TheEconomistFebruary 15th 2020 271I
n julyBernie Sanders hopped on a bus in
Detroit with some Americans who have
diabetes. They rode across the Canadian
border to buy insulin at a tenth of the price
they would pay at home. For Mr Sanders,
who won the New Hampshire primary on
February 11th, joining an “insulin caravan”
had obvious appeal. He promises “Medi-
care for all”, suggesting that every Ameri-
can should enjoy the lavish public health
spending that the elderly receive. He
praises Canada for its tough negotiations
with drug firms. “We should be doing what
the Canadians do,” he declared.Canadians have their doubts. Canada’s
pharmaceutical prices are 25% higher than
the average in the oecd, a club of 36 mainly
rich countries. American prices are higher
still, largely because the United States has
powerful drug firms, no price-setting regu-
lator and lots of citizens who receive health
insurance through their employers andhave little idea how much it costs. Unlike
Canada, the United States also lets drug-
makers advertise directly to consumers. As
a share of gdp, Canada’s pharmaceutical
spending is the fifth-highest in the oecd
(see chart on next page).
It is the only country with publicly fi-
nanced universal health care that does not
provide universal coverage for prescrip-
tion drugs. A fifth of Canadians have no
drug insurance. Nearly 1m say they spend
less on food or heating to pay for them.
Hundreds of people die and tens of thou-
sands harm their health because they stop
taking medicines, according to a report in
2018 by a nurses’ union.
Politicians now agree that Canada has a
drug problem. Justin Trudeau, the Liberal
prime minister, who has led a minority
government since a parliamentary election
in October, calls drug prices a “terrible fi-
nancial barrier”. In December the govern-
ment said it would introduce “national
pharmacare”, some sort of federal drug-in-
surance benefit. That leaves big questions
unanswered. Just how Mr Trudeau goes
about fixing drug coverage will be one of
the biggest decisions of his second term.
Currently, most Canadians get drugs
through a patchwork of public and private
insurance schemes. Around 60% are en-
rolled in one of more than 100,000 private
plans, mostly through their employ-
ers. Provincial governments provide insur-
ance to groups such as old or jobless peo-
ple, and in some cases to poor families. The
federal government covers indigenous Ca-
nadians and members of the armed forces.
This fragmented system leaves people out,
including many low-wage and self-em-
ployed workers.
A federal board sets a ceiling on prices
for patented drugs, using international
benchmarks to determine what is exces-
sive. Provincial governments collaborate
with each other and with the federal gov-
ernment to bargain prices down further.
But Canada’s complex public-private sys-
tem weakens its negotiating power. It does
not have the market clout of England’s Na-
tional Health Service, almost the sole buyer
of prescription drugs in its market.
The main question facing Mr Trudeau is
whether to fill in the gaps with a modest
federal scheme, or replace the patchwork
with a universal plan. He is under pressure
to pick the bolder option. Two-thirds of
voters want a universal plan. The left-lean-
ing National Democratic Party (ndp),
whose votes Mr Trudeau will sometimes
need, backs universality. So did a govern-
ment-appointed panel in June. “Every sin-
gle darn study always comes to the same
conclusion,” says Don Davies, the ndp’s
health spokesman.
The panel forecast that a universal plan
would reduce overall spending on pre-Canadian health careJustin Trudeau’s drug problem
TORONTO
Voters want free medicines. How to pay for them?The Americas
28 ElSalvador’s“coup”
30 Bello: “What is Peronism?”Also in this section