Morneau Seeks Drug Plan That Won’t ‘Throw Out’ Current System

(Bloomberg) -- Canadian finance minister Bill Morneau is signaling he won't introduce a big-ticket universal plan to cover drug costs, opting instead for a cheaper solution that helps the uninsured.

In his budget on Tuesday, Morneau announced the creation of an Advisory Council on the Implementation of National Pharmacare. On Wednesday, he drew a distinction between a “pharmacare strategy” and a “pharmacare plan,” saying he wants the former and doesn't want to totally upend the current system that includes companies like Manulife Financial Corp. and Great-West Lifeco Inc., which is controlled by Power Corp. of Canada.

A strategy and a plan “are two very different things,” Morneau told a breakfast audience in Ottawa. “We recognize that we need a strategy to deal with the fact that not everyone has access, and we need to do it in a way that's responsible, that deals with the gaps, that doesn't throw out the system that we currently have.”

The net cost for the federal government to pay for pharmaceutical coverage would be C$19.3 billion ($15.1 billion), and doing so would include drugs that currently cost about C$24.6 billion, according to Canada's parliamentary budget officer, an independent watchdog. About C$11.9 billion of that is covered by a mix of governments, while private insurance plans cover C$9 billion and patients paying out-of-pocket account for C$3.6 billion, the PBO estimated.

Morneau's comments suggest it's the patients' share he wants to address. About one million Canadians don't have access to pharmaceuticals, he said. “We recognize that we have a real gap right now,” he said, adding those who can't get the drugs they need “are in a tough situation where they're making choices.”

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Asked by reporters afterward about the comments, he said they were his “perspective” and that the advisory council's work will be led by former Ontario Health Minister Eric Hoskins. “There are parts of the system that are working well, there are parts of the system that really aren't working well. We need to consider both those parts,” he said.

Morneau called the issue complicated and has repeatedly said he needs to be “fiscally responsible” in how he proceeds.

Pharmacare is a core pledge of the left-leaning New Democratic Party, which often jockeys for votes with Trudeau's Liberals in Canada's largely three-party system. The NDP is pushing for full universal pharmacare. “The millions of Canadians who can't afford their prescription drugs don't need another study; they need their leaders to find the courage to act immediately,” NDP finance critic Peter Julian said in a written statement Tuesday.

To contact the reporter on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net.

To contact the editors responsible for this story: Theophilos Argitis at targitis@bloomberg.net, Chris Fournier, Stephen Wicary

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