Canada advisory group calls for new prescription drug agency

TORONTO (Reuters) - A Canadian advisory council studying prescription drug coverage said on Wednesday the federal government should create an arm’s-length national drug agency to manage and oversee a new drug program.

Finance Minister Bill Morneau said last month that the federal budget, set to be released on March 19, would outline ways to provide more access to prescription drugs, confirming a report from Reuters.

“I can tell you that I’m not going to announce the budget here this morning. So, sorry for the lack of details,” Morneau said at a news conference in Toronto. “We know that Canadians expect us to deal with what we see as the unfinished business of the Canadian healthcare system.”

The council’s eight-page interim report contained few new details and was unveiled by two cabinet ministers on the same day that a former adviser to Prime Minister Justin Trudeau was set to testify about the government’s handling of a corruption case, part of an escalating political crisis.

Unlike other industrialized countries with universal healthcare, Canada has no universal coverage for prescription drugs. Most Canadians rely on employer-funded insurance, while some are covered by government programs for the elderly or people with low incomes or very high drug costs.

About 20 percent of Canadians are uninsured or underinsured, according to government surveys.

The council’s report said the patchwork system meant inconsistent access to drugs and that spending on drugs by patients and drug plans is unsustainable, in part because of the high cost of new drugs.

The proposed new national agency should evaluate clinical evidence on the effectiveness of new drugs and value-for-money, and negotiate with manufacturers, according to the report, as well as monitor safety and effectiveness. Those tasks are currently handled by several provincial and federal bodies.

It did not expand on what would make the agency arm’s-length. In general, arm’s length agencies have significant day-to-day independence from ministries led by elected officials, though politicians may choose their leaders or modify their powers.

The agency did not take a position on the central question of whether a new national program should replace or just augment existing drug plans. A final report is scheduled for “the coming months,” the council said.

Reuters reported in January that the federal budget would not propose a plan to cover the full cost of prescription drugs for those who have no insurance through their workplace, citing sources.

A more limited plan would benefit private insurers like Manulife Financial Corp, Sun Life Financial Inc and Great-West LifeCo.

Reporting by Allison Martell; Editing by Chizu Nomiyama and Jeffrey Benkoe