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Green Shield Canada

Episode 25: Pharmacare revisited...

In episode 25, host David Willows and producer Sarah Murphy chat with two guests (virtually) to talk about pharmacare – Chris Bonnett, Principal Consultant at H3 Consulting (and recent PhD recipient) and regular contributor Stephen Frank, CLHIA President and CEO.
And now for something completely indifferent

And now for something completely indifferent

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Episode 25 Transcript


[0:00:14.9] SM: Hello and welcome to another episode of GSCs Podcast; And Now For Something Completely Indifferent, where well be discussing the hottest topics and trends in Canadian health benefits. I am the producer and editor, Sarah Murphy.

Before we get started with todays episode, we would like to remind our listeners that the views expressed in this podcast are those of the individual speaking and not necessarily the views of GSC. We may talk about possibly controversial subjects and therefore, reserve the right to potentially offend some listeners, but we are apologizing for it upfront.

You can download this podcast from our website at Green\podcast, or subscribe to it from wherever you get your podcasts. We also encourage you to read our publications, the inside story, follow the script, GSC Talk, which you can also download from our website. Please be sure to follow the conversation on Twitter and LinkedIn.

Now lets get started. Todays episode is hosted by David Willows, GSCs Executive Vice President of Digital Innovation and Brand Experience.


[0:01:18.7] SM: Hello David.

[0:01:19.8] DW: Hi, Sarah. Were sitting here in early June. It's a bit of a steamy day. I think it's about 27, but it feels like 31 or 32.

[0:01:29.7] SM: Havent been outside.

[0:01:32.8] DW: Oh, I went outside briefly with the dog. This is officially the first pod we've ever recorded with me in shorts.

[0:01:40.4] SM: Nice.

[0:01:41.3] DW: It will not be visible on teams. It's definitely not – you're not able to figure that out through the audio recording, but now I'm wearing shorts.

[0:01:52.0] SM: It's summer. It's summer and golf season. Yeah.

[0:01:55.0] DW: A lot of rules have gone by the wayside with this COVID-19 working from home thing. Any hint of professionalism class is out the door.

[0:02:04.8] SM: Out.

[0:02:07.0] DW: Yeah. Today we recorded two podcasts; one in the morning, one in the afternoon. The overarching thought behind this was to talk a bit about pharmacare again, which was going to be probably the dominant topic for the year post-election. Then something else happened in our world and now more than one thing is happening in our world in early June, but we thought we would bring it back, because we wanted to talk specifically to one of your friends and my friends from the industry, Chris Bonnett. I think many listeners will know Chris from his articles in industry magazines, his appearances at industry forums.

He is a principal consultant at H3 Consulting. He does a lot of consulting around workplace health and prescription drug policy and he works with both private and public land leaders there. We both know him from Sanofi Canada Healthcare Survey Advisory Board; first me and then you the last couple of years and he's a very learned man. Hes got a master's degree in health science from the U of T.

The prompting of this was that Chris and I spoke at a conference down in Savannah, Georgia earlier this year and he had just gotten the news that his PhD had been approved, if that's the right phrase. He made it and he had got that from the University of Waterloo. The topic was universal drug insurance. Another moniker for that is pharmacare, but we thought he's finished his PhD, we would love to hear Chris's take on what he researched, what he found about the Canadian experience on this topic and then asking a bit about what he thinks going to happen now with our current healthcare crisis and going forward. First off, we're going to listen to Chris.

[0:03:43.7] SM: Do we have to call him Dr. Chris? No?

[0:03:47.0] DW: He didn't say that. He has not.

[0:03:47.9] SM: He didnt say it, did he? No?

[0:03:48.7] DW: He hasn't played that card yet. I think it's coming.

[0:03:51.9] SM: Yeah, I think so too.

[0:03:52.5] DW: Then part two, we bring in an old friend, Stephen Frank. I think it's his third or fourth time on the pod. I'm going to ask him first just about his take on what's happening on the pharmacare front during this period and what's happened this year and then a bit about how that the industry has weathered COVID and what our reaction has been and our feeling that we've escaped reputationally unscathed at this point, which is a good thing, because I think we did some things as a company and as an industry, so that's a good thing. If you're ready, we will play for our audience first, part one with Chris and then attached to that will be Stephen Frank.

[0:04:30.5] SM: Excellent.


[0:04:35.3] DW: Chris, welcome to the podcast for the first time.

[0:04:38.6] CB: Thanks very much for having me. This is an interesting idea. You guys have covered some interesting topics, so I hope I can keep up to that standard for you today.

[0:04:45.8] DW: No, there's no doubt about that. We've been talking about having you on for a long time. Both Sarah and I have worked with you in different facets in our industry. Most recently, I think you and Sarah got to know each other in the Sanofi Healthcare Survey Advisory Board. When Sarah and I talked about having you on, she was quite insistent that you had to finish your PhD before we would let you on the podcast. I argued that I thought you would be a great guest, but she was pretty adamant about that. As people just heard your bio, that is your most recent accomplishment, so a great congratulations.

[0:05:19.6] CB: Well, thank you. Im glad I finally finished it if that allowed me to get on the podcast. Otherwise, we could have been talking a few years ago. Its quite a long haul.

[0:05:28.4] DW: Oh, we've missed you, but Sarah runs a tight ship. The topic of your PhD, youve used the phrase universal drug insurance. When we were talking to you about this podcast, I kept referring to pharmacare. Before we start talking, tell me why you didn't actually use the word pharmacare associated with your PhD and what's the language around this that makes you comfortable.

[0:05:52.6] CB: That was one of the early surprises in all this that everybody walked into pharmacare with a preconceived idea of what it was. For a lot of people, it was a public single-payer plan, it was putting drug insurance under the Canada Health Act, it was as simple as almost flicking a switch and dissolving private insurance, figuring out how the provinces would administer it. Well then, the federal government got involved with it and then they were going to fund it, so pharmacare took a different definition. Is it really national? Is it pan-Canadian? What's the role of private insurance? Turns out, there's no standard definition for pharmacare. It has a bit of an ideological loading as you can imagine, because we've been talking about it for a while.

The other thing that comes out of this is that the problems that pharmacare is supposed to solve are not really well-matched to the solution that was proposed in my opinion. Anyway, the solutions are poorly defined. Even the word universal, it turns out, comes with a loathing. A lot of people say universal pharmacare, or universal drug insurance. For them, that always means public. Yet when I say universal, I say adequate universal. I take the common language meaning of coverage for everyone and that that coverage ought to be adequate.

We've got different meanings, we've got different formularies, we've got different standards, we've got different plan designs. Pharmacare is all over the map, so I thought I'd condense it into adequate universal drug insurance and run with that.

[0:07:21.5] DW: Okay, understood. To take one step back, why did you choose this as the topic that you wanted to spend years of your life diving into?

[0:07:32.4] CB: I couldn't think of anything else. Actually, it was one of those things, David as you know, we've looked at pharmacare many, many times over the years. A lot of what I was reading was about getting rid of private insurance in this effort to make pharmacare part of the Canada Health Act. Well, having spent years in insurance, almost 20 years in the industry and then another almost 20 years around the industry, it seemed to me that private insurance was getting shortchanged.

It mattered to me that private insurance have an important role. Now that's not to say the same role, because as I started to look at other countries, private insurance can play an important role, but often in a different way. Often, it's regulated. In fact by definition, it almost has to be regulated, because you want private insurance to play a role that also serves the public interest, not just the interests of shareholders, or policyholders in the case of a mutual company.

For me, pharmacare was just rich with potential. It was a part of a healthcare system that other countries had solved many years ago and Canada is one of the very few countries that hasn't. In fact, many of the studies that I've seen start with a comment that Canada is the only country with a universal system in the Organization for Economic Cooperation and Development that doesn't include drugs. Well turns out, we also don't include long-term care and we don't include community care in our health insurance package, so we've got a few things to fix. Pharmacare was something I was always interested in and it seemed like talking about a private insurance role was something really nobody else had done.

[0:09:11.4] DW: Okay, terrific. I think when our industry looks at this topic, there's been the standard position that obviously this concept of universal pharmacare could potentially harm us, if there is a single public payer being proposed and certainly, there are our loud voices that talk to that end. Naturally, we have advocated, lobbied for a system, which would include both public and private. Beyond that naked self-interest of that work, potentially go away from our organizations, why do you think this is an important topic more broadly for our industry, rather than just the pure bottomline look?

[0:09:54.2] CB: The question in my mind having been in and around insurance for all these years is I mean, clearly to your point, David, there's an important financial impact of having private insurance for private insurance companies and for carriers like Green Shield. You've done it for years, for decades. In fact, in my reading of the hall report, which was published in 1964, Green Shield Canada, Green Shield prepaid services, I think it was called back then, was one of the first along with the Blue Cross organizations that offered any kind of drug insurance.

You've been there since the very beginning practically. It was interesting that we had to get fast forward from the 50s and now to 2020 and still haven't really made a lot of progress. Insurers can play an important role. To be honest with you, the way that private insurance is handled in other countries and in fact, in the province of Quebec, as you know as the private insurance is legislated and regulated.

Now it turns out that regulation isn't a one-size-fits-all concept. You can have very light regulation as exists in Quebec, where basically the industry, the carriers that operate in the province provide a report to the provincial minister of health every year, details how they've achieved the requirements of the regulations. Now in other countries, I studied Germany and the Netherlands in some detail, that regulation is somewhat more onerous, it comes with requirements for risk sharing, which we may talk about a little bit later. It puts a very clear set of requirements on private insurers that they meet a public interest, that they meet the needs of the public, not just of shareholders.

It turns out that it's not that hard to do both. Although most companies don't want to talk about regulation, there's a way to do it that cannot harm the industry, but serve the public well. I think that's one of the evolutions of insurance that I think makes sense at this point. Hopefully, there's a way to to bring private insurance much more into the discussion. It's not part of the literature. It's not part of most think tanks that have put out papers on pharmacare and drug policy. They really don't understand it very well.

Again, in my history and the insurance industry, the industry has done really well with quiet chats in the background, don't necessarily take the podium or the stand to make broad public sweeping statements, but they managed to get important things done quietly. This is one of those things where the industry has taken a bigger position, a higher profile position. I think actually, they've done it fairly responsibly. I commend you and your colleagues for that. There is a rule and it isn't a black-and-white situation. This is a whole spectrum about where private insurance would fit in, how it would fit in, how it would fit with provincial plans, public plans, federal and provincial regulation. It's just a matter of getting into those details, which again, nobody's really studied so far.

[0:12:54.6] DW: Okay. Fair enough. As you started your research off, I'm sure you came in with some preconceived notions. You're probably a pseudo-expert on this topic and became a seminal expert on this topic. What surprised you as you did your research for your PhD?

[0:13:12.6] CB: Well, I would say that one of the biggest surprise – Now I should back up a little bit. I did three components to my thesis. The first was a very in-depth literature search of private insurance and social insurance and public drug insurance and predominantly in Canada, but also in European systems. Because I needed that background, that foundation or what's been done, where are we at.

The second part of my research was a series of interviews, turned out with 26 experts from across the country in different sectors, including private insurance, provincial drug plan managers, labor, academia, health professionals, people in many provinces, not each, but many provinces right across the country. A very broad-based perspective of experts who not only knew the theory. In fact, most of them were more practical experts. They kneow how plans ran. They knew how they operated. They knew how they administered. They knew the public challenges and the administrative challenges of operating these things.

The final part was this comparative review of drug and health insurance systems in Germany, the Netherlands and Quebec. To get back to the surprise question, the first surprise was in those interviews, they spoke almost universally and this was volunteered about the need for federal leadership. That probably isn't a surprise, because that's been called for. If we have a confederation of provinces, they've all done different things to serve more local needs, but we find as time goes on that we need national standards. At least in my opinion, because as a Canadian, you might expect that you should have adequate access to drug insurance, not depending on where you live or depending on where you work.

All of those folk of the need of federal leadership. Now to get down a level, that meant funding for sure, because it turns out that the federal government is the one level of government most capable has the fiscal capacity to fund new programs, but also as a facilitator, somebody who could bring stakeholders together and find the common ground, find the points of dissension, find the gaps and help figure out how to resolve that.

The other key role was a secretariat role, where the federal government would have a back office. You and I had been involved in all kinds of volunteer stuff. We have great discussions at a table. We leave the meeting. Then we need somebody to get things done for us, because sometimes were just conflicted, we've got too much going on.

The secretariat would do the work, would undertake and commission the research. Turns out, even the Advisory Council said, We really don't have good information in drug insurance. It's hard for us to make recommendations when we don't have the data.” That secretariat would help it.

The second thing I was surprised was when the advisory council finally made the recommendations, their first step was for an essential medicines list. Now that's a very small list of the one that's been proposed for Canada, has about a 125 or a 130 medicines on it. Many of them are generic. Some of them are over-the-counter. In fact, they're almost all generic. Some of them are over-the-counter. Some of them include vitamins and minerals. Lots of things actually that neither public nor provincial, or private plans paid for at this point.

That surprised me, because it seemed to me that that would certainly help a sector of the country that really can't get any access to drugs. It seems like a missed opportunity for me that they didn't recommend protection from catastrophic drug costs. That's a standard that varies in every province, almost with every plan. In the private insurance world, we have some plans that have an out-of-pocket limit. Eight out of 10 provinces have a catastrophic plan in place, but some don't.

If you're relatively high-income earner in Newfoundland and Labrador, if your family makes over $150,000 a year, which is significant, but you're not filthy rich, you don't have any catastrophic drug coverage in that province. If you live in Alberta and New Brunswick, you may not have any private or public drug insurance, but you can enroll for public plans and you will get that coverage. I think generally within 90 days, I think it might even be 30 days. The coverage is accessible for you.

All those different standards of in the provincial realm, catastrophic coverage can start at about 3.50% of family income in Saskatchewan, about 4% Ontario. It can run a zero for high-income earners in Newfoundland and Labrador. It can trigger at 35% of your family income in Nova Scotia when your income is over a $100,000. Imagine that. I mean, a $100,000 family income, two earners, again you're not rich and you've got to spend $35,000 of your own money before there's any provincial assistance.

Why wouldn't we put some national standards in place to provide some very real protection against not only expensive drugs, specialty drugs, gene therapy, cell therapies, but also as you and as the Sanofi survey have pointed out, people that have high-cost drug regiments. In fact, I think your research has suggested that the high-cost claimants, most of that cost was from traditional medicines. They may have had a specialty drug, but they had very complex health conditions.

Now Sanofi survey, as to the fact that if you also have people with low incomes, again, those plans don't help you very much. People are not satisfied with public or private plans if they're in very poor health and if they have relatively low incomes, because those plans don't protect them. That was a surprise.

I'll tell you, because I interviewed such a wide range of people, virtually everybody favored a role for private insurance. Now that role varied a little bit. Certainly when I talked to a couple of politicians and some labor people, they weren't as keen about a private insurance. They wanted a more confined, constrained private insurance role. Even the provincial drug plan managers that I spoke to said that private insurance plays an important role. It spreads out the risk. It means that provincial budgets don't have to cover all of this cost all of the time for everyone and they appreciated this nice complementary role that provincial and private plans played in the world.

That was a surprise, because I thought there'd be a lot more having read the literature, a lot more antagonism against the private insurance industry. Turns out after 50 or so years of offering private drug plans, a lot of people see value for that, a lot of people see the innovation that private insurers have brought to the field, particularly in consumer technology and health promotion and chronic disease management, stuff that provincial plans, provincial governments don't offer their citizens.

There are a few surprises along the way. Mostly pleasant, but again, this idea that it all starts with federal leadership and maybe final point on this is the fact that neither the House of Commons Standing Committee on health that provided a report in 2018, I believe, or the advisory council on the implementation of national pharmacare that provided its report last year, the government didn't do anything with that. They spent four years investing in rethinking pharmacare and talking about implementation.

The surprise was that as we got closer and closer to the election, less and less was said. We never had the Prime Minister stand up and say, This is a great idea. We've invested in this. We now know how to proceed. We'll make commitments to this.” Instead, only gotten last year's budget was we'd have some drug agency, we'd work a little bit on drugs for rare disorders, things that are really around the fringe. Surprises, but not any of them without hope that there are good solutions still possible.

[0:21:06.7] DW: What is your theory at this point that we've gone these 50 years, we've had this series of conversations at the governmental side, on the business side, public health? As you said, we had some fresh documents even in the last two or three years leading up to an election, why is nothing happening, or very little happening?

[0:21:31.5] CB: Well, in my reach, I think – looking at many documents. There was over 230 or 40 references in my list. There are at least a dozen different reasons why private insurer, or why national pharmacare, or adequate universal coverage hasn't happened. A lot of it is politics. Katie Boothe from McMaster University wrote an excellent volume book and a number of articles, doing an historical review of how governments in Canada, also Australia and the UK, look at drug insurance.

She went back into archival records for decades. We first started to talk about this before the end of the Second World War. There was a public proposal that came up from the federal government shortly after the war ended. That was about the time that Britain was doing its national health service. We were right in-line with that. There was the dream that this would be one of the rewards for service for all of the pain and national energy that had gone on over the course of the war. Now we would get the insurance that we needed to protect our health. Then it came and went.

Yet we've had what? Eight different reports in just in my lifetime, starting with the hall report in 1964. A lot of it turns out that the federal government every time this comes up, says it's too expensive and costs are escalating too quickly. That came up in the hall report, which was issued in 64. That was done at a point in time where the per capita drug spending in Canada was about $9. Now if we fast-forward for inflation, that's still only about $80 in today's currency and we know that we're spending $900 to a $1,000 per capita in real money today.

In some ways, the federal concern about cost and cost escalation has happened, but we also have a whole different suite of drugs now and far more effective drugs and far more conditions than we ever get back in the 50s and 60s. A lot of it is political concern about cost. During COVID, we haven't seen a lot of political concern about investing in all sectors of the economy to try to keep our world going as we know it. It's an interesting set of contrasts.

I think there's been this fear that in some of my participants, they said for instance, well, we're not sure the federal government can really operate a program for 38 million people, which was the premise behind the house report and the advisory council report. It's just too much for one organization. They don't have experience with this. Well, the provinces could step in, but then we got all of these different provincial standards. How do we reconcile that?

Rather than having forcing the provinces to look at this from a paying Canadian national perspective, it's easier just to say status quo works. The problem with that is that we have – well, we have those high-income earners in Newfoundland and Labrador that don't have any protection. Maybe they can find it somewhere or other, or maybe they need assumptions they all have private insurance, but there's by my calculation between 1 and three-quarter and about 2 million Canadians that don't have enough drug insurance.

We have at a 38 million, we have 5% to 6% of our population not directly measured, indirectly measured by related to cost related non-adherence to their drug therapy. 5% to 6% of Canadians that don't have enough coverage and then could run into trouble affording the drugs that they need. We don't necessarily need to take everything off the table and start new again, we need to focus on the points of need. I think that's how I would recommend that national pharmacare, this big universal process and concept get narrowed down to deal now with more specific problems.

Let's deal with national standards, not only for formulary, which everybody seems to agree on, but also for that out-of-pocket protection. Let's get a standard approach that works for the provinces, that works for private insurers and ensure that all Canadians have adequate protection. I think the other things, the bigger picture things we can do is certainly look at a strategy for this.

We'll spend 34 or 35 billion dollars on drugs and it's all in little pockets and buckets all across the country with different jurisdictions, different plans in the private world and there's no understanding of how we ought to spend that money to get the greatest value for it. There's a wealth of possibilities in terms of what we can do to make the world better without waiting for this massive program.

The whole point of using not only my research, but also my number of decades in and around private insurance was to try to make this topic as practical, as feasible as operationally possible as it could be, because I'm tired of big ideas and big discussions and royal commissions every few years that don't actually help us to progress much.

[0:26:37.4] DW: Okay. I can understand that. I know you looked internationally. Were there any countries that you stumbled upon where you saw maybe a straight line to Canada and said, Hey, theyre like us and they did this and maybe this makes some sense. We could learn something from them”?

[0:26:55.6] CB: Yeah. Every country is different. Every country is wrestling with the same challenges without question. Everybody is wrestling with issues of affordability and sustainability, not only in drug insurance, but all of their health care systems. That's the common denominator here. The thing is that there are two fundamental models for drug and health insurance. One is a single payer publicly funded through general taxation model that would be the case generally in Canada, certainly in the UK and in certain other countries. There's this other model called social insurance, where we have this blending of private and public responsibility for the health insurance system.

In Germany, they have something called the federal joint committee. It's been around since the early part of the 2000 turn of the century. Interesting, because rather than keep all of the advice contained within government, the federal joint committee is a multi-stakeholder group that includes the jurisdictions, representatives of the jurisdictions, not all of them in Germany, but also private insurers and physicians and hospitals and has consumer representation around that table as well. That body of 13 also has an independent chair. It's not a political body, but it advises the Federal Minister of Health.

Rather than doing that for the whole health system, what if Canada looked at that idea as a way to govern its drug insurance, at least as a start? Rather than keep it all within government that struggles to find consensus and get action, because often a political dimension that has to be considered, what if that table had other people around it? What if that table could consider right up front the interests of patients, the interests of private insurers employers, of the jurisdictions, of health professionals? Bring that expertise to bear on how do we get adequate universal drug insurance and open it up.

In Germany, those federal drug committee meetings are even televised. Now I don't think that's going to be nearly as riveting as this webcast, but [inaudible 0:28:56.9], there's a commitment to transparency and accountability. I that idea as a way to improve the governance of our model, have that broad base of input to deal with very complex problems and problems that are only going to get more complicated with time and provide them good, consolidated and consensual advice to the ministers that could report for instance, to the council's of the federation, which is composed of health ministers from across, or premiers of all of the provinces.

[0:29:25.8] DW: Let me ask you on that driven idea, because they've got a bit of a reputation these days for being smart around healthcare things, right? They're looking better than some of us the last few months. You talk to a lot of those stakeholder groups that the Germans have brought together in that body. Do you think Canada is different in that we would have trouble bringing those same people together here that they did there? Do we have some historical, political baggage that maybe that's harder for us than them? Or is it just we've never thought of it and we never tried?

[0:30:00.1] CB: I would suggest that we've got about as much political baggage as they would have had. When you look at some of the long-term developments in Germany and also the Netherlands, you find that politics runs through all of this. You find that every system has to adapt to that political reality, take the best research, the best literature, look at outside their borders, but also consider their history, their institutions, the way things have been done, the importance to their populations, of changes, some of which are going to be good, some of which youre going to find concerted resistance to.

Germany managed to do this. It's not like it's been there for decades. It only happened I think in about 2003. They managed to overcome that political inertia. In Canada, I think it's really that the world to the provinces and to all of the jurisdictions is complicated enough. For them, why would we want to bring anybody else to the table? For one thing, then we've got to share information. For one thing, we don't get necessarily credit for good things that happen, because we have to share that credit with somebody else. Now sometimes that motivates politicians and actually sometimes it doesn't. Sometimes they're really trying to do the right thing and I think that that's the appeal to this is to say well, guess what? We do understand. Drug insurance isn't just antibiotics and some immunizations anymore. Its far more complicated. There's far more money at stake. We need that that expertise.

Germany had all of those problems. I think we've got the same ones trying to find a role for others. That requires governments, federal and provincial territorial to be willing to share that responsibility with others. I think we would get a better system because of it. I think actually, that is very much in the public interest, because we've seen as I say yet again with the failure of the house committee and the advisory council, we've really not seen much happen here. I think that public governance would also keep this issue in the public eye and long enough to achieve the goals that it set out for itself.

[0:31:58.7] DW: Let me finish with probably a difficult question, but here we are sitting, we're taping this in early June. We all know what situation we're in right now in Canada and the world. Are you more optimistic, or less optimistic that we will make progress even on the specific items you mentioned before, so the concept of national formularies addressing copayments, rare diseases? Over the next one, two, three years, will this health crisis help accelerate this conversation, or is the fiscal situation going to be the ready excuse again to move on and not look at it?

[0:32:40.2] CB: Well, you're asking me to look into a crystal ball that it's a repair shop right now, so I'm going to just try to wing this. Clearly, COVID-19 has pushed everything else off the table. We've got projections of massive debts and deficits from the Parliamentary Budget Officer. As I said, that's been enough to stop national pharmacare in the past, cold without this. Remember, we started to think about this just after the second world war. Another period where Canada had incurred massive debts and deficits, because of the war. We got a different war that we're dealing with now this pandemic.

I think that the first instance out of this is that we look at our long-term care. I think we look at the data that is informing our public health, because we found importantly shortfalls in both. Quite frankly, we're big enough. We ought to be able to do more than one thing at once, but if we had to do one thing, I'd start at the long-term care and I'd look at public health, because all of the experts tell us, we're going to get another pandemic, it's just a matter of time.

You know what? It also could cause us to look at the world differently. It could cause people to say, Well, I guess that whole big comprehensive complex idea of national pharmacare, that doesn't make sense anymore.” We have important needs and gaps in coverage and services and they're only going to get worse in time.

I hope that there would be some – I'd like to trade off all the goodwill that came out of those expert interviews and say that we could bring people together to address national standards, for instance for a formulary, for out-of-pocket protection, for a strategy, for drugs, for rare diseases, for something that would handle those emerging cell and gene therapies that are hundreds of thousands of dollars typically and well beyond the means of even provinces to afford, let alone the private insurance industry and employers.

Those things are already big problems. They aren't going to get better, but they're nicely defined and bounded and they aren't impossible for us to solve. I would like to think then that COVID allows us to rethink massive plans and instead, target our efforts to the things where we know we have important problems and we can deal with them on a relatively quick basis. These problems aren't going to go away. We're going to need to look at all these things in a more consolidated way.

I'm hopeful I guess that out of COVID, well see not pharmacare as a distinct issue or a strategy for drugs, for rare diseases as a distinct issue, or reforming the patent medicine prices review board as a distinct issue, that we would start to look at this as a strategy, put these things together, organize them, figure out how we process them, how to future-proof our system. We better deal with it now, because again, it isn't going to get easier as we go along.

[0:35:31.6] DW: Well, that was a big thoughtful answer to a bit of an unfair question that I threw at you at the end, but thank you for that. Thank you for joining us today, finally. Thank you for wearing a jacket and classing us up a bit as I degenerated my day-to-day appearance down to a now a golf shirt COVID beard. As we expected, you have elevated us to new heights and I hope to do this again.

[0:35:56.5] CB: Well David, I want to thank you for wearing a shirt today. I appreciate that and obviously, the opportunity to speak about this. This is something near and dear to my heart and it is something Ive been working on. Again, the risk is that this becomes too out there to be meaningful, practical, feasible. There are important issues and I appreciate a chance to say about how we could redefine pharmacare to solve important problems and engage the private insurance industry and that you guys have an important leading role to play. You can facilitate. You can engage governments. You have that power and I hope the industry chooses to exercise it in this particular area.

[0:36:35.8] DW: Okay. Well, we'll keep that voice prominent. Thank you again. Be well. Take care.

[0:36:41.7] CB: My pleasure. Thanks so much. Bye-bye.

[0:36:44.0] DW: Bye.


[0:36:48.7] DW: Stephen Frank. Welcome back to our podcast.

[0:36:53.6] SF: Well, it's a pleasure to be here virtually and it's good to see you, I guess, virtually as well. I haven't seen you since we lasted the podcast, probably at the end of the year. An interesting time since then for sure.

[0:37:04.6] DW: Stephen Frank as our listeners will know, he's our most frequent contributor and he's the president and CEO of the Canadian Life and Health Insurance Association. Just as we pressed play on this, there was noise coming from Stephens house and he got up and left the early moments of the podcast. What did you have to tell your children, Stephen?

[0:37:25.1] SF: I told them daddy's a very important man and they need to leave me quietly for at least half an hour. They looked at me with total disdain and skulked off. I also hope this does not extend beyond the room for now.

[0:37:37.4] DW: Okay. Stephen has that warning in his house. I've asked my dog not to bark for the next 20 or 25 minutes. He's 10-years-old, so he should be mature enough to understand this. Sarah, you have a seven-year-old who you have issued a warning to?

[0:37:51.7] SM: Yup. She's got the warning. Well, we'll see if she behaves.

[0:37:55.2] DW: She's only allowed to come in for an emergency, right? How did you define emergency?

[0:37:59.3] SM: Im like, if you're bleeding or if the house is on fire. But anything else like, I need water, or I have to go to the bathroom doesn't count.”

[0:38:05.3] DW: An intruder is fine.

[0:38:06.6] SM: Fine.

[0:38:07.7] DW: Lock him down.

[0:38:09.7] SM: Shell scare them.

[0:38:11.1] DW: Okay. Okay, good. It is a different world we're in, Stephen. When we started this year, I think we thought national pharmacare was going to take up a lot of our time talking about it, debating about it, your organization positioning our industry properly. I understand the years turned out a little bit differently in terms of the issues on your plate and we all know why, but we recorded a podcast this morning with somebody you know well, Chris Bonnett, who's done a lot of work on the issue. I just wanted to ask you today early June on the ground, where is pharmacare do you think in discussions today and what do you think could come in the future, either as we leave COVID, or fully post-COVID?

[0:38:54.7] SF: Well, I'll break that into maybe two periods. I'll obviously caveat it with this is gazing into a very opaque crystal ball.

[0:39:03.1] DW: We accept that.

[0:39:04.5] SF: Yeah, there's the immediate term. Let's think of this in the next say, two to three months. Then there's the medium term, let's say out six months to a year. It's pretty clear to us when we are meeting with government that they are completely focused right now on crisis management. Getting through the COVID from health crisis perspectives, top of mind. Then those parts of the economy that are actually broken are getting a lot of attention right now. You can think of industries like the airlines and hospitality and oil and gas, tons of energy going into that. Then areas that are becoming a political and healthwide area challenge are a big problem, like long-term care homes. Those were not on the radar six months ago and now they're top of mind and for very good reasons.

Drug coverage and the good news for us in Canada is that the system is held up really well so far. The employers are doing what they can to keep benefits in place. Our industry has put a lot of supports back in the industry to keep coverage in place. We're paying our claims as we were before in real-time and on time. We're managing through the changes at pharmacy around dispensing limits and fees.

In the scheme of things, were not a problem right now. We're not getting on appropriately so they're focusing on where there are gaps. In the next couple months, I don't think we're going to hear much and I dont think theres a lot of work happening, despite the ongoing efforts by some, say in labor movement and some others to make it an issue, you may have seen some opeds in the paper recently and other things. They're trying to, but I don't think there's the appetite there.

The reason for that is we're just simply not in crisis in our sector. The government has other issues to deal with. I think that's the very short-term answer. Over the medium term, look a couple things to think about, the same issues that we had at the start of the year are still there. There are gaps in the system. We can and need to do better. We can do better around costs. We can do better around access. Those long-term issues are not going away. At some point, everyone's going to turn their mind back to those again.

Then of course, how comfortable we should be in saying that the system is held up well will depend in a lot of respects, on how the economy recovers. If we're still 30% down and in a deep depression in 12 months then all bets are off. I mean, it's going to be extremely difficult for anyone to be forecasting what that environment looks like. That doesn't seem to be where we're headed. We all expect it will be a measured recovery and so forth.

The worst now and we can build from here, then the hope is we won't see any drastic change in our sector, and so we will never become part of the problem. My hope and my current expectation is that we're going to work our way through COVID and then at some point, we revert back to the normal course, very helpful discussion around how do we make this system better and what does that look like and that would go back to the kinds of issues we talked about by Christmas.

[0:42:06.2] DW: Yeah. Talking to Chris this morning, I think one of the big pieces of his research was, I think there's been media consensus for at least a few years now and some agreement around tactical pieces, like a minimum formulary, combined action on rare diseases. Why do you think we haven't gone further faster on those, where there seems to be broad agreement, even in the old good – what I'll call the good times?

[0:42:32.7] SF: I actually would have expected that we'd be further along on those had we not had COVID, because that was where the government was spending its efforts on particularly on the rare diseases piece. If you think back, it feels like a lifetime ago. If you think back to the budget of 2019, they had a couple of interesting announcements in there. They announced the creation of a Canadian drug agency, they put 500 million dollars aside for rare disease funding and they talked about this minimal formulary. Those were all commitments that have been budgeted for. That 500 million is there. At some point, we're going to have to figure out how that's going to be best spent in the area of orphan drugs and rare disease drugs.

Unfortunately, we lost a lot of momentum in the new year because of COVID, but hopefully that picks up again. That's the right way to think about reform. You want to be careful that you don't throw the baby out with the bathwater. For the vast majority of people, the system continues to work very well and it's worked very well through the crisis. I'd build from there.

I guess, the other interesting unknown will be the degree to which the fiscal situation in Canada is going to direct some of this discussion. What I mean by that is we'll probably have a deficit somewhere in the 300 billion dollar range this year. Any problem that's coming to the government's attention now they're addressing with a new program. There's almost no limit on spending at the moment. One thought is that well, in that context, what's another 25 billion dollars? Maybe we just do pharmacare. There are people that would argue that there's a risk there that we've become immune to tens of billions of dollars for programs and that pharmacare could be slipped in.

Then there's another strain of thought that says well, certainly are spending a lot right now, but people are increasingly aware that that can't continue. Then coming out of that, theyre going to have to be even more careful and targeted on where they're spending government dollars. The approach of building from what we have and being more target will even resonate even more. Thats maybe potentially another unknown and different people will certainly come out of this crisis with different perspectives on that.

My sense in talking with officials, certainly in the finance department and others around Ottawa is they well understand that coming out of this with hundreds of billions of dollars in deficit and close to a trillion dollars in debt, you really are going to have to start to focus really carefully in making choices and priorities on where you're going to focus your energy in. That's not an invitation then to spend another 100 billion dollars on new programs.

I tend to believe personally that we will lean towards we need to be even more careful and targeted out of this to work our way out of this hole. That is again another risk and that can be a bit of a political discussion as much as anything.

[0:45:24.2] DW: Thank you for that. You've touched on it a couple of times, but this feeling that our industry as a whole has kept its nose clean and have our house in order through this crisis. Certainly, for Sarah and I that work in a marketing and communications team, we haven't felt like we've been on the run, or ducking and weaving with the press through this, which is we're quite thankful for.

When this started, what were your concerns about maybe where we could have some stumbles and bumbles, or be taken to task and how do you feel how we've come through that? Because there's certainly some industries which have faced more scrutiny, even financial services sector for some of the gestures they've done and we haven't seen that so much in our world.

[0:46:05.8] SF: Well I got to say, when I think back to the first two weeks of this, like let's say from March 15th for the next two weeks, it was twice a day, 10, 12-hour days of just constant pressure and change on the industry. As borders were closed, as people were to stay home, as all kinds of new government health measures were put in place and had enormous impacts on the business. One of things I was really, really gratified is that the industry coalesced very quickly, like within a day or two around all these key issues and did the right thing, whether it was ensuring that we continue to provide travel protection for essential workers crossing the border into Canada and the US, whether it was related to premium relief and premium deferrals for plan sponsors to help them bridge through this difficult period, moving to self-assessment versus requiring doctors notes, when people are having trouble getting in the physician.

Certainly when you look at the high-cost drugs and be on a pre-authorization schedule, allowing for workaround so that you're not needing people to go into the clinic to get assessed like they normally would. Huge ramp up in provisional virtual care. I mean, I could just go on. There's probably a dozen issues where as an industry, we said we have a part in this and we're going to do the right thing and we're going to provide direct support financially into the market and we're going to provide indirect support to make the system more resilient in a social distancing world.

You can only do that if an industry has really done its homework, if it's well-run, well-capitalized and has done its planning. I think this wasn't – it's not luck that our industry was able to do that. Its not luck that Green Shield has been able to do that. Its because you guys have an incredibly well-run business and you knew what you're getting into and you're well capitalized and we're able to turn that around within weeks.

Our industry has come out of this relatively well. It's been really stressful as it's been for all of us. I think that we've felt really good about the role we've played helping Canadians stay healthy, helping the economy work its way through this and we'll have an important role to play getting the economy back up and running.

The stories, it's been a very good one. There's been very relatively little noise around our industry, because things have continued to run well and we've continued to meet our commitments to our clients. Our industries, I'm not getting a lot of calls from media either on issues and that's just fine. We want to be doing our jobs and doing it well in this period.

[0:48:41.1] DW: Okay, good. As a last question to you. You had some plans that you laid out for this year. You shared them with us in that December-January podcast that we do annually. Tell us what maybe has gone by the wayside, just naturally through this and what are the things that you're working on now, some of which you plan to when you're happy that you're still doing and maybe some which are new and is that our current reality?

[0:49:04.3] SF: Well, it's interesting. One of the I think potential silver linings in this crisis is the opportunity to accelerate some of the changes we were looking to do already around the way we sell and support our customers. The requirement for wet signatures, the requirement to have a visual check on documents that require AML requirements, all those things that used to go into a sales process, we've been able to get temporary relief from some of those and to be able to do them electronically in a virtual context.

A lot of those, if we could keep those going for it, it could be very helpful to the business to take us to that next level. Some of those we've been talking about for five or 10 years and they're here now. One of the things that we've been talking about within our team and with some of our committees is okay, what are the regulatory flexibilities that we've been given over the last two months that we really want to try and keep? Do we have some evidence that they worked okay, like we haven't introduced any new risk into the system by doing things differently?

Let's start a productive discussion with the CCIR and others around what are the good things that we can keep out of this and let's not default back to the old ways, just because that's where we used to be. I think we were actually at a point now where it feels like we're starting to be able to look forward a little bit and say, what are the things we can we can keep going forward? That had been on our radar. It would have been on our project plan, but obviously that's leapfrog some of the others and that may be actually a really good outcome from all this and could be really positive saying. We're starting to turn our minds to some of that.

On the longer term issue of pharmacare reform, some of the things we talked about genetic testing, we talked about privacy and data and technology risks. Those are going to come back and do course. I don't have any doubt on that. I would expect within by the fall, some of those issues will be back on our to-do and we'll be starting to work more actively on them. Never let a good crisis go to waste, so let's see what positive we can pull out of this as well, well when we move forward.

[0:51:13.8] DW: Okay, terrific. I want to thank you for checking in with us. Something that Stephen said before we went live on air here is that he's been teaching some grade 6 math at his kitchen table and he was quite proud of the fact that he can do grade 6 math. I would suggest that's a low bar for an economist by trade and the person that's the head of our industry lobby. We can probably all arrest assured that at least, our leader has grade 6 math skills going forward.

[0:51:38.4] SF: Well, there you go. Well, I hadn't converted a fraction into a decimal and back to a fraction again in quite a while. I had to remind myself how to do that, but I figured it out, so we're all good.

[0:51:47.9] DW: Yeah. To be clear, I'm not saying I could do that. Just teasing you. Thanks again. It's great seeing you. Hopefully –

[0:51:54.2] SF: Oh, my pleasure.

[0:51:55.0] DW: - that's how we see you when were back in that little room at North York.

[0:51:57.7] SF: Absolutely. Stay safe everyone and my pleasure.

[0:52:00.1] DW: Okay. You too.

[0:52:01.0] SF: Talk to you soon.

[0:52:02.1] SM: Thanks.

[0:52:03.0] DW: Okay. Bye.


[0:52:07.9] SM: Thank you to our listeners for tuning into another episode of And Now For Something Completely Indifferent, a Canadian health benefits industry podcast. To be sure to get future episodes, please subscribe to this podcast wherever you get your podcasts, or visit our website at Green\podcast to download.

As a reminder, we talk about these issues consistently in our publications, which are available on our website, as well as on social media, so be sure to follow the conversation. Thanks for listening and we'll talk again soon.