Pharmacare on the ropes

Federal election time in 2025 offered up some hope that the Liberal Party policy platform might yield results that resembled its promises. Among the pleasing vistas was pharmacare. With support from the New Democratic Party, at least, the minority government could do it.

Well, it was a damp squib of a program.

Though optimists thought prescription drug coverage for diabetes and contraception could expand to a full pharmaceuticals program, dark clouds immediately gathered. Heavy media bombardment generated alarm about the cost of the program. At first glance, it got through to the Liberal government. But another explanation is available to us. Prime Minister Mark Carney is a long-term doubter about state intervention. True to his early goals, laid out in Liberal Party policy documents, Carney planned on “spending less on government.” That is background to themes contributing to current mainstream economics and Canada’s place in it.

In the course of development, from the 1960s on, state intervention acted to stop surges from boom to bust and back again. The private sector—involved in health care, education, insurance, and so on—saw threats to their businesses, so they fought against it. Promotion of other paths without government aimed to gain the same or similar results. Some political parties in the developed economies engaged fully with those trends. Collected together, they put forth ideas that came to be known as “regulationism.” Rather than allow the state to run these programs—to actually govern them directly—the idea was to allow the private sector to offer them under supervision from the government. Methods used to exercise such regulations include limiting benefits to certain parts of the population—perhaps, for example, by age, gender, income or region of the country. A different approach is to cap the budget for the program in question. Many theories and approaches grew up under regulationism, leading to heavy pushback from conservative forces who opposed hiring enough civil servants to staff the regulating activities. One prominent diversion was a proposal to gain adherence to any program largely through tax rewards and punishments.

Most states proved not very good at designing workable ways of dealing with the kinks, especially as the economic strength of the 1960s sagged. Some countries had no faith in the regulations approach to begin with. By the middle of the following decade, worldwide economic recession, trending toward depression, pinched the capacity of governments to even regulate effectively, let alone run high-quality social services and programs.

Private sector forces recognized by the 1980s that huge amounts of money rested in pension plans, funds for social programs, public-operated insurance, and in dedicated financial pools set aside to meet unforeseen emergency conditions such as climate disasters, earthquakes, and even war. Corporations campaigned to get their hands on as much of that loot as they could. Promoters wasted no time adopting the ideological position we now know as neoliberalism to support and organize their efforts.

Such is the atmosphere that surrounds the Liberals in government in Canada. Carney’s predecessor, Justin Trudeau, held together party and government long enough to provide ambiguous support for existing public programs and to propose new ones. Pharmacare was one of those. But Trudeau’s forces turned on him and ushered in Carney, a believable champion of reliance on the private sector.

Beginning about three decades ago, researchers noted that the fastest-growing sectors in health treatments were pharmaceuticals. Corporations producing drugs experienced mounting sales. Their profits in recent years averaged in the neighbourhood of 20 percent. Studies also established that a goodly portion of Canadians could not afford the prescriptions, which worried the health professions, as well as the government to some degree. Pharmacare sounded like a good solution. When a fifth of drug spending disappears into corporate coffers, something has to be done.

Planning for a government program to offer coverage for prescription drugs soon experienced a quick and hard tug on the leash when designers of pharmacare rejected direct government control, production of pharmaceuticals, bulk buying and sale through a formulary to control costs, and so on. A seriously diluted pharmacare program was pushed through Parliament to step back from even mild regulationism.

Now with a precarious hold on a parliamentary majority, the Liberals exude confidence in their “nation building” drive. They pull funding and sometimes pull the plug on public programs. Pharmacare itself seems doomed now that the federal minister of health says it was always planned to come to an end.

The government is slashing billions more from the health care system. As Althia Raj reported in the Toronto Star:

The federal government won’t be renewing the $1.2 billion in annual transfers to the provinces that support mental health and addiction services, as well as home and community care, nor the $600 million in annual transfers for long-term care. It also looks like the $500 million annually set aside to increase Canadians access to expensive drugs for rare diseases won’t extend beyond next March.

And the Canada Health Transfer, which had been boosted by Trudeau’s government to grow by at least five per cent per year for five years, will now grow by three per cent after 2028.

Carney continues to trend to the right with quite conservative approaches to pension funding as well, relying on investments as opposed to earlier parliamentary decisions framing pensions as a right of citizens and an obligation of the state.

Big infrastructure projects, resource extraction, transportation and military spending huddle behind the nationalist slogans Carney uses to coax the public into support and to build out a majority in the House of Commons. Those of us who are skeptical that the results will be good see it more as a “pillage and pollution” trajectory. Securities won in assembling the post-war welfare state are now plainly on a downhill slide, with only whispered assurances that it will be all for the public good.

Pharmacare is just one dimension of a public health system now under significant pressure. Across the country, provincial governments increasingly favour private sector delivery and “market solutions” over universal public provision.

As Nikolas Barry-Shaw reports in The Breach, Alberta has become the clearest example of this trend. Danielle Smith’s government is aggressively opening the door to two-tier health care, expanded private insurance, and greater corporate involvement in medically necessary services.

“Industry representatives themselves have admitted it will open a ‘Pandora’s box’ of privatization that will spread to all medical services,” he writes.

That’s what ordinary people and progressive movements in Canada are up against.

Ken Collier is a retired professor of social work, social policy and economics who recently moved to North Bay, Ontario. He is active with the Council of Canadians, the Ontario Health Coalition and others. He researches and writes for progressive activist and research publications.