The Encyclopedia of Saskatchewan

 

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Drug Plan

Since 1945, public drug benefits have been an area of notable Saskatchewan innovation and change. In the post-war period, public drug benefits existed for certain population groups (social welfare recipients), for certain chronic conditions (cancer, mental health, tuberculosis), and for particular types of treatment (acute care). However, the introduction of the service on a universal basis was opposed due to financial considerations and “the extremely difficult problems of cost control.” At the national level, three major studies—the report of the Restrictive Trade Practices Commission (1963), the Hall Royal Commission on Health Services (1964), and the final report of the House of Commons Special Committee on Drug Costs and Prices (1967)—presented a common finding with respect to the excessively high costs of prescription drugs. In addition, the Hall Commission highlighted the need for drug benefits within a national health system. These national investigations resulted in the introduction of federal compulsory licensing legislation in 1969. The legislation had the effect of encouraging generic drug products and lowering prescription drug prices.

In Saskatchewan, the report of the Advisory Planning Committee on Medical Care (1961), chaired by W.P. Thompson, recommended the establishment of a universal medical care insurance plan, but rejected the introduction of a comprehensive drug program due to concerns regarding predicted high and escalating drug costs. Resolutions were, however, endorsed at the Saskatchewan New Democratic Party (NDP) annual conventions during the period 1963–69 in support of a prescription drug plan; and the 1971 election program committed the party to the establishment of a drug program upon assuming office. Two provincial studies—a 1966 study of prescription drug costs incurred by Weyburn area residents and a 1973 review of provincial prices and prescribing practices—revealed an uneven distribution of drug use and cost among residents, as well as the existence of “unacceptably high” drug prices.

Against this background, the Saskatchewan Prescription Drug Plan came into effect on September 1, 1975. The Drug Plan provided coverage to all Saskatchewan residents, with consumers paying a maximum of $2 for each drug. Use of a product formulary, bulk purchasing of drug products, and creation of a standard dispensing fee were the other main features of the new provincial program. A 1983 review of the program concluded that “the Plan had, in most instances, met its original objectives,” and that any changes in the Plan were not recommended “given the Plan’s popularity among the general public, its qualified approval by professionals and its cost advantages in comparison to other drug programs.” However, provincial funding in support of the program increased dramatically, with expenditures growing by an average annual rate of 41% over the period 1976 to 1986. On July 1, 1987, the Drug Plan was changed to a deductible arrangement, whereby most consumers paid the full cost of drugs and then submitted claims for an 80% reimbursement of amounts over an initial deductible level of $125 per family. Significant increases to the deductible level and co-payment arrangements were made in subsequent years. By 2002, Saskatchewan’s public drug programs provided benefits almost exclusively to those residents with the most pronounced health needs—individuals with low income, high drug costs, or a combination of these two conditions.

Daniel Hickey

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