Prime Minister Justin Trudeau.
Prime Minister Justin Trudeau. Credit: CPAC Credit: CPAC

It looks like Big Pharma will soon be doing a victory dance. I hope I’m wrong, but it appears that years of intense lobbying by the powerful pharmaceutical and insurance industries have succeeded in pushing Justin Trudeau’s Liberals to abandon their long-promised commitment to bring down Canada’s exorbitant drug prices through a universal pharmacare program.

That retreat would have huge consequences. Pharmacare would guarantee all Canadians access to prescription drugs based on need — not ability to pay. It would be the first major public health-care advance in Canada in decades.

Unlike most wealthy nations, Canada lacks a national pharmaceutical program, leaving 7.5 million Canadians with no drug coverage, or seriously inadequate coverage. As a result, some asthmatic Canadian children don’t have access to an inhaler and some cancer patients lack access to antinausea drugs.

The Liberals’ deal with the NDP calls for pharmacare legislation by the end of 2023. But with only six weeks to go, the Liberals seem poised to discard a universal pharmacare plan — on the specious grounds that we can’t afford it.

Nothing could be farther from the truth.

By giving the government bulk purchasing power on behalf of 39 million Canadians, pharmacare would slash drug prices, saving Canadians billions of dollars a year, according to countless studies and to the federal government’s own advisory council, chaired by former Ontario health minister Dr. Eric Hoskins.

However, high-ranking Liberals have recently been echoing business hype that Canada’s deficit situation leaves us too fiscally constrained to launch this important new public program.

Asked about pharmacare, Finance Minister Chrystia Freeland dodged the question and instead gave reporters a mini lecture about fiscal responsibility. “It was Jean Chrétien and Paul Martin that did the very hard work of fighting to get the triple-A credit rating that Canada currently enjoys … We are committed to … maintaining that responsible fiscal foundation.”

Freeland’s implication that pharmacare might jeopardize Canada’s Triple A credit rating is, well, far-fetched, if not ridiculous. (Furthermore, Canada had a Triple A credit rating long before Chrétien and Martin came to power.)

Credit rating agencies are concerned about a country’s fiscal capacity and sustainability, and Canada’s fiscal position is strong — although you’d never know it from reading our business press.

In fact, Canada’s deficit is small by international standards. As the IMF recently pointed out, Canada’s general government deficit as a proportion of GDP is the second smallest among G20 countries (after Saudi Arabia), and Canada’s deficit is on track to decline further over the next five years.

This declining Canadian deficit was confirmed last month by Canada’s Parliamentary Budget Officer (PBO). The PBO also pointed out that pharmacare would cost an estimated $11.2 billion a year, rising to an annual cost of $13.4 billion in five years.

This means that pharmacare would increase Canadian government spending by the equivalent of about one-third of one percentage point of GDP, observes economist Jim Stanford, director of the Vancouver-based Centre for Future Work.

“The claim that one new spending program, modest in the grand scheme of the federal fiscal outlook, would alter a bond rater’s overall judgment of the government’s future fiscal sustainability, is not credible,” says Stanford.

Even so, politicians seem willing to conjure up the threat of a credit downgrade, scaring Canadians into falsely believing universal pharmacare is unaffordable. (Instead, the Liberals may propose a smaller means-tested program.)

First promised by the Liberals six years ago, universal pharmacare has been fiercely opposed by insurance companies and Big Pharma, as documented by the Council of Canadians. Big Pharma has long charged Americans the world’s highest drug prices and is determined to keep Canadian drug prices closely in line.

As the Liberals prepare to scrap universal pharmacare, don’t be fooled into believing it’s because we can’t afford it. The real reason is that Trudeau doesn’t have the backbone to take on two powerful industries that aren’t shy about throwing their weight around.

This article was originally published in the Toronto Star.

Linda McQuaig

Journalist and best-selling author Linda McQuaig has developed a reputation for challenging the establishment. As a reporter for The Globe and Mail, she won a National Newspaper Award in 1989...