people to buy higher priced brand name over lower priced generic drug which is the same.


Prescription Drugs — Getting to the doctors

Standing between you and the prescription drug is the doctor. So, there is a huge focus on reaching your doctors and convincing them to prescribe the newest, most expensive drug. It’s estimated that drug companies spend over $30,000 a year on every doctor in Canada in order to do this. This is the cost of the sales reps who constantly visit doctors, bringing blotters, pens, charts, information brochures and free samples, plus free trips, conferences and payments for presentations. 

But what is really worrisome is that doctors are not getting information about drugs from anywhere else —the only material they get is from the drug companies, often the only on-going education and update they get is from the drug companies. The Canadian Medical Association Journal has stated that leaving education with the pharmaceutical companies “compromises the ethical underpinnings of the profession.”
Research has shown that all this has an impact on prescribing. This is how generics and cheaper brand names are by-passed in the rush to the “new” and more expensive drugs. 

Experts in this area of pharmaceutical drugs tell me that they wouldn’t personally take a drug that had been on the market less than 3 years. They are too untested in the real world, and when drugs are recalled that usually happens in the first 2-3 years. Like Vioxx, for example, the pain killer that killed thousands of people in North America — except in BC where the government refused to put it on the drug formulary, its drug list.

The biggest selling drug in Canada

So doctors only have information from drug companies, and the companies push expansion to other uses without further research, e.g. cholesterol and Lipitor. Lipitor is the biggest selling drug in Canada and in the world (nine million prescriptions a year in Canada). There is consensus that this drug is of real benefit in preventing heart incidents in patients who have already experienced a problem, and possibly those who have a family background of heart disease. But it is being prescribed very widely as a preventative to healthy people who have no family background.

While one out of every 8 adult Canadians now takes a cholesterol lowering drug, there is ongoing and major controversy in medical circles about this widespread preventative use of this drug. The role of cholesterol in the body is not fully understood and people with high cholesterol do not necessarily have heart attacks, while people with low cholesterol do get heart attacks. The relationship is not a direct causal one. The drug does have serious side effects and now comes with a warning. Also, the “high cholesterol”

line has twice been lowered to bring far more people into the category of getting these prescriptions. As this goes forward, the benefits of these cholesterol-lowering drugs are in question. 

Meanwhile we do know for certain what prevents heart disease and that is what your mother told you — eat your veggies and go out to play. In other words, diet and exercise. Of course, the pharmaceutical companies don’t do research on diet or exercise, nor do they educate doctors about those issues.

And then of course there is the restaurant that announces “Foie gras to die for — just don’t forget your Lipitor.” All this reminds me of the Hormone Replacement Therapy scandal. At its height, the advertising blitz said that all women were supposed to take HRT from the age of 50 until death, and millions of women did. We were told that it didn’t just take away the side-effects of menopause, it made us look younger, feel more alive, and that it protected us from cancer. That is until just a few years ago, when they found that HRT causes heart attacks, blood clots, gall stones, incontinence and breast cancer. Now it’s advised only in a small number of cases, at a low dose and for the most limited time possible. But the drug companies had made a fortune.

Part 3: Resolving the problems — A National Drug Plan

Where I come from originally, in England, prescription drugs cost $12 per prescription — no matter what the drug (except for children under 18, people over 65, anyone with a chronic condition, and people on social assistance, who don’t pay anything).

Here in Canada we are told all the time that it’s too expensive to have a national drug plan. Then why does every other industrialized country have it, except for two — Canada and the United States. 

Also, a public plan would be cheaper, a public plan could make it sustainable.

Administration costs

We know that public plans cost less to administer than private plans. In the private insurance plans through work, there are thousands of insurance plans and millions of individual claims and all that has to be administered. Employers and workers pay premiums for work-based drug plans and only 75% of the premium costs buy drugs. The other 25% pays for all the administration, plus marketing, consultants and profits. 

Bargaining to control costs

As an individual you can’t have any impact on the cost of your drug, you can’t negotiate with the drug companies. But in countries where there are single payer drug plans, the governments do this. In New Zealand for example, a study on four different drug categories showed they were getting drugs 50% cheaper than we are. In fact, the Western provinces have recently announced an initiative to try and develop a way to buy drugs together so that they can negotiate the prices with the drug companies.

Prescribing practices

Clearly, we need an independent public agency that provides information and education to doctors about drugs and prescribing practices. We could have this as part of a public drug plan.

The Pharmacare Campaign

The Canadian Health Coalition has taken on the fight for a national public drug plan. 

Look at the report called “Life Before Pharmacare.” It’s a report on hearings held across Canada on the problems people are experiencing with their prescription drugs. You can get it and other reports and fact sheets from the website:

The coalition is now involved with a new piece of research, looking at all the issues around the costs and savings of a national drug plan for Canada. This report will look at plans in other countries and some of our provinces. We want to be able to respond to those who say it’s too expensive.

At some point next year that report will be out and we’ll certainly be lobbying on that — please join us.

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