British Columbia's PharmaCare Program: Fair or Foul?

Abstract

In this issue of Healthcare Policy/Politiques de Sante, Steve Morgan and colleagues present a rigorous and comprehensive examination of pharmacare policy in British Columbia, specifically the introduction of co-payments for seniors in 2002, followed by an income-based “Fair PharmaCare” Program in 2003. Fair PharmaCare achieved its primary objective of reducing public expenditures on pharmaceuticals – an unsurprising accomplishment. Although politically hazardous, reducing pharmacare expenditures is technically straightforward; simply model co-payments and deductibles to achieve the budgetary target. The details of the plan, such as deductibles, co-payments and maximum contributions at different levels of family income, were designed to support other policy objectives, including a distribution of contributions and benefits more in line with ability to pay and improved access to medicines for low-income families. As Morgan and colleagues report, the first of these objectives was met. Although the second was not achieved, access was maintained – at least for two important and commonly used classes of medicine, antihypertensives and cholesterol-lowering agents (the only drugs examined). Does the program qualify as “fair”? Several of Morgan and colleagues’ findings raise questions about both the fairness and the adequacy of the program. First, average private payments for prescription drugs as a proportion of household income increased for low-income families (and at all other income levels) following the introduction of Fair PharmaCare. The financial burden of prescription drugs was heightened rather than alleviated. Second, average total public and private drug expenditures were positively related to household income for seniors and, except for households below the fourth percentile of income, were unrelated to income among non-seniors (Hanley et al. 2006). Given the strong relationship between income and health, this suggests that access to drug treatment in British Columbia under Fair PharmaCare – and its predecessor programs – is based less on need than ability to pay. The implications of these findings for the poor and sick are clear. Given the co-payments required under Fair PharmaCare, households that include people with chronic health problems, especially low-income households, face large and increasing private costs of prescription drugs. Although private payments are limited by maximum contribution levels that vary from 2% of gross household income for families with incomes less than $15,000 to 4% of gross income for families with incomes greater than $30,000, these sums are not trivial for low- and middle-income households. Finally, for both antihypertensives and cholesterol-lowering drugs, discontinuations of treatment “varied by income strata, with the greatest number of discontinuations generally among those in the lowest income deciles” (Caetano et al. 2006). Further, there was little difference in the rate of initiation of these treatments across income strata. These patterns, which predated but continued under Fair PharmaCare, defy what would be expected if utilization were needs-based and suggest that low-income patients may be failing to obtain, fill and renew their prescriptions for long-term treatments because of cost considerations. If we accept the premise (and not everyone does) that access to necessary medicines should be based on need and that contributions should reflect ability to pay, the obvious antidote to these concerns is a universal pharmacare program that provides first-dollar coverage (i.e., no deductibles or co-payments) funded from progressive taxation. As Morgan and colleagues point out (Morgan et al. 2006), an expanded funding role for government would increase its ability, as the sole or dominant purchaser of pharmaceuticals for the province, to control drug prices. Perhaps more importantly, a plan with first-dollar coverage would address the threat to social solidarity inherent in income-based programs. Citizens who are more affluent (and, as a consequence, more politically influential and, on average, healthier) have little stake in the adequacy of income-based pharmacare programs. They pay more and receive less than poorer, sicker citizens and can comfortably pay privately, either through insurance or out of pocket, for the medications they need. They may be content with – or even welcome – a public program that covers a narrow range of medicines and provides meagre subsidies. In contrast, “we’re all in it together” with universal, first-dollar coverage, as is now the case for physician and hospital services under Canadian medicare. BC’s Fair PharmaCare program may be fairer than its predecessor, but it is still unworthy of emulation by other jurisdictions.