Expanding Canadian Medicare to include a national pharmaceutical benefit while controlling expenditures: possible lessons from Israel.

Abstract

In Canada, there is an ongoing debate about whether to expand Medicare to include a national pharmaceutical benefit on a universal basis. The potential health benefits are understood to be significant, but there are ongoing concerns about affordability. In Israel, the National Health Insurance benefits package includes a comprehensive pharmaceutical benefit. Nonetheless, per capita pharmaceutical spending is well below that of Canada and the Organization for Economic Co-operation and Development average. This paper highlights seven strategies that Israel has employed to constrain pharmaceutical spending: (1) prioritizing new technologies, subject to a global budget constraint; (2) using regulations and market power to secure fair and reasonable prices; (3) establishing an efficient pharmaceutical distribution system; (4) promoting effective prescribing behavior; (5) avoiding artificial inflation of consumer demand; (6) striking an appropriate balance between respect for IP rights, access and cost containment; and (7) developing a shared societal understanding about the value and limits of pharmaceutical spending. Some of these strategies are already in place in some parts of Canada. Others could be introduced into Canada, and might contribute to the affordability of a national pharmaceutical benefit, but substantial adaptation would be needed. For example, in Israel the health maintenance organizations (HMOs) play a central role in promoting effective prescribing behavior, whereas in HMO-free Canada other mechanisms are needed to advance this important goal.