Reforming Pharmacare

In his opinion about reforming Pharmacare on October 3, Victor Vrsnik, of the usually sensible Canadian Taxpayers Federation, resurrected the fantasy of a national pharmacare plan. He supposes that the purchasing power of the federal government would somehow lead to lower prices. This is a surprising statement from the CTF, which has done great work exposing how incompetent the government is at purchasing other goods.

Research in both the US and Canada has shown that government purchasing is more likely to increase drug prices, not reduce them. Big government Pharmacare plans demand that manufacturers supply them at the lowest price available. This simply means that the drug makers raise prices to smaller, private buyers who had enjoyed discounts.

BC Pharmacare has already demonstrated an inability to understand patients’ needs by imposing the misguided Reference Drug Prigram in the mid 1990s, whereby Pharmacare restricted payments for newer, more expensive drugs in certain therapeutic classes. The failure of that plan to contain costs is one reason for today’s problems. Why does Mr. Vrsnik thinks that bureaucrats in Ottawa will do a better job managing Pharmacare than those in Victoria?

Appropriate reforms to Pharmacare include giving patients more control over the medicines they use through establishing Medical Savings Accounts, a concept with which Mr. Vrsnik is no doubt familiar.