Here is a look at drug costs as part of reforming healthcare

1. NATIONAL
PHARMACARE –
AFFORDABLE OR
NOT?
PaulYoung CPA CGA
November 15, 2020

2. PaulYoung - Bio
• CPA, CGA
• Financial Solutions
• SME – Business Process Changes
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – SupplyChain Management
• Academia – Advance Accounting, Public
Finance and Advanced Management Systems
Contact information:
Paul_Young_CGA@Hotmail.com

3. Agenda
■ What is national pharma care
■ Canada and Drug Costs
■ Top six reasons for high drug costs
■ Countries and Pharmacare
■ Healthcare Ranking
■ Pharmacare Blog
■ Pharmacare Blog
■ Issues with National Pharmacare
■ Drug Costs / Canada
■ Liberal Plan
■ Pharmaceuticals
■ Summary

4. Introduction
■ Canada has some highest drug costs in the world https://theconversation.com/why-the-us-has-higher-drug-
prices-than-other-countries-111256
■ Many Canadians have private insurance which means any changes to drug programs need to also consider the
role of private insurance - https://www.monster.ca/career-advice/article/how-much-are-health-benefits-canada
■ Drug procurement processes need to be refine including all levels of government as part of reducing drug costs
■ Accessibility to experiment and/or new drugs needs to be fix.
■ No government in the past has done a full pharmacare program due to its cost.The liberals are throwing money
around without a proper plan.These same liberals in charge of Federal Liberals were also part of fail Ontario
Liberal governments - https://www.huffingtonpost.ca/daniel-dickin/ontario-liberal-scandals_b_7097748.html
■ Alternative treatments including the use of smart devices -https://econsultancy.com/internet-of-things-
healthcare/

5. WHAT IS PHARMACARE?
Source - https://www.pharmacists.ca/advocacy/pharmacare-20/

6. DRUG COSTS / CANADA
Source - https://www.pharmacists.ca/advocacy/pharmacare-20/

7. Top Six Reasons for High Drug Costs
Source - https://www.businessinsider.com/ap-multiple-factors-cause-high-prescription-drug-prices-in-us-2015-9
1. Lack of proper price controls – Government have failed to negotiated proper drug pricing
2. Lengthy Patents - Patents last longer than in other countries, usually giving a drug's maker exclusivity that
prevents competition for 20 years from when the patent is issued. Because patents are filed while drugs are still in
testing, that clock starts ticking long before the drug goes on sale.
3. Limited Drug Protection - For many drugs, there isn't enough competition to hold down prices. Many older
generic drugs were priced too low to be profitable, so some drug makers stopped making them. Once only one
company or two companies make a drug, the price usually shoots up.
4. Small markets - Many new drugs are for rare conditions or cancer subtypes involving a particular genetic
mutation, so they might help just thousands or hundreds of patients.To recoup research and development costs,
drug makers set high prices, though they offer many patients financial assistance.
5. R&D and Development costs - Research is becoming increasingly expensive. Industry groups say it can take about
a decade and well over $1 billion to get a new drug approved, though that includes development costs for the
many drugs that don't work out.
6. Fewer generics - After a huge wave of patent expirations from 2011 through 2013 that brought generic versions of
drugs taken daily by millions of patients, the number of popular drugs going off patent has declined.

8. Healthcare
Ranking
Source -
https://www.bloomberg.com/news/articles/2018
-09-19/u-s-near-bottom-of-health-index-hong-
kong-and-singapore-at-top

9. Blog -
Pharmacare
Liberals are consistent that when there is bad news then rush out a
feel good policy before the policy has been properly vetted.
https://www.thepostmillennial.com/trudeau-government-attempts-
to-divert-public-outcry-for-resignation-with-pharmacare-
announcement/?fbclid=IwAR3oik_WiFkLqKQrWUpOFsBYSQnkRcUc
PZb4UYSjLdJ1UiSL1GLMbWjW8EU
Or
PBO
https://business.financialpost.com/pmn/business-pmn/if-canada-
wants-national-pharmacare-taxes-will-have-to-go-up-former-pbo-
warns
Auditor-General Ontario
https://globalnews.ca/news/4979855/ontario-pharmacy-fraud-
prescription-for-profit/ or
https://www.cbc.ca/news/canada/toronto/pcs-announce-changes-to-
ohip-1.4729873
I guess lessons were not learned by @DrEricHoskins from the poor
Ontario plan!

10. Eric HoskinsTrack Record
■ https://www.cbc.ca/news/politics/pharmacare-hoskins-recommendations-final-report-1.5171517
■ https://www.slideshare.net/paulyoungcga/2019-election-pharmacare-canada-june-2019 Libs also do not listen to AG reports and/or believe in
oversight!
■ @DrEricHoskins – Ford is fixing your bad Ontario plan - https://www.inhalton.com/province-announces-changes-to-prescription-drug-coverage-in-
ontario
■ Chretien did not move on the pharmacare due to the cost - https://nationalpost.com/news/john-ivison-national-pharmacare-report-bullish-on-
universal-program-but-offers-few-ideas-on-how-to-pay-for-it
■ Canada already has structural deficit of $18B. Canada has unaffordable government and yetTrudeau thinks there is more money to be spent, right?
https://www.slideshare.net/paulyoungcga/2019-election-fiscal-management-canada-june-2019
■ I am not surprised asTrudeau has people on his team that led to the train wreck in Ontario - https://www.slideshare.net/paulyoungcga/doug-ford-and-
ontario-pc-government
■ Drug prices are an issue, but there needs to be a proper path to fixed drug prices including working with big pharma - http://theconversation.com/why-
the-us-has-higher-drug-prices-than-other-countries-111256
■ Pharmacare / costing - https://www.cbc.ca/news/opinion/pharmacare-report-1.4852503
■ There are huge issues with delivering of healthcare dollars - https://globalnews.ca/news/5268965/canadian-health-care-stuck-in-the-60s/
■ This program is not well thought out as many people have private insurance. I believe there are things to be done via synergy with various
governments as well as existing programs. I am not about a new agency unless there are annual audits (value for money and performance
measurement)
■ You can bet this pharma care policy will be part of the Liberals platform as way to force the CPC into a corner.
■

11. Issues with Pharmacare
Source - https://business.financialpost.com/opinion/dont-blow-up-pharmacare-as-we-know-it-just-fill-the-
gaps?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook&fbclid=IwAR0vak_SsBmY09OldJYug
Z008yQ46DOld7Djvon-WVS_pR951tc7PoSNOTc#Echobox=1561462205
• The total private drug claims market grew by 4.7% CAGR between 2012 and 2016, with the number of claimants (2.1% CAGR) and
cost per claimant (2.6% CAGR) growing at a similar pace.The cost per claimant was driven both by growth in number of claims per
claimant (1.4% CAGR) and in cost per claim (1.2% CAGR). 3.5% of the 4.7% growth is attributable to increased utilization (number of
claimants, 2.1% and claims per claimant, 1.4%), whereas only 1.2% is due to the increased cost of drugs (cost per claim), often
referred to as drug mix. Source - innovativemedicines.ca/wp.../20180809_Cost-Drivers-Analysis-Report_EN_Final.pdf
• Government should be looking at procurement of drugs as well as consolidation of existing drug programs –
• Pharmacy fraud - https://globalnews.ca/news/4979855/ontario-pharmacy-fraud-prescription-for-profit/
• Review of generic drug programs - www.auditor.on.ca/en/content/news/17_newsreleases/2017news_3.09.pdf
• More control over fraudulent claims - https://www.cbc.ca/news/canada/toronto/toronto-auditor-general-finds-city-workers-
spending-tens-of-thousands-on-orthotics-physio-1.4041928
• Review of all government programs - www.auditor.on.ca/en/content/annualreports/arreports/en17/v1_309en17.pdf

12. Drug Costs
Source - https://www.canadianmanufacturing.com/manufacturing/health-canada-announces-changes-aimed-at-dropping-prices-of-patented-drugs-237258/ or
https://www.benefitscanada.com/news/feds-announce-final-changes-to-canadian-drug-pricing-regulations-133927 or https://healthydebate.ca/2011/07/topic/cost-of-
care/pharmacare
Health Canada's long-awaited amendments to patented medicine regulations include allowing the
arm's-length Patented Medicine Prices Review Board to consider whether the price of a drug reflects
the value it has for patients
• United Kingdom uses a co-pay systems - https://healthydebate.ca/2015/03/topic/pharmacare-2. Canada should
look at the co-pay systems
• No pharmacare program should be rushed out the door until there is total review of the policy including private
insurance plans http://www.cmaj.ca/content/187/7/491
• Harper work with the provinces in terms of drug procurement - https://policyoptions.irpp.org/fr/magazines/the-
fault-lines-of-federalism/health-care-funding-needs-and-reality/
• Harper help negotiate CETA. CETA has upsize including access to affordable drugs -
https://www.cbc.ca/news/politics/5-ways-the-canada-eu-trade-deal-will-impact-canadians-1.2125510
• Harper look at generic drug industry - https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03026.html
• Eric Hoskins sat on the committee as such he was a disaster when it came to Ontario’s pharmacare -
https://www.benefitscanada.com/benefits/health-benefits/ontario-auditor-general-report-takes-aim-at-
generic-drug-prices-chronic-disease-programs-107649

13. Liberal Plan
Source - https://www.cbc.ca/news/politics/pharmacare-hoskins-trudeau-liberals-
1.5311601?__vfz=medium%3Dsharebar or https://www.thoroldnews.com/national-news/re-elected-
• Liberals costing for Pharmacare has not been
signed off by the PBO
• Liberals have been a disaster on any policy
implemented (Both costing and inefficient) -
https://www.slideshare.net/paulyoungcga/why-
did-justin-trudeau-fail-at-keynesian-economics
• No federal government has ever been successful
at pharmacare –
• Patent laws along with approval of drugs would
requirement work between all levels government
and the private sector -
https://www.reuters.com/article/us-canada-
pharmaceuticals/canada-enacts-drug-price-
crackdown-in-blow-to-pharmaceutical-industry-
idUSKCN1UZ0XH

14. Pharmaceuticals
Source - https://www.msn.com/en-ca/money/topstories/exclusive-drugmakers-offer-canada-cdollar1-billion-to-scrap-some-pending-pricing-rules/ar-
BB1b1UfP?ocid=st
• Drug Costs
• Innovation - https://www.pennlive.com/opinion/2020/10/innovation-and-transparency-not-price-fixing-will-
lower-prescription-drug-prices-opinion.html
• Fixing key areas like patent length, approval process for new drugs, consolidation of govt programs around the
globe in terms of drug procurement - https://www.nature.com/articles/s41408-020-0338-x
• Complete overhaul of drug development and approval process -
https://www.commonwealthfund.org/publications/fund-reports/2020/oct/getting-lower-prescription-drug-
prices-key-drivers-costs

15. Biotech / Pharmaceutical
Here is my work on the pharma/biotech sector - https://www.slideshare.net/paulyoungcga/biotech-and-
pharmaceutical
According to market research, the
worldwide pharmaceutical market was
worth nearly $1.3 trillion in 20191 and the
top 10 pharma companies accounted for
around a third of sales ($392.5 billion).
Below is a graph of this year’s top 10 pharma
companies, ranked by pharmaceutical
revenue, along with a table with more on
their performance compared to last year.
Pfizer (NYSE: PFE) maintained pole position
with full year revenues of $51.75 billion, but
sales declined by 4% year-on-year as key
drug patent expiries and Ibrance
(palbociclib) and Lyrica (pregabalin)
underperformed1. Source -
https://www.thepharmaletter.com/article/a
nnual-revenue-of-top-10-big-pharma-
companies

16. Summary
■ Innovation will be part of the key to fix issues related to healthcare -
https://www2.slideshare.net/paulyoungcga/reforming-healthcare-around-the-world
■ Drug costs - https://theconversation.com/why-the-us-has-higher-drug-prices-than-
other-countries-111256
■ A national pharma care have to be well thought out.The problem is whatever
government usually touches in terms of policy it tends to go south in a big hurry
– PBO - https://business.financialpost.com/pmn/business-pmn/if-canada-wants-
national-pharmacare-taxes-will-have-to-go-up-former-pbo-warns
■ Taxes have been growing steadily as such there is little wiggle room to
continue to increase taxes, especially if Canada wants to remain
competitive in terms of attracting people and FDI.
■ Ontario Auditor-General called out the Ontario Drug Benefit Program -
https://globalnews.ca/news/4979855/ontario-pharmacy-fraud-prescription-for-profit/
■ National Pharmacists has been very outspoken there is a need to handle drugs for 10%
of the population that is underserved in terms of drug coverage
– https://www.pharmacists.ca/advocacy/pharmacare-20/