Pension Percolator blog

What’s brewing for BC and the Canadian retirement landscape.

July 31, 2017

Advocating for lower drug prices for all Canadians

The Municipal Pension Board of Trustees (board) recently provided feedback to Health Canada on proposed amendments to the Patented Medicines Regulations. The proposed amendments will give the Patented Medicine Prices Review Board relevant and effective regulatory tools to better protect Canadians from overpriced patented drugs.

The prescription drug landscape has changed significantly over the past few decades and continues to be shaped by two notable trends:

  • The emergence of higher cost specialty drugs, which is putting increasing pressure on drug spending
  • A growing discrepancy between public list prices and lower actual market prices due to the increased use of confidential pricing agreements (e.g. between government drug programs and manufacturers) 

The Municipal Pension Plan MPP) provides access to extended health care (EHC) and dental coverage to almost 90,000 retired plan members and their families. In 2016, the EHC plan paid out $57 million in prescription drug benefits.

Our retired members receive modest pensions; most are not affluent. As at December 31, 2016, the average annual pension in pay was $17,600 (the median was $12,500), yet our members pay the majority of costs associated with their EHC coverage.

Our plan members are responsible retirement savers: by contributing toward their pensions, they rely less on taxpayer-supported federal social programs (such as the guaranteed income supplement) in retirement. But, as responsible as they are, our retired members struggle to pay ever-increasing prescription drug costs.

Canadians are now paying more for prescription drugs than almost every other country in the developed market. Canada has universal health care but not universal drug coverage. BC Pharmacare is doing many things right, but it still only covers about half the prescription drugs on the market. Private payers are paying a significant portion of the cost of prescription drugs.

Rising costs threaten the sustainability of private EHC plans (such as that offered by MPP) and make them less affordable, which may have a negative impact on health outcomes – especially for those with lower incomes. Two key cost pressures are the aging population and increased prevalence of high-cost specialty drugs.

As the population continues to age, private payers will be faced with more tough choices about EHC plan design; they will need to balance cost with access to coverage, quality and appropriateness of benefits. Private payers will be challenged to find innovative ways to maximize benefits within the funding available.

Anything Health Canada can do to keep the cost of prescription drugs affordable for all Canadians will be much appreciated.

The recent consultation with Health Canada gave the board an opportunity to engage in the national public policy discussion on the trend toward higher drug costs – particularly its impact on private payers such as the plan and its members.

The board supported the government’s proposed amendments, which it believes will lower drug prices for all Canadians. More specifically, our submission voiced support for all five amendments, expressed the need for greater collaboration and coordination between players within the Canadian healthcare system, and articulated the importance of affordability and sustainability considerations.

You can read the full submission under Letters and Submissions. 

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The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Municipal Pension Board of Trustees.

Related content

Letters and submissions


Judy Payne, executive director of the Municipal Pension Plan

Judy Payne is the Executive Director
of the Municipal Pension Plan