The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

HANSARD

NOVA SCOTIA HOUSE OF ASSEMBLY

COMMITTEE

ON

PUBLIC ACCOUNTS

Wednesday, May 5, 2010

LEGISLATIVE CHAMBER

Department of Health

Pharmacare Programs

Printed and Published by Nova Scotia Hansard Reporting Services

PUBLIC ACCOUNTS COMMITTEE

Ms. Diana Whalen (Chairman)

Mr. Leonard Preyra (Vice-Chairman)

Mr. Clarrie MacKinnon

Ms. Becky Kent

Mr. Mat Whynott

Mr. Maurice Smith

Hon. Keith Colwell

Hon. Cecil Clarke

Mr. Chuck Porter

[Mr. Gordon Gosse replaced Ms. Becky Kent]

[Mr. Allan MacMaster replaced Hon. Cecil Clarke]

[Hon. Christopher d'Entremont replaced Mr. Chuck Porter]

WITNESSES

Department of Health

Mr. Kevin McNamara, Deputy Minister

Ms. Judy McPhee, Manager, Drug Programs

Ms. Linda Penny, Chief Financial Officer.

In Attendance:

Mrs. Darlene Henry

Legislative Committee Clerk

Mr. Alan Horgan

Deputy Auditor General

[Page 1]

HALIFAX, WEDNESDAY, MAY 5, 2010

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIRMAN

Ms. Diana Whalen

VICE-CHAIRMAN

Mr. Leonard Preyra

MR. LEONARD PREYRA (Chairman): Good morning. I'd like to call this meeting to order. Today we're going to talk about the Pharmacare Program and we have some witnesses here, so let's start with a round of introductions.

[The committee members and witnesses introduced themselves.]

MR. CHAIRMAN: Welcome to everyone. Thank you very much for coming. As per usual, we'll start off with a brief presentation, followed by questions.

Mr. McNamara.

MR. KEVIN MCNAMARA: Thanks very much, Mr. Chairman, and members of the committee. As was mentioned, I have with me Judy McPhee, the Acting Director of Pharmaceutical Services at our Department of Health, and Linda Penny, who is our Chief Financial Officer. I am pleased that they have joined me here today.

It is my pleasure to speak to you this morning about the Pharmacare Program and prescription drug coverage in Nova Scotia. The Canadian Institute for Health Information, or CIHI, as it is more commonly known, recently issued its annual report on drug expenditure in Canada. The report examines annual drug expenditures in the country, with comparisons to other developed countries and between public and private payers and between provinces and territories.

1

[Page 2]

The CIHI report reflects what we have been experiencing here in this province - drug costs are growing at a fast rate. Rising drug costs are an issue not only for the public sector, but for the private sector as well and within this province and across our country. We know that prescription drugs are the second-largest category in public health spending in Canada - in this province spending on drugs is fourth, after hospitals, physicians, and continuing care.

Our goal at the Department of Health is to ensure that Nova Scotians have access to the most appropriate medications at the best price. Our province's Pharmacare Program helps ensure Nova Scotians, individuals, families, and seniors are able to get and afford the drugs they need to stay healthy and to manage illness. Our two largest programs are Seniors' Pharmacare and Family Pharmacare - the other programs are the Diabetes Assistance Program and drug assistance for cancer patients, and the Department of Community Services provides drug coverage for some of its clients, in addition.

The cost of the Pharmacare Program overall has grown significantly in the past years. For example - in 2008-09, the total cost of all Pharmacare Programs was about $240 million; in 2009-10 we estimate the cost at approximately $265 million; and the projected costs for this fiscal year of 2010-11 is in the range of $275 million, up $35 million in three years.

Many factors impact the program cost - the main factors are the cost of drugs and how much the plans are used or utilized. While costs are growing, we also have an increase in the uptake in our Pharmacare Programs as a whole. Where we are seeing the most growth is in Seniors' and Family Pharmacare - today there are more than 36,000 individual Nova Scotians, or about 22,000 families, enrolled in our Family Pharmacare Program, which was introduced just over two years ago, in March 2008, and thousands of Nova Scotians have benefited from Family Pharmacare, a program designed to assist those who do not have drug coverage or who are experiencing high drug costs not covered by their insurance. It is the only Pharmacare Program in Atlantic Canada open to all residents, regardless of their income, and it costs nothing to join.

We encourage all Nova Scotians to register for the program, in case they could benefit. The number of seniors registered in Seniors' Pharmacare has grown from 94,000 in March 2007 to almost 102,000 as of March 2010, an increase of 8,000. This is a reflection of our province's aging population. We are seeing baby boomers start to retire so the number of seniors is and will continue to increase. Nova Scotia has one of the largest percentages of people over 65 in Canada. The Seniors' Pharmacare Program helps ensure seniors have affordable access to the drugs they need. We know the cost of prescription drugs is often a concern for seniors. This is why the department is holding the line on the cost paid by seniors despite a significant increase in program costs. Seniors are paying the same costs to be part of the program this year as they have in the past three years, without an increase in cost to taxpayers.

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Again, to be clear, there is no change in the amount paid by individual seniors. They will continue to pay the same amount, and the most vulnerable seniors still pay no more than $382 for drugs under the program per year. Seniors are affected collectively as a group, not as individuals. By making this change, the program remains affordable for seniors today and sustainable for the future.

Changes to the program are discussed with the Group of IX seniors' organization through the Department of Seniors. To improve access to care for Nova Scotians and to manage the growth of drug costs, we're looking at innovative and creative ways to work in partnerships with pharmacists, pharmacies, and drug manufacturers.

We value the work and expertise of our pharmacists. Through amendments to the Pharmacy Act introduced by the Minister of Health in the House of Assembly in late March, pharmacists will be able to more completely use their skills and training as experts in drug therapy. This will improve access to care for Nova Scotians and create efficiencies in our health system. We know that pharmacists are committed to expanding their role in the health system. Once the amendments pass, the Nova Scotia College of Registered Pharmacists will start work with the department on regulations and standards of care.

We are working on developing new ways to work with our pharmacists, pharmacies, and drug manufacturers to manage and control growing drug costs. We are in the early stages of establishing a drug management policy unit. Through this unit, we will develop policies and strategies to manage drug spending, enhance prescribing practices, and improve utilization of drugs and drug outcomes.

By building on the work of the department's pharmaceutical branch, the unit will lead a number of initiatives with the goal of making prescription drugs more affordable for Nova Scotians. This is part of our effort to ensure what we are spending on drugs is being spent wisely and we are getting value for money.

We are also working with our counterparts in the other Atlantic Provinces to explore opportunities to work together in reducing the growth of drug costs.

Decisions about the coverage of drugs are very carefully weighed. We have an established process in place to make these decisions. The process is rigorous, it is comprehensive, and it is consistent. It involves the examination of clinical evidence, ethical considerations, and the cost effectiveness of a drug.

In closing, I want to say how committed, as a department, we are to making sure Pharmacare Programs are available to Nova Scotians who need help with their prescription drug costs for years to come. We are also committed to ensuring Nova Scotians have access to the most appropriate medications at the best price.

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I want to thank you for the opportunity to appear today. Judy, Linda, and I look forward to answering your questions.

MR. CHAIRMAN: Thank you, Mr. McNamara. As usual, we will start with a 20-minute round of questioning, beginning with the Official Opposition and Diana Whalen. It is 9:12 a.m. You have 20 minutes.

MS. DIANA WHALEN: Certainly this is a very large spending item - lots of items to look at and the number of programs under the Pharmacare umbrella - so I certainly welcome you here today. As I joked coming in, you've spent a lot of time in the Chamber as of late with the estimates, so I know that you're very familiar with being with us here today, and I welcome your staff.

I had some questions in each of the four programs that I was looking at, but I would like to start with our Seniors' Pharmacare, if I could. My interest there is primarily around the overall cost and where we're headed with it in the future.

You mentioned, and I guess I would like to know something around the introduction of a drug management committee - I forget the exact term you used, but you know what I'm talking about - that's coming into play and which will actually be responsible for, perhaps, expanding the drugs that we have. Can you give us a timeline on when that might be coming, because that seems to be fundamental to a lot of the drug coverage that we're talking about.

MR. MCNAMARA: The commitment of the government and the minister is to have this in place in the next fiscal year. So we'll be doing the work and the planning during the rest of this year to get it up and in place.

MS. WHALEN: Okay, that's good, and just for the context, I think that's important. Now, you mentioned in your opening comments that there would be no change to the premium and copays for seniors this coming year. So the actual premium to come into the system remains exactly the same, is that right, and the maximum copay per year?

MR. MCNAMARA: I'm going to ask Judy to respond to that.

MS. JUDY MCPHEE: The premium remains at $424 and the maximum copay is $382.

MS. WHALEN: So $806 is the maximum per person?

MS. MCPHEE: That would be the maximum that a senior would pay, yes.

MS. WHALEN: Given that many seniors are on it, I think the average, it said in the news recently, was five drugs each, an average of at least five drugs, I imagine that it doesn't

[Page 5]

take much to get to that. Could you say what percentage of the people who are enrolled actually do reach the maximum?

MS. MCPHEE: Well, there are two maximums. There's the premium at $424. So about 50 per cent of our seniors are premium exempt. If seniors are in receipt of the GIS, they are exempt from paying the premium, as well as, if they're lower income seniors the premium can be adjusted based on their income. So we have about another 2,500 seniors who do get a reduced premium. As far as the copayment, reaching the maximum copayment, about 50 per cent as well reach the maximum copayment.

[9:15 a.m.]

MS. WHALEN: And that is a significant number of participants in this program as well, it's 101,000 - is that right? The figures that we were given in our package said for 2009-10, that it was 101,000. I made a note there that we have, I think, 1,000 people every month turning 65. I think I saw that figure recently when we were talking about our aging population. So, we can expect that to grow by, probably, about 12,000 a year going forward. So that certainly is a big concern.

I wanted to ask you if you had any idea about the gross drug costs that are coming up in 2010-11, how much it has increased? You may have had that in your presentation, but can you say how much it's going to be in this current fiscal year?

MS. MCPHEE: Yes, we're estimating that it will increase by approximately 5 per cent over the next year and that would bring it to the gross cost of approximately $193.

MS. WHALEN: Okay, and that's the seniors' portion of Pharmacare, very good. Now, you mentioned as well in your opening remarks the Group of IX, and I wondered if we could just get an idea what role they might play in terms of providing advice to you about additions to the formulary?

MR. MCNAMARA: What we do when we do have issues around the premiums with the Seniors' Pharmacare, we meet with the group of nine. We talk to them about the plans that we have, and we do get their advice. As a matter of fact, with the change that was made last year in looking at the percentage, the percentage that we came in with was based on their advice, and so we adopted their recommendation.

MS. WHALEN: Can I just explore that a little bit. When you say the percentage was based on their advice, that was your changing of the cost-sharing of the program, is that right?

MR. MCNAMARA: That was the plus or minus, was it 5 per cent?

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MS. MCPHEE: The change was - seniors collectively cost-share the program at around 25 per cent plus or minus, and the change was from a plus or minus 1 per cent to a plus or minus 3 per cent.

MS. WHALEN: So, in fact, that would be when there was some attention on this earlier in the year - was that, really, seniors are now bearing a heavier percentage this year than they had previously, and really will, they can now bear up to 28 per cent, right?

MS. MCPHEE: Collectively they could, that would be the trigger. When we're projecting what our costs will be for the upcoming year, we have to take into consideration, or make estimates on a large number of variables; how many seniors are going to be in our program, how many are going to be paying premiums, how many are going to be paying full copayments, all of those things, what the drug costs are going to be. So there's a lot of estimation that goes on to try to come close to 25 per cent. So we changed the trigger point at which we would need to adjust and make changes to their premium and copayment from plus or minus 1 per cent to plus or minus 3 per cent.

MS. WHALEN: Ultimately does it mean they're bearing, this year, a higher percentage of the cost? I know it will vary from year to year but does it mean this year they're above the 25 per cent and holding?

MS. MCPHEE: This past year they came in at about 26.2 per cent.

MS. WHALEN: I'm not sure if I understood Mr. McNamara right, but are you suggesting that it was the Group of IX that thought this was a good idea, to give you a greater latitude, the 3 per cent, plus or minus?

MR. MCNAMARA: In our meeting with them, we were looking at various percentages. They were the ones that recommended to us the plus or minus 3 per cent and that was one the minister adopted and accepted.

MS. WHALEN: Can I ask, were there other scenarios presented to them that might have been less palatable?

MR. MCNAMARA: There were ones - yes, there were.

MS. WHALEN: So it was either, we're going to change this, this or this - what do you think is the least damaging or the least harmful?

MR. MCNAMARA: No, they were the ones that came up with the plus or minus 3 per cent. The amount we had looked at was higher than that, so it was their recommendation that came back that was looked at by the minister and accepted.

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MS. WHALEN: I thought it was surprising at the time that they didn't really speak out louder in defence of the members of the plan and the ones that are paying into it. They were fairly silent on it. I guess you're saying they had come up with this solution.

You wouldn't like to tell us the other choices? Are you able to tell us what else was on the table?

MR. MCNAMARA: I think it was 5 per cent, the one we were looking at as making some sense and also trying to give some flexibility so we didn't have to keep coming back year after year to do it.

MS. WHALEN: So it really was mainly around that threshold of variation. I'd like to go back to the Drug Management Unit and just ask what role this unit would probably play in getting new drugs listed? You said it would have a basket of roles in terms of your opening comments. You mentioned it would enhance effectiveness and usage. But what role would they have in getting new drugs listed? Is this where that decision will go?

MR. MCNAMARA: No, the new drugs, we still have a process and that will continue, but when we're talking about drug management, we haven't got all the terms figured out yet. We are looking at issues, for example, on utilization, are there different ways? There's also looking at cost effectiveness in a different way. For example, at a meeting I had recently with the medical staff executive and some of the department heads at Capital Health, they were talking about when we do an evaluation of drugs and cost and utilization, we do a very good job of roughly being in the right range.

But what we do not take into account are some of the other impacts. For example, if a certain drug is listed, how frequently is an individual required to get a lab test because they're on that drug? We're going to broaden the parameters of looking at our full cost effectiveness of the new drug.

Secondly, working up how we can work with pharmacists, physicians and others. A good example would be that there are many people who now get a prescription from their physician, go to a drug store, the drug store gives them three or four pages of information about what the . . .

MS. WHALEN: Okay, I understand, but that doesn't relate to the new drugs coming on board. That's more how you're seeing that better information. I'm sorry to interrupt you, but as you know in our Public Accounts, the clock is always ticking. I know the Chair understands that as well. So, I'd just like to move to how we're considering new drugs. What I had in the package we received was a list of drugs that had been reviewed in 2009-10. There was a one-pager here that listed different drugs and their brand names and these ones were not funded. Lucentis was among those drugs that were reviewed in 2009-10. I

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wondered first of all if you could tell me, was that review done early in the year or after the last election on June 9, 2009?

MS. MCPHEE: Lucentis was actually reviewed by the Common Drug Review, which is a national committee that reviews drugs and makes recommendations to governments. That review took place in the Spring of 2008.

MS. WHALEN: Okay, but it does appear here under this 2009-10 -the following products were reviewed for inclusion in Nova Scotia's Pharmacare Program and not funded.

MS. MCPHEE: Right. So it was included in the budget, as a budget pressure.

MS. WHALEN: So you're saying in 2009-10, when the Spring budget was tabled, it had been reviewed prior to that and not included and that would have been the Progressive Conservative budget that was brought in in May 2009.

You mentioned it was reviewed by a national committee. You said the Common Drug Review committee, which is national, but it's interesting that it's now been adopted by all nine provinces other than Nova Scotia. Most recently P.E.I. last Friday. So has the national Common Drug Review committee that reviewed it in 2008 had a comment on it? I would say obviously they've said it's a good drug to fund. Could you comment on that, Mr. McNamara?

MR. MCNAMARA: There's no question that the drug is a good drug to fund. What we are doing with this, the funding pressures that we have within government to be able to afford programs and to make choices under difficult circumstances. What we're dealing with is the ability to be able to fund not just new drugs but new programs.

MS. WHALEN: Could you tell me when the next meeting will take place where you'll be making decisions to add or delete drugs from the formulary? Is there one time in the year that you meet to consider them?

MS. MCPHEE: Most drugs that we review or that recommendations come from the national Common Drug Review or Atlantic Common Drug Review - our two main review panels that make recommendations to government on whether or not to fund a drug - do not have the substantial budget impact that Lucentis has. Many of the drugs that are recommended are replacing another drug so in some instances even they will give cost savings. We are adding drugs throughout the year. It's only when there is a significant budget impact and we have to find the money elsewhere that it becomes an issue.

MS. WHALEN: Okay, but there is an Atlantic Common Drug Review as well that you said makes recommendations. Has there been a recommendation on Lucentis from the Canadian Drug Review, the Common Drug Review or the Atlantic Common Drug Review?

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MS. MCPHEE: The recommendation from Lucentis came from the Common Drug Review. We have four review committees that make recommendations to government on whether or not to reimburse drugs or to add them to our benefit list. Depending upon what type of drug it is depends upon which review committee it goes through. Lucentis, being a new drug molecule, would have gone through - did go through the Common Drug Review.

MS. WHALEN: Could we just be clear that there was a recommendation to approve Lucentis?

MS. MCPHEE: A recommendation goes to each of the participating jurisdictions and yes, it was a positive recommendation.

MS. WHALEN: A positive recommendation, okay. My next question is, has the government requested that Lucentis be considered for any upcoming meetings of your internal group that would say yea or nay to new drugs?

.

MR. MCNAMARA: I'm going to answer that one. This is a funding issue, it's no longer an issue of going back to get a review on the drug. It's an issue of the government's ability to fund the drug so we accept that it is an appropriate drug to be funded when we can find the appropriate funds to do so.

MS. WHALEN: You may be aware that yesterday I talked about the $12.5 million that we expect to be saving as a result of pharmaceutical patents changing automatically over to generic drugs as they expire when their term is through. I know you're very well aware of the concept I'm talking about. We understood that there is about $12.5 million that will be freed up as a result of that because the generics are that much cheaper. In light of that, is that being considered so that we can find a way to fund Lucentis?

MR. MCNAMARA: When we worked through the generic issue with both the generic companies, our pharmacies and with an understanding of what the outcome will be then we can look and say what dollars do we have that we'll be able to do something. At this point, it's a speculation on what the amount may be. Also, we have to understand what the cost may be to the province in working with the pharmacies to find out what the final outcome is. At this point we don't know that figure but when we do that would be one thing that we would consider.

MS. WHALEN: I think it's clear that there are a lot of reasons to go for this and there are savings. I think before I leave that subject just to say, there certainly are savings if we can prevent blindness. One other thing you mentioned as well was, Ms. McPhee mentioned that you look for savings where it replaces another drug and the drug Avastin is a very expensive drug that was approved more recently in Nova Scotia and I understand they're using that in the treatment of macular degeneration. Again, I don't know how that compares cost-wise,

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but because Avastin is an approved drug, people are using that or some of the doctors are using that as a treatment for macular degeneration, so clearly there will be a savings there.

MR. MCNAMARA: Avastin is a lot cheaper as a treatment. The second thing when you mentioned about savings that we anticipate in the province. Every group that we meet with talks about how if we do something we'll save money and the interesting things is, over the last 10 years the Department of Health budget has doubled, so something isn't working.

Just for your information, costs on Avastin were $1.4 million.

MS. WHALEN: Okay. Our time is running short, so I wanted to ask a few questions around the Drug Assistance for Cancer Patients.

You've given us the figures, I think, on how many are covered in this plan right now. About 397 participants was what I had for 2009-10, and I wanted to find out just how much - could you indicate how much is spent on the Drug Assistance for Cancer Patients on an annual basis? What do we budget, really, for cancer patients under this Drug Assistance for Cancer Patients program?

MS. MCPHEE: Actually I don't have that number here. The Drug Assistance for Cancer Patients is for very low- income cancer patients, the income is around $15,700 so we do not have a lot of patients in that program. The costs are fairly small and I don't have them with me, but I can get you those.

MS. WHALEN: Could you tell me whether Avastin is included in that program? We do know that it is now allowed.

MS. MCPHEE: No, Avastin is not included in that program. We're talking about two different programs, I think. There is a Pharmacare Program for assistance with cancer drugs for patients who are very low income. They would cover - mainly their supportive drugs because most of the cancer drugs are funded centrally through the DHAs and at the cancer centres - Avastin.

[9:30 a.m.]

Then there are other oncology drugs that are being funded centrally, but they are being administered in the DHAs, so they are two separate. I think you had asked about the Pharmacare Program, which is for . . .

MS. WHALEN: I'm looking at the drug assistance for cancer . . .

MS. MCPHEE: Yes, and that's a Pharmacare Program and that is a very small program - it mainly covers supportive drugs, so things for nausea and vomiting.

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MS. WHALEN: So those are drugs that they take to go home and to manage their symptoms.

MS. MCPHEE: That's right.

MS. WHALEN: I wanted to know when the last time was that we looked at an increase in the gross family income threshold for this drug program for cancer patients. As you said, it is extremely low, $15,700 gross income, so the question is when was it last reviewed?

MS. MCPHEE: It was, I believe, about three or four years ago and it increased at that time to the $15,700 - previous to that I think it was around $13,000. That program actually predated Family Pharmacare and was a program that was put in place to help low-income cancer patients. It predated Family Pharmacare, so many of those individuals may now be on Family Pharmacare.

MS. WHALEN: Would you expect this Drug Assistance for Cancer Patients program then to really disappear and anybody who has that low income would go over to the Family Pharmacare?

MS. MCPHEE: Family Pharmacare would most likely be more beneficial to them. We are looking at all of our programs and what makes sense to transition patients to Family Pharmacare.

MS. WHALEN: I have a question around the number of patients who actually approached the department looking for assistance through this program in 2009-10 and how many actually were qualified. If you don't have the figures today, I would like you to bring them, if you could table them at another time or just send them - tabling is a bit too formal, send them to our clerk would be wonderful.

MR. CHAIRMAN: Ms. Whalen, your time has expired, I'm afraid, but if you would like, Ms. McPhee, I think the question was whether or not you can present it to us at some point.

MS. MCPHEE: Certainly.

MR. CHAIRMAN: Thank you. I'd like to welcome Mr. d'Entremont, the member for Argyle, to the committee. He is going to lead us off for the Progressive Conservatives for the next 20 minutes.

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[9:33 a.m. Ms. Diana Whalen took the Chair.]

HON. CHRISTOPHER D'ENTREMONT: Thank you very much, Mr. Chairman. It is a pleasure to just sit here and ask a few questions during this debate. I don't think I'm going to keep it at the feverish pace that the previous member kept it at because she had a lot of questions to get in there, so I hope she does have an opportunity at some other point to ask more questions of you.

First of all, I'd like to, of course, welcome Ms. Penny and Ms. McPhee. It is good to see you again. I know we spent a lot of time together in the last number of years on a couple of these programs, so if I'm asking questions that I probably already know it is just because I want it on the record.

The first question I really want to centre around is this change of plus or minus - the plus or minus 3 per cent or plus or minus 5 per cent issue with the Seniors' Pharmacare Program. This was a very important discussion that we had with the Group of IX, and to finally tie it down to the 75/25 split where the province picks up 75 per cent of the cost and the seniors themselves would pick up 25 per cent of the cost, and it came with a lot of discussion. It came with a lot of support, of course, from the Group of IX at the time. I'm just wondering where we all of a sudden ended up getting off the rails on this one and having to try to take another plus or minus 3 per cent from them on it?

MS. MCPHEE: As you know, seniors collectively cost-share 25 per cent of the premiums and the co-payments. So what was changed this year was the amount of leeway that we have, or in other words, the trigger point at which we would have to make an adjustment in the next year for seniors through their co-payment or their premiums. That leeway or trigger point changed from plus or minus 1 per cent, as you just mentioned, to plus or minus 3 per cent.

When we're forecasting or predicting program costs for the next year, we have to make a lot of estimates. We have to estimate the number of seniors who are in the program. We have to estimate the number of those seniors who are going to pay a premium, the number of seniors who will get a reduced premium, what that average reduced premium will be, and the number of seniors who are going to pay full co-payments or what we're going to bring in. So we have to estimate all of those revenues. At the same time, we have to estimate what the drug costs are going to be and also what the drug utilization is going to be, to try to come in as close to 25 per cent as possible. If we don't come in at 25 per cent, and previously if we didn't come in 25 per cent plus or minus 1 per cent, then we needed to make an adjustment to seniors' co-payments to bring them back in line to the 25 per cent.

What happened this past year was seniors came in at 26.2 per cent. So without changing the regulation, we would have had to make an adjustment in their deductibles and co-pays. When we looked at why the numbers were off, and they were at 26.2 per cent, it was

[Page 13]

because we had more seniors entering the program. Those seniors were paying larger premiums, so there were more seniors actually paying the premium and not requesting a premium exemption or a premium deductible. One of the big factors was also that the number of seniors that we had who were requesting a premium reduction, that average went from about $95 to $220. In effect what I'm saying is that there were more seniors in the program and those seniors had higher incomes.

So collectively we ended up collecting more than 25 per cent plus or minus. At 26.2 per cent under the old regulation we would need to change their co-payment or premium and reduce it, which would mean that although the cost of the program was still increasing, somebody would have to - and that somebody would be government - pick up the gap, which is approximately $3.4 million. So working with the seniors, they came up with the solution that no single senior is paying anything more. It's seniors as a collective group. So we worked with them and came up with - they suggested the plus or minus 3 per cent so we would not have to change the premium and co-payment this year.

MR. D'ENTREMONT: So ultimately what happened here is seniors ended up paying too much as a collective and those dollars were then reinvested in not raising their premium next year, is that correct? Of course I look over to the accountant.

MADAM CHAIRMAN: Is it Ms. Penny? Who do you want to have answer that?

MR. D'ENTREMONT: I don't know, it's really up to them who answers the question. They overpaid, where did the money go?

MADAM CHAIRMAN: Mr. McNamara.

MR. MCNAMARA: You're talking about the 0.2 per cent that would have gone, obviously to the program or into the government's revenue or reduced expenditures is another way of doing it.

I think it is interesting, and listening to Judy, I've been trying to understand this whole concept myself and I finally got it. Basically I think what has happened is there are more seniors coming in and more higher incomes so we're talking about the collective 25 per cent versus now we have the collective up to 28 per cent but it doesn't increase, an individual on a low income does not pay one cent more for their premium. If you look at many of our people who are retiring, they are retiring at higher incomes than they had in the past.

MR. D'ENTREMONT: Well the frustrating part that I had on this one is that after negotiating the 75-25, we've now gone to something other than 75-25. In the particular case where seniors have overpaid, I don't see the benefit that they received for that overpayment, if it is $3.6 million or anywhere from - I don't know what the exact calculations are of what they overpaid - where did that $3.6 million go or whatever is the number that we're quoting?

[Page 14]

Did it go to pay the next year's co-payment, to minimize that, or did it go to general revenues to help pay for staplers and things within the Department of Health or within government?

MR. MCNAMARA: It's cost avoidance, it is not increased revenue.

MR. D'ENTREMONT: All right, so I'll move on from that issue, even though it did frustrate me a little bit to see probably five years worth of work sort of spin out there. Because it doesn't, in my feeling, create as much predictability in the program than it would with the plus or minus 1 per cent on the 25 per cent payment by seniors.

If I move on to a second question and things that have been sitting within the Department of Health forever would be the issue of working with our counterparts in other provinces when it comes to issues like the Atlantic Common Drug Review, which does work, but what happened to bulk purchasing, some other opportunities that we might be able to do as Atlantic Provinces? Do we have any update on that?

MR. MCNAMARA: Sure, we are working with my counterparts in the other four Atlantic Provinces. We've had some really good discussions on how we can move forward. In fact, there's some really strong interest from P.E.I. in collectively working with us, not just on pharmaceuticals but some other opportunities in bulk purchasing. There is interest as well from the minister, from the four provinces, of how we may do some more things together.

As you can recognize from your time in dealing with other provinces, things move slowly, not as fast as we may like.

In terms of dealing with some of the bulk issues, New Brunswick has taken the lead right now, as the lead province in looking at how we can do some things better together.

MR. D'ENTREMONT: If we look at the whole issue of pharmaceuticals across the country, there have been a lot of moves over the past to try to bring more provinces together. Apparently the western provinces are doing much better than we are here in the east. Do you have any indication, whether you are sitting at a national table or a local table, of what kind of savings are being found by those other jurisdictions?

MR. MCNAMARA: Well there's a couple of ways. In terms of, for example, let's talk about hospitals, I'll start there. The hospitals in Nova Scotia belong to one of two national buying programs; one is HealthPRO, I think MedPro is the other. They participate in national pharmaceutical purchasing programs and that does assist in that area.

In the area of looking at other ways, in terms of Atlantic Canada, we're trying to see how we might be able to do things not just in - well first, in Atlantic Canada and then look and see with our peers in the other provinces, things we can do together. It is not as easy as we might like, particularly with the number of manufacturing firms, for example, being in Quebec there's a different agenda in how they would approach dealing with drug companies

[Page 15]

versus how we might like to deal with it. As you can probably guess, the drug field is very competitive. There is a lot of work going on that we have to deal with, both from province to province, doctor to doctor, patient to patient on which drugs are listed and how they're costed and how they're brought into the market.

MR. D'ENTREMONT: I probably shouldn't say this, because I'm sure I'll have the drug companies jumping on my head at some point along the way here, but we do need to find a way to cost contain that. We do have a lot of companies with lots of products who individually try to sell to doctors and hospitals and governments all at the same time. Not to say that I wasn't guilty of talking to a few drug companies along the way as well, but at the same time, we need to have a little more resolve.

If Nova Scotia can't get it done as an entity, then we do need to get bigger by that. For three provinces - let's say it is Prince Edward Island, New Brunswick, and Nova Scotia - we should find ways to be able to purchase together, and not to say that looking at Quebec or Ontario as well to get into some of their buying power would definitely try to bring down some of the costs that we struggle with on a daily basis.

Where have we gotten when it comes to drugs for rare diseases, whether it's - and I forget the names of the drugs as they float along, but there was, of course, that group down in the South Shore -

MR. MCNAMARA: They have Fabry's disease.

MR. D'ENTREMONT: Yes, Fabry's disease and things like that. Where has that gotten, because ultimately when we brought that issue in, there was a sort of three-way split on who was paying for those drugs. Where has that issue gotten?

MR. MCNAMARA: That issue at the present time is, the federal government dropped out of the cost sharing, and at the present time Nova Scotia did pick up the federal government's share to continue through the process of the study, and we're waiting for the final result. We believed as a province that we couldn't abandon those patients in the middle of a study. It was unfortunate that the federal government did drop out, because we think that they should have been a major contributor, as had been negotiated by a former minister.

[9:45 a.m.]

MR. D'ENTREMONT: Yes, I know, and with the National Pharmacare Program as we tried to do it, one of the big pieces - we were willing to let everything else go, if it had been to find some kind of partnership with rare disease drugs, because of their exorbitant cost. We know in the case of Fabry's disease, I think it was a $300,000 to $400,000 per year issue for those patients, and we have seen other drugs that would probably reach into a

[Page 16]

million dollars per year, when it comes to enzyme replacements and those kinds of issues as well.

The final set of questions that I will ask revolves around the Family Pharmacare Program, and one that, of course, I was very proud to have been minister when we brought that one in. I'm just wondering how subscription has been on it, what the uptake has been. We are seeing more than 36,000 individuals on it now and the costs that associate with it, so it is a big question, but where are we today on that issue?

MR. MCNAMARA: Ms. McPhee can answer that.

MS. MCPHEE: Sure. As you mentioned, we do have about 36,000 individuals enrolled in Family Pharmacare, which translates into about 22,500 families. The cost is approaching total costs of around $30 million, with government costs of last year of about $18.6 million.

MR. D'ENTREMONT: With 36,000 individuals, where are we growing to? What is the speed of uptake, or have we reached a ceiling on that in the way the program is designed at this point?

MS. MCPHEE: Well, the growth between 2008-09 and 2009-10 in Family Pharmacare was about 46 per cent, so I guess another year or so will tell us where we're going to peak.

MR. D'ENTREMONT: All right, because we're getting into year four at this point - year three, year four?

MS. MCPHEE: It was implemented March 1, 2008, so we just passed the two year mark.

MR. D'ENTREMONT: With the dollars associated with it, if we were into $18.6 million at this point, where does that put us for next year? If we're looking at that kind of growth, are we prepared for another, I don't know, $10 million or another $5 million, depending on where that growth is going to be, it's very hard to predict. I remember the discussions we had with the economists and really trying to figure out where those numbers were going.

MS. MCPHEE: As you said, it's very hard to predict. What we found in the last year was we did estimates and we have to adjust monthly because it is extremely hard to predict. I think in the next year, we are looking at a growth rate of about 5 per cent, as well.

MR. D'ENTREMONT: Ms. Penny has a number?

[Page 17]

MS. LINDA PENNY: Yes, just to comment, or just looking at it, we have budgeted high in that area because it's so hard to predict. I think now we're getting to a levelling point because we've budgeted $26 million for this year, which is the same budget we had last year but we didn't come near reaching it. It's growing steadily.

MR. D'ENTREMONT: I remember that kind of frustration too. Actually, as a budget-levelling issue, you could use that number as the year went on. As the year starts to solidify itself, you realize you don't need the $26 million so you can actually make some adjustments in other programs as well.

I'm also wondering, too - I wouldn't call it a complicated program, but it's definitely a challenging program for people to understand - are there any tweaks or changes that we foresee with that program as it starts to go forward, just to make it more user friendly for Nova Scotians?

MR. MCNAMARA: That would be one of the issues. We looked through the drug management program to see what are the opportunities and best usage of medications for the future.

MR. D'ENTREMONT: Okay. Sort of the final set of questions on this one would be, we have how many drug programs in the province? Five or six major programs, whether we add the children's Pharmacare Program in Community Services, the other program in Community Services, the two programs we have at Department of Health, it goes on and on from there. How are we making out with the amalgamation of maybe some of those programs into one program so that it's even easier for government to predict the dollars required for drug programs?

MR. MCNAMARA: I've had some discussions with the Deputy Minister of Community Services and there is interest in trying to make it work. We just have to do a lot of homework in order to make sure there's some viability in moving it forward, so first not to disadvantage those who are participating in the program and at the same time to make sure that it is fair to all Nova Scotians and to the taxpayers.

MR. D'ENTREMONT: Yes, because I think in the beginning it was to look at the opportunity of either co-pay or - well, not co-pay but the deductible, to get the Department of Community Services to pay the Department of Health for those costs associated with it. Then it would make it pretty much the same program that the Department of Community Services has today.

Again, there was the cancer program which has the low threshold, the diabetes program which really should be rolled back up into the Pharmacare Program and being able to match up, make sure the numbers make sense for individuals, and it goes on. How many

[Page 18]

programs do we actually have of Pharmacare Programs that we pay drugs in one way or another?

MR. MCNAMARA: I think you've listed them all.

MR. D'ENTREMONT: I'm thinking, but I'm not sure.

MR. MCNAMARA: The one thing I can, just for the record, in terms of the diabetes program, we have rolled that into the Family Pharmacare for new subscribers. But we haven't grandfathered those individuals who wish to remain with the old program until it makes sense for them to switch to the Family Pharmacare. But all new subscribers would go to Family Pharmacare and those who wish to switch over were given that opportunity and the majority did.

The number of programs are the Seniors' Pharmacare, Family Pharmacare which you've mentioned, the exception drugs which we deal with, diabetes assistance, and the oncology drugs. The only one you missed was the exception drugs.

MR. D'ENTREMONT: I think I remember my briefing book, how much more time do I have?

MADAM CHAIRMAN: Just 20 seconds.

MR. D'ENTREMONT: I'll leave it at that and thank the deputy minister, and of course Linda and Judy for being here as well. I know they're very busy with this issue, as well, and hopefully I'll ask more questions as time goes on.

MADAM CHAIRMAN: That's right, you will have a second opportunity but for the moment, I'll turn the floor over to the NDP caucus to ask 20 minutes of questions. Mr. Whynott.

MR. MAT WHYNOTT: Thank you very much, Madam Chairman, and thank you for coming today. I think the Public Accounts Committee process is obviously important to the people of the province. Mr. McNamara and Ms. Penny, I didn't think we'd see you so soon since you were here for over 18 hours in estimates, so it's good to see you back.

Just a few quick questions in regard to the Seniors' Pharmacare. Can you explain the importance of the Seniors' Pharmacare Program to Nova Scotians? What does that really mean to a senior who, let's say, might live in HRM or Pictou County or Cape Breton, what does that mean for them?

MS. MCPHEE: I think it's a very important program for seniors and we certainly hear that from the Group of IX who represent seniors in the province. As mentioned in previous

[Page 19]

answers, the most that any senior would pay would be $806 per year, and many seniors are on many medications so the program is very utilized. So I think it's a very important program for seniors and one that we need to keep intact.

MR. WHYNOTT: Can you explain a little bit for me, like for instance, if there was a senior in my area who was looking for this service, how would they go about applying or going through the process? Can you take me step by step on how that works?

MS. MCPHEE: When a resident of Nova Scotia turns 65, a month prior to their date they will automatically get a package in the mail with the information for joining Seniors' Pharmacare. Certainly physicians and pharmacists are all aware of the Seniors' Pharmacare Program. The 1-800 number is available to seniors to get assistance with filling out their application and that kind of thing. Anybody who turns 65 automatically gets sent a package to join.

MR. WHYNOTT: You did mention in your opening remarks, Mr. McNamara, about the number of seniors who are receiving the program. Do we see a trend of more seniors in other parts of the province versus, let's say, HRM, is it proportionately distributed? How does that work? Any indication of that?

MR. MCNAMARA: I can't give you exactly for the Pharmacare Program but what I can tell you is that we do know in the rural areas of our province the number of seniors versus what we'll call the dependency ratio has changed considerably. There are more younger people moving to the urban area of metro Halifax and so we recognize that - so you might say in total numbers there may be more seniors in HRM because of the larger population, but percentage-wise it's more in the rural areas that we're having a higher senior population.

MR. WHYNOTT: I guess going back to Ms. McPhee, can you explain a little bit about the changes to the Seniors' Pharmacare Program that happened this year?

MS. MCPHEE: There were no changes to individual seniors' co-payments or premiums, they remained the same. The premium remained at $424 per year and the co-payment maximum remained at $382. The $806 has been in place for a number of years, actually since 2007, the co-payments and premiums have not changed.

MR. WHYNOTT: So for the last three years it hasn't . . .

MS. MCPHEE: That's right, for individual seniors.

MR. WHYNOTT: Why did the change to the seniors' share amount, the 25 per cent plus or minus 1 per cent, why did it change to 25 per cent plus or minus 3 per cent, and what implication does that have for individual seniors?

[Page 20]

MS. MCPHEE: I'll start with the easy part first. There is no implication for individual seniors, as I just mentioned. The premium has remained the same, as well as the co-payment has remained the same. The change that did occur was the plus or minus 1 per cent was changed to a plus or minus 3 per cent. That is the trigger point at which we would, in the next year, adjust the premiums or co-payments to bring the seniors back to closer to a 25 per cent cost share. It's the trigger point or the leeway that we have in trying to get to that 25 per cent.

That changed this year because this year we had more seniors coming into the program, more seniors were paying premiums and more seniors were paying higher reduced premiums, so we took in more revenue from seniors collectively because there were more seniors in the program. The cost of the seniors' program was increasing because there are more seniors in the program, there's more utilization.

The change was put in place, in consultation with the Group of IX, so that we could still maintain, despite rising costs with seniors, their premium and co-payments at the same levels but not change their premium and co-payment, not lower it, which would mean that government would have to pick up the extra cost of having more seniors in the program.

MR. WHYNOTT: Do you know any - obviously with a lot of seniors in Nova Scotia and probably all over the country, they have various incomes, based on pensions and various money coming into their budgets, what sort of income ranges do we have, ranges of seniors in the program? Is there any breakdown of people who are - the uptake of that?

MS. MCPHEE: We do know the income of seniors who are premium exempt, so the seniors who are receiving the GIS and they do not have to pay a premium, so we do know their incomes. We also know the incomes of seniors who are requesting a reduction in their premium and the lower income. What we don't know explicitly are the incomes of seniors who are not requesting those. However, we do have a lot of good data from Statistics Canada and other sources that give us an idea that about 12 per cent of our seniors are over the $50,000 range.

[10:00 a.m.]

MR. WHYNOTT: Okay, thank you. One quick last question before I think I'm going to throw it over here to one of my colleagues. Mr. McNamara, you talked about working with other provinces, is there a specific working group working on this? Is it at the ministerial level? Are the departments in P.E.I. or New Brunswick or Newfoundland and Labrador working together to - what does that working group look like or can you lay that out, that foundation for me?

MR. MCNAMARA: A lot of work has been done led by one of the staff from our department, Dawn Frail, particularly around the generic drug issue, so she has done the homework for the four Atlantic Provinces. It is an issue that is discussed when the four

[Page 21]

deputies get together, it is also an issue that has been discussed at the last Atlantic Ministers meeting. The next one is coming up, I think it's in September, and there will also be a follow-up discussion on that. But the working group has started, particularly on the generic and then we're also, as I had mentioned earlier, looking at, with the lead from New Brunswick, purchasing in general, which would include the normal prescriptions rather than the specific.

MR. WHYNOTT: Okay, obviously that's a . . .

MR. MCNAMARA: I gave the wrong name, it's Jane Gillis, not Dawn Frail, sorry about that.

MR. WHYNOTT: That's okay. Obviously it's an important thing for this province and it's also, I'm sure, an important aspect of those provinces in trying to keep their costs down, as well, so that's good to hear.

I will throw it to my colleague, the member for Pictou East.

MADAM CHAIRMAN: Mr. MacKinnon, to continue. You have until 10:13 a.m.

MR. CLARRIE MACKINNON: It's great having you here and I have to get on the record very quickly in relation to the Seniors' Pharmacare Program. We've already established that Nova Scotia has one of the highest percentages of seniors in Canada. Pictou East, my constituency, has one of the largest percentages of seniors in Nova Scotia. The future of this program is extremely important to my constituency and every constituency throughout Nova Scotia. We're even hearing a new term now called the silver economy, and the fact that we have 1,000 Nova Scotians becoming 65 every month, and as the baby boomers come along in greater numbers, that is going to even represent larger numbers. So my concern is, we've already established that in a three-year period ending in 2010-11 we are seeing a $35 million increase. Are people in the department, are staff looking at five and 10 year projections, because this is when the health of this particular plan is going to be very difficult to deal with? So I'm throwing that out.

MR. MCNAMARA: Mr. MacKinnon, I think you and I probably represent the silver economy in this room by the colour of our hair. Having said that, they're talking about the oldest population, and one of the interesting things, having come from a DHA, each of us used to say we had the oldest population. So I'm not sure who has the real honour in the province, but having said all that, that's one of the areas - with the drug management unit that we will be looking at - how we can project in the longer term, how we can take the information that is presently available to us, and how we can work, and not just within this province, but with other provinces, to the best utilization, not only of costs but how we can utilize drugs appropriately.

[Page 22]

As I was trying to say a little bit earlier, there are many prescriptions that individuals get with two or three pages of instructions from a pharmacy talking about side effects. Individuals will go home and read them and not understand, and either not take the medication because they're afraid that something will happen to them, or on the other hand, we have many individuals who have a lot of pharmaceuticals sitting in their bathrooms and they're not utilized. How do we change our system so that people, when they get a drug, utilizes it appropriately? How do we make sure that people aren't getting too many prescriptions, because we have that, in many cases.

I think we saw, for example, when listening to a physician from Capital Health talking about seniors' homes where there are too many prescriptions being given there in a nursing home. So if we're doing that poor a job in nursing homes, what are we doing with individuals?

MR. MACKINNON: I want to continue to pursue the senior issue, and you're right about you and I representing the silver economy, I think me much more so than you, because I'll be part of those demographics next year, I'll be part of that 1,000 next year. I want to look at the Group of IX and how much real input does this Group of IX have?

MR. MCNAMARA: Yes, as mentioned earlier in having the input on the percentage. The minister and I met with the Group of IX but, in addition, the staff from the department meet with them on various items, whether it's Judy and her staff, to talk about issues around Pharmacare, but we also have other programs within the department that meet with them as well. So they do have real input. We do listen to them. We try to understand their issues, and they do have an impact on the final decision.

MR. MACKINNON: Now, I've heard, whether it's true or not, that the Group of IX meets, sometimes, 10 times a year. So you have to be taking them very seriously if, in fact, they're meeting with the Department of Health and interacting on such a regular basis?

MR. MCNAMARA: And as I said, we do meet with them, and we meet with them through the Department of Seniors which is the inroad for the Group of IX to the department.

MR. MACKINNON: One of my concerns, and I'm sure you'll be able to erase this concern, is how representative is the Group of IX when we look at - I'm always looking at urban/rural balances, and I'm also looking at geographic representation and so on, which I think is very important, and I'm sure that these groups, the Group of IX, would have a pretty good balance, but can you elaborate on that?

MR. MCNAMARA: The Group of IX has provincial memberships in their own right, and then when we look at - like at the last Group of IX meeting, for example, I know that the current chair is from Sydney. There are representatives from the South Shore areas, representatives even at the table they are geographically represented. Obviously, they

[Page 23]

represent the senior population, so that's the demographic and there is some diversity, but that's one of the areas that we have to expand a bit more, is in diversification.

MR. MACKINNON: My only sibling was a pharmacist who operated his own pharmacy for quite a number of years and recently sold to Lawton's. I say there's only one rich MacKinnon in my hometown and it's not me. I think he has done very well as a pharmacist.

One of the things that I'm really excited about are the changes in the Pharmacy Act which I think are going to have a great impact on Nova Scotia. In looking at people like my brother, I know they had the capabilities of doing more than they actually were doing in the pharmacy. Can you perhaps expand on that?

MR. MCNAMARA: One of the things is, when the bill is approved, we will then be working with the College of Pharmacists to come up with the programs and regulations that will set the standards on the type of activities that pharmacists can do, that will expand their scope of practice to their full training. We see great opportunities and we also see it as a real advantage in some of our rural areas where there may be other medical practitioners missing.

For example, I'll go back to my former health district in the New Germany area where there is a pharmacy, but no physician. So the pharmacist can refill prescriptions and be able to do some new activities for patients, which means the individual doesn't have to travel to Bridgewater, for example, to see a physician to get some of their medical needs met, so I think there's real advantages. I also think that we have to recognize that the pharmacist is much more knowledgeable about pharmaceuticals than many other health professionals because that's their area of expertise. Sometimes it will help in making sure that the patient gets the best medical advice on medications.

MR. MACKINNON: I'd like to stay on the senior issue for a bit longer, but I'm going to jump away from it. I have a very integral part of my constituency which is the Pictou Landing First Nation. The diabetes level in First Nations is significantly higher than other populations. I just want you to perhaps talk about the changes to the Diabetes Assistance Program.

MR. MCNAMARA: The basic change in the Diabetes Assistance Program is that we're discontinuing that program for new enrollees, but they can participate in the Family Pharmacare Program. It means they have access to more drugs than just the drugs related to diabetes. We have, as I mentioned, grandfathered those existing patients who wish to continue with the diabetes program and not transfer to the new program. In the long run, it will be much more beneficial, but I would also say in the case of First Nations, that is a federal program and their medications are funded through it.

[Page 24]

MR. MACKINNON: I was aware of that, as well, but I just wanted to emphasize the point that we do have a real problem within our First Nations and sort of tied that in with that question.

You probably won't have an opportunity to get into too much detail because my time is just about up, what will the drug management policy unit do?

MR. MCNAMARA: As I indicated, we're still working through the early stages of developing it and it will become effective next year. We want to look at ways that drugs are utilized better. We want to look at ways that we can manage for individuals to even look at our current institutional use of drugs and medications, how we can help other health care providers in being able to suggest the best practices in terms of drug utilization.

Also, I think, with the new approval that we just received for a drug information system province-wide, it's going to provide valuable information to us on usage of medications. We also hope to have a better monitoring program so that drugs aren't inappropriately used, which does occur in some cases, unfortunately.

MR. MACKINNON: Thank you very much - great having you here.

MADAM CHAIRMAN: Your time has elapsed now, thank you.

For the last round of questions we'll have 14-minute rounds, beginning with Mr. Colwell for the NDP - or for the Liberal Party, sorry . . .

MR. COLWELL: Had me scared there for a minute. (Laughter)

MADAM CHAIRMAN: I scared myself.

MR. COLWELL: Real scared.

MADAM CHAIRMAN: Exactly.

MR. COLWELL: Mr. Deputy, you mentioned Bill No. 7 and I concur, it's a very important bill before the Legislature and there's lots of very positive possibilities for that - what is the reason the bill is being held up in the Legislature, do you know?

MR. MCNAMARA: I'm not part of the legislative process, so I can't answer that question.

MR. COLWELL: Okay, so it's not something that's technical, that you are aware of.

MR. MCNAMARA: I'm not aware of any issue with it.

[Page 25]

MR. COLWELL: Okay. The diabetic program that you presently have, and as you said already they are putting new people into the new Pharmacare Program, will that cost the people more if they go into the new program versus the old program and, if so, how much more?

MS. MCPHEE: It's a different program in that it is more generous. Right now the Diabetes Assistance Program, it is a deductible and a co-payment structure, similar to Family Pharmacare, and it is based on income. However, it will only cover the person in the family with diabetes, whereas Family Pharmacare will cover the entire family's drug needs. As well, the Diabetes Assistance Program will only cover drugs for diabetes, not for any other condition that the individual or the patient may have.

[10:15 a.m.]

The Family Pharmacare Program, the deductibles are higher. There is a maximum co-payment in the Family Pharmacare Program whereas in the Diabetes Assistance Program it is a 20 per cent co-payment with no maximum. So there are differences, but for most individuals with diabetes the Family Pharmacare Program would be much more generous in terms of providing to all of their drug needs, not just their diabetes drugs.

MR. COLWELL: Originally on the diabetes program, was there an income threshold, a family income threshold for that?

MS. MCPHEE: No, anybody could join it, but it is based on income - there are deductibles based on income.

MR. COLWELL: That would be less generous or more generous than the Family Pharmacare Program or maybe not available to some people?

MS. MCPHEE: The deductible is not as high on the Diabetes Assistance Program as it is with the Family Pharmacare Program. However, it doesn't cover as much and it doesn't cover as many - it only covers the one individual in the family with diabetes.

MR. COLWELL: Will there be anybody eliminated because of income who wasn't eliminated before?

MS. MCPHEE: No.

MR. COLWELL: Okay. From what you're saying it sounds like you're trying to encourage people to go into the Family Pharmacare Program instead of the diabetes one?

MS. MCPHEE: Yes, the Diabetes Assistance Program was put in place prior to Family Pharmacare, and with the implementation of Family Pharmacare in March 2008 we

[Page 26]

saw the numbers dwindle or start to dwindle in the Diabetes Assistance Program. In fact, they dropped by over 80 per cent because the Family Pharmacare Program is more generous in terms of providing for all drug needs, not just for the diabetes drugs - also, it provides for the entire family, not just for the individual with diabetes.

MR. COLWELL: In February the pharmacists across the province were sent a bulletin indicating they had to limit the number of test strips Type 2 diabetics could access under the various Pharmacare Programs - fortunately this program was overturned later. Who, specifically, made this decision? What was the reason that decision was made?

MR. MCNAMARA: This was a decision based on a national study that looked at diabetes and said the best practice was to go a certain way, and it was a recommendation of staff to take it forward.

MR. COLWELL: And why was it reversed?

MR. MCNAMARA: My understanding is that there was - well, you can speak to the minister, she could answer that better than I can - I understand there were some individuals who had a misunderstanding of the need for the drug tests; also the Canadian Diabetes Association had a position on it; and obviously the drug companies that sell the test strip had a very strong position on it.

MR. COLWELL: I want to move to another thing, Medavie Blue Cross. I understand in 2005, the government negotiated a 10-year contract with Medavie Blue Cross to manage the Pharmacare Program for the Department of Health. Could you tell me what the value of that contract for the fiscal year 2010-11 is?

MR. MCNAMARA: I'm sorry, between us we don't have the information right here, but we can try to get it and table it for you.

MR. COLWELL: Okay.

MADAM CHAIRMAN: We'll make note of that.

MR. COLWELL: Could you also find out how much it paid to date? We have paid too much to administer this program since 2005 since it started.

MR. MCNAMARA: We will get that information for you.

MADAM CHAIRMAN: Okay, so you need to get that at another time?

MR. MCNAMARA: Yes, we don't have it here.

[Page 27]

MADAM CHAIRMAN: Okay, very good. We do like you to come with your financial information, but maybe this is different than the programs. Do you feel it's a little different?

MR. MCNAMARA: It is a little different.

MR. COLWELL: The last time the Pharmacare Program was audited was back in December 2004. At that time, specific recommendations were made under the contract. It was Atlantic Blue Cross at the time, now Medavie Blue Cross. At the time, the auditor recommended a performance-based third party service provider contract with defined roles, responsibilities, and performance, as one would expect. Was the contract in 2005 negotiated with a performance-based contract?

MR. MCNAMARA: I'm sorry, what was the final part of the question?

MR. COLWELL: Was the contract negotiated in 2005 a performance-based contract?

MR. MCNAMARA: We're currently going through an audit of the existing program of Medavie, and also looking at what other provinces are doing with them. We're doing some negotiations with them on a go-forward basis. I don't have all the details with me. I just know that staff are presently in that and working on our department's behalf.

MR. COLWELL: My question was, when the contract was negotiated in 2005, was it a performance-based contract, that they had to meet certain criteria?

MR. MCNAMARA: I'll ask Linda. I wasn't here.

MS. PENNY: Yes, it is a service level agreement, so there are quite a number of service levels that need to be met through the contract.

MR. COLWELL: Could you table a copy of the contract for the committee's benefit?

MS. PENNY: Yes.

MR. COLWELL: Thank you. Back in 2004, it was also indicated at the time the contract for administration of pharmacy programs were based on actual costs for providing the service. If these costs exceed the approved administrative budget, the department would examine the reasons and warrant increased funding. The report went on to further state that the actual costs of administering the program were not being reported to the department. Has that been changed?

MS. PENNY: I'm sorry, would you remind repeating that?

[Page 28]

MR. COLWELL: What I really wanted to know is, with the contract you have with the company, if they go over budget on the administration, is that cost borne by the department?

MS. PENNY: It's a contract that's structured. It has a fixed component and it also has a variable component. The fixed component, we would know. There is also an economic price adjustment factor which is factored in, so we know those things starting out. The only thing that would change is the variable costs. They're based on the number of transactions, so that is estimated at best. We've been doing pretty well on that front so we would have to pay the actual cost based on the variable transactions.

MR. COLWELL: Yes. Has there been an instance where the contracted amount exceeds the actual cost? And do we pay the contract over installments?

MS. PENNY: Yes.

MR. COLWELL: Okay. One of the other recommendations in the AG's Report five years ago was the need for the department to conduct a comprehensive evaluation of the options for reducing drug costs for the Pharmacare Program, specifically - and you already made some mention of this - bulk purchasing. To the best of your knowledge, were these recommendations options recommended to government by the company?

MR. MCNAMARA: I'm sorry, we don't know the answer to that question, we'll have to follow up for you.

MR. COLWELL: Many DHAs are involved in Medbuy, which enables them to bulk purchase supplies for facilities within their district. Does the Pharmacare Program purchase pharmaceuticals in bulk?

MS. MCPHEE: No, we don't, for Pharmacare Programs we don't purchase drugs, we actually reimburse. The pharmacies purchase the drugs and then we reimburse for our claimants based on a claim.

MR. COLWELL: In that reimbursement process, is there a fixed price you pay for a particular drug or is it something that each pharmacy charges a little bit different for?

MS. MCPHEE: It depends upon what the drug is. For drugs that are sole source, so there are no competitors, we pay actual acquisition costs and that is audited, so it's what the pharmacy actually purchased the drug for. For generic drugs where there are multiple suppliers, we pay a fixed cost and that's based on the lowest price of that generic.

MR. COLWELL: Is there a difference between what different pharmacies would pay for a patent drug, let's say?

[Page 29]

MS. MCPHEE: The actual acquisition costs, yes there are differences.

MR. COLWELL: That would be based on the bulk they purchase?

MS. MCPHEE: It would be based on what that pharmacy charges in up-charges, what their distribution cost is from the wholesaler, whether they got it direct or from a wholesaler, those types of things.

MR. COLWELL: And whatever their cost is, that's what you reimburse?

MS. MCPHEE: For brand name drugs, yes.

MR. COLWELL: I know you already mentioned, the deputy minister already mentioned that B.C., Alberta and Saskatchewan have signed an agreement, and one of the things is procurement of pharmaceuticals. You also indicated that there is some interest here and it's a slow moving process to get that lined up. Any idea how long this is going to take? I know it's difficult to answer. What I really should ask is, does it look like the Atlantic Provinces are committed to this?

MR. MCNAMARA: I would say that Nova Scotia and P.E.I. are very committed to it. I would say that New Brunswick is right now worrying about other things that are heading toward September. I would say that Newfoundland and Labrador probably has some different issues. I would say it's probably going to be faster with P.E.I. and Nova Scotia.

MR. COLWELL: Is there any opportunity for, say, Nova Scotia and Prince Edward Island, or whichever province, to join with other provinces like Quebec or Ontario because it just doesn't seem like it's a geographic thing. It would be more like an opportunity to buy in today's market. I mean, it's easy to move goods and agreements. Everything is done by computer now so it's pretty easy to deal with one company or the other.

MR. MCNAMARA: I think in terms of those programs where we're particularly involved in drugs, there are some opportunities. It's going to be harder when we do reimbursement programs but for example, I think that there might be opportunities within the long-term care sector, there might be opportunities with some of our DHAs to be able to expand some of the programs that do exist.

MADAM CHAIRMAN: Your time has just elapsed, Mr. Colwell. I'm going to turn it over to the Progressive Conservative caucus. Mr. d'Entremont, you have 14 minutes.

MR. D'ENTREMONT: I will be sharing my time with the member for Inverness. I have one question that fits in around the Ontario model. There is an issue going on there now when it comes to small pharmacies, small rural pharmacies for the most part. Because of their drug policy, apparently they're starting to cut into their profit margins. I'm trying to

[Page 30]

remember exactly how that one worked. Do you know of that issue and whether that kind of issue is coming to Nova Scotia at some point?

MR. MCNAMARA: It is an issue that we're aware of and we'll be working with the Pharmacy Association of Nova Scotia, first to understand the impact. We have to recognize that most of the generic issues would relate to the larger firms, for example, Shoppers and Lawtons, et cetera, but there are a number of independents, so we have to be aware of that. We also have to be aware that looking at how we impact a small pharmacy may benefit the national chains and cost the taxpayers a lot of money. So we have to work our way through the balance to ensure that we get a program that will both meet the needs of Nova Scotians from a cost perspective and at the same time meet the needs of our taxpayers, but we will be working with the Pharmacy Association of Nova Scotia and with the generic drug companies to best benefit Nova Scotians. Based on what's going on in Ontario, they've taken a very aggressive stand, and we are hoping to work in partnership with the Pharmacy Association for the benefit of all of us.

MR. D'ENTREMONT: Yes, because I think when it comes to the small, local pharmacy, basically the pays that those pharmacies would get, especially with the dispensing of drugs, is that there's the dispensing fee, of course, and that dispensing fee is normally based upon the list price, not their actual cost in some cases - plus there's a bonus that a pharmacy would receive depending on the kind of drugs or the quantity of drugs that they would do. So to a small local retailer it could mean anything from a few thousand dollars to maybe even $100,000. That means positions and people being able to offer services and that pharmacy being able to offer some specialty services to their populations. So anything that we can do to minimize that kind of flux that Ontario is receiving at this point, I think would be very prudent, and working with the Pharmacy Association would be a very good step.

MR. MCNAMARA: We recognize that as an issue, but at the same time I want to emphasize we ought to make sure that we do the best deal for Nova Scotians and the taxpayer at the same time.

[10:30 a.m.]

MR. D'ENTREMONT: That's right. At times, though, it's hard to throw the baby out with the bath water. For example, you take some communities, you're saving dollars on a tax base because you're trying not to take too much out of the pockets of Nova Scotians, but at the same time, you're making them drive 20 and 30 kilometres down the road to make it to a pharmacy because you just closed down their own local pharmacy. There's a very balanced issue that we have to watch out for when it comes to that one. Whatever comment you have for that one, but I will be sharing my time now with the member for Inverness.

MR. MCNAMARA: Just a comment - you may have heard on this morning's news, where the Superstores of the world are now going to expand their pharmacy services in order

[Page 31]

to take advantage of what's going on in Ontario, because they see it as new markets for them and they can do it at a lower cost. So we have to be careful we don't advantage the larger firms at the expense of everybody.

MADAM CHAIRMAN: Mr. MacMaster, and welcome.

MR. ALLAN MACMASTER: Thank you, Madam Chairman. The first question - and I do apologize if there's any duplication with these questions, I've just arrived - but the first question I had was around the number of seniors who are subscribing.

MS. MCPHEE: The number of seniors is approximately 101,000 in the program.

MR. MACMASTER: Okay, 101,000. Do you notice if they have any special needs? I would presume that seniors, of course, they may have more health problems as they get older. Is there anything you're noticing about that segment of the client base - any trends you're noticing around that segment?

MS. MCPHEE: The one trend that we are noticing is that the seniors who are coming into our programs seem to have higher incomes than they did previously, and we know that because we're collecting more premiums and the seniors who request premium reductions, the average for that has gone up significantly for that reduction. So we are seeing that it's probably with the baby boomers now reaching the senior age and having had good income.

MR. MACMASTER: Can you just expand upon that a little bit more? What does that actually mean for the program?

MS. MCPHEE: What that actually means for the program is that seniors contribute as a group, collectively, to the program at approximately 25 per cent of the program cost, but their costs are fixed. Their contributions are through premiums and co-payments, with the premium being $424 if a senior pays the total premium and the co-payment maximum being $382. So we have more seniors who are paying the premium, and even the reduced premium, they're paying more. We're taking in more money from seniors collectively because there are more seniors in the program and the premiums are higher.

MR. MACMASTER: So, we're starting to see seniors who are able to afford the premiums, which is probably a good thing for the program because if they are able to afford it that makes the program more sustainable.

MS. MCPHEE: That's correct.

MR. MACMASTER: I presume one of the main costs that the program would have would, obviously, be for drugs. Have you any measures in place to try and control the cost

[Page 32]

of drug and medication usage, whether it be from the perspective of choosing drugs that are cheaper than others, that type of thing, could you provide some kind of commentary on that?

MS. MCPHEE: Yes, we do have a number of measures. We have, first of all, the review process for getting on our formulary is very rigorous. It is based on scientific evidence and also on cost effectiveness. So, in effect, we don't want to be paying for drugs that give little benefit or have no value. So our formulary management process is quite rigorous.

As well, we are actually very lucky in Nova Scotia that we have the Drug Evaluation Alliance of Nova Scotia, which is a multidisciplinary team consisting of physicians, pharmacists, educators, researchers who look at drug utilization in the province and appropriate prescribing and target prescribers to ensure that that prescribing is appropriate. They use a number of different methods for doing that, academic detailing is one, also, live programming and that type of thing. So there is a lot of that going on.

As well as our pricing policies for generics, for example, if they are multi-sourced, meaning that there a number of the same drugs supplied generically by a number of different companies we will only pay the lowest cost of that generic if they are all deemed interchangeable. So those types of policies.

MR. MACMASTER: Okay, so with the generic drugs I would presume that would mean that the drug that would be prescribed for them by their physician, the physician would know that that drug comes under the formulary and it is not going to cost the patient any more, is that how that works?

MS. MCPHEE: Right, so if a physician prescribes a drug that is a generic drug and it has been declared interchangeable, so that it is the same, then the pharmacist is compelled actually, to automatically substitute the generic form rather than the brand name unless the physician has made a good reason why they cannot take the generic.

MR. MACMASTER: Right, thank you. What about the percentage of drugs that would be changing? I presume there are a lot of drugs that would be standard, that provide a solution for a need, but there is probably a percentage of drugs that are constantly changing, maybe new drugs to address illness. What percentage of drugs, roughly, would that constitute within the formulary?

MS. MCPHEE: Just for example, last year we added approximately 18 new drugs, so they are brand new molecules and about 200 generic drugs to the formulary. So the formulary is constantly changing and being updated. I don't know if that answers your question or not.

MR. MACMASTER: I guess what I was trying to discover with that question was if there are new drugs like the 18 that were brought on last year, if they're brought into the

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system - I'm just trying to get a handle on the cost. I would presume, as new drugs are brought in, they're new to market, they're solving a need or a pain - no pun intended - for the marketplace, they're probably at a premium and as time goes on generics come out and it drives the price down on that particular drug for whatever that need is. I was just trying to get a handle and perhaps I'll ask the question this way, is that a significant driver in the cost of the program, new drugs?

MS. MCPHEE: New drugs are a cost driver. A more significant cost driver, though, is drug utilization and appropriate drug use.

MR. MACMASTER: Are there any measures - and I realize this is perhaps not within your control, but I've often heard that one of the big costs for drugs is either drugs that are inappropriately prescribed or inappropriately taken by the patient. Is that the case?

MR. MCNAMARA: I'll start with that one. We recognize that that is an issue, and we're trying to address it in a number of ways. One is looking at a drug management unit that we're putting in place next year to help us with that. Secondly, we have got funding to put in a drug information system province-wide, which will be tied into not just the local pharmacies but to our acute care centres. Individuals will then be able to look and say what drugs individuals are taking.

The other thing, when you get a system like that, it does prompt when there are contraventions or other issues, it does help in terms of informing the prescriber or the provider that there are issues to deal with. It also tells them if somebody is getting a medication at another drug store that they may not be telling the pharmacist about, for example. So this, in due course, is going to add to a much better system and safety and quality to our patients.

MR. MACMASTER: That's great. So that's primarily based on being able to collect the information and provide it to the prescribers, because of improvements in the collection of information. That's good.

My next question would be, there are some drugs that have not been included. My colleague had indicated to me that Avastin was one that had been looked at recently, and I believe it is still not included. Could you provide an update on that?

MR. MCNAMARA: I'm not sure if it's here.

MR. MACMASTER: Well, perhaps we'll skip that one for today and we can direct a letter to your office about that matter.

MADAM CHAIRMAN: You have one minute left.

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MR. MACMASTER: One minute left. I think I'll just ask one last question about the formulary. How often is that updated? Is it once a year?

MS. MCPHEE: The formulary is updated continually throughout the year. We have expert review committees that are making recommendations to government on what should be funded, so we are continually updating it throughout the year as we get recommendations.

MR. MACMASTER: Thank you. Madam Chairman, I'll conclude my questioning with that.

MADAM CHAIRMAN: Thank you very much, and for the NDP caucus, Mr. Preyra, you have 14 minutes.

MR. LEONARD PREYRA: Thank you very much, Madam Chairman, and thank you very much for coming. This has been really informative.

I'd like to follow up on some questions that were asked earlier by Mr. MacMaster and Ms. Whalen about the formulary. I heard Ms. McPhee say that 18 new drugs and 200 new generic drugs were added to the formulary. A number of different groups have been mentioned in this process, the preapproval process or the recommendation process, and you mentioned the drug evaluation alliance and four review committees.

I understand that you are looking at clinical evidence and evidence-based policy making and the cost effectiveness, but how do all of these fit in together? What is the process that leads to the recommendation for a listing on the formulary?

MS. MCPHEE: As I mentioned, there are four different review processes, depending upon what type of drug it is. By far, the largest is our Common Drug Review, which does all new drugs, so all drugs that are coming on to market, and any old drugs that have gotten new indications. It is a national committee. There is a very rigorous review done of all of the scientific information, the clinical information. Experts in the field of whatever the drug happens to be in are consulted. There is a panel of experts as well, who actually look at all of the information debated and then finally come to a recommendation.

That committee of experts are physicians, mainly, pharmacists, there are epidemiologists, health economists, as well as public members on that national committee. So then they will make a recommendation to each of the participating jurisdictions for the national Common Drug Review. There are 18 participating jurisdictions, all of the provinces and territories in Canada with the exception of Quebec and, as well, a number of all of the federal drug plans. So they make a recommendation and then the recommendation goes to government to decide whether or not they can, if there's a positive recommendation, whether they can fund that particular drug.

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MR. PREYRA: So at the end of the day then, that committee that makes a recommendation has no access to information about the state of the province's finances or the department's budget and ability to pay for the program, it's based largely on clinical evidence and effectiveness as to the drug itself.

I had a question following up on Mr. McNamara's comment and maybe I didn't follow the answer properly. In answering an earlier question you said you were not evaluating new drugs, as such, but you were also evaluating new programs so that the drugs and the programs that supported it were all part of that larger evaluation, so it was a larger evaluation. Did I misunderstand?

MR. MCNAMARA: No, what I was talking about is when we were looking at the Drug Management Unit. At the present time the department, for example, if you're looking at a drug, we would look at the cost of the drug, what we project the number of users would be, the utilization, to come up with a dollar cost directly to the department I guess in the drug program. What I was saying, in meeting with the physicians from Capital Health, both the medical staff, the department heads, one of the recommendations is that we should broaden our cost benefit to look at the other cost factors involved in prescribing a new drug. For example, does a person have to get a lab test once a month and what's the cost of that? Do they have to get some other type of exam? So we do a cost- benefit analysis, we look at the full picture rather than just our little portion.

[10:45 a.m.]

MR. PREYRA: Okay, so you're looking at the whole administration from diagnosis to treatment and follow-up and the number of visits to the doctor that it will entail and that kind of thing?

MR. MCNAMARA: That is correct.

MR. PREYRA: I also wanted to go back to some earlier questions about generic drugs. I know that you had mentioned a working group, an Atlantic working group, that was working on I assume bulk purchasing and common decision-making. Where are we in terms of generic drugs and how do they affect the cost of drugs in general in our programs?

MR. MCNAMARA: The working group that has been in place has been basically doing Atlantic Canada to look at generic drugs and how we can work together in our approach to both the generic drug companies as well as working with our pharmacies in our four provinces through their individual organizations. In terms of looking at the larger picture of where we are, that part is in the preliminary stages. The generic drugs at the moment, we do not have an agreement among the four provinces of a common approach yet even though we're trying to work there. There have been suggestions but there are issues that provinces need to examine in their own right - what's the impact in their local jurisdictions, what is the

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impact on local pharmacies, as somebody else had questioned. So we will be bringing it back together to see how we can maybe do a better job of jointly working with the generic companies so that we have a common solution I guess to the problem across the four provinces.

One of the issues I'm sure that the public deals with, particularly in the Maritimes, is that we all have the same news media. So you see a story from a different province and you're trying to figure out how it relates to me as an individual. Some of the policies do create conflict and it's difficult for people to understand why a government or a certain province made a certain decision. So the things that we can make more common will be better for everyone.

MR. PREYRA: I have a question related to your earlier appearance here at the Public Accounts Committee and it's related to the whole information management exercise. It received great reviews, it's moving well ahead, but we didn't ask at that time I think how it relates to the Drug Management Policy Unit. Because it seems like it's very closely integrated now to keep over-prescriptions, double doctoring and and all that, I'm wondering how that process is working and maybe within the context of the Drug Management Policy Unit's mandate and it's effectiveness or where you expect it to be effective?

MR. MCNAMARA: Our anticipation, because we've just got approval with funding to move forward on a drug information system as well as with funding from Infoway Canada, so we will be putting the program in place. The things that we see we can do is one we will understand and have more information which is available whether it comes through pharmacies or comes through hospitals. It also will give us the opportunity to look and work with the medical examiner and others. For example, where there are issues around opiates, how we can do a better monitoring system so that individuals are not getting inappropriate medication.

We do have some monitoring systems on some medications in place around opiates at the present time, but we have to do a better job and expand the market that we review. We see that it is going to be a safer program for patients, we are going to see that there is better utilization, and we see it will be a much higher quality, but we need the information to be able to make this happen.

MR. PREYRA: You see this program as being integrated even more and more into the system as more physicians and more health care units come on-stream in the system itself?

MR. MCNAMARA: Definitely, and particularly as we are working with electronic medical records. Eventually we'll be able to connect everything together, but it is going to take us a while to get there.

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MR. PREYRA: I think I have a couple more minutes.

MADAM CHAIRMAN: You have six minutes.

MR. PREYRA: Oh, great, thank you. I have a general question. We've talked about specific programs, but we have an aging population, we have new drugs coming on, very expensive, and many of these are being recommended because they are effective in treating. What have we got in place to actually give that overall balance to the system and try to make sure that our medical costs, drug costs, don't go out of control relative to our ability to pay, or we meet growing needs, whether it is in rural Nova Scotia or in an aging population? Is there this larger governance mechanism that we have that is looking at the bigger picture?

MR. MCNAMARA: We are looking at our issue and our health sustainability in a bigger picture, which is going to involve medications, but also the utilization of services - where they are provided, and how we can best ensure that individuals have access to care, whether it is physicians or pharmacists, whether it is diabetes educators or others that are appropriate for them, but at the same time to utilize the dollars that have been entrusted to us by the taxpayers for the best use of Nova Scotians.

MR. PREYRA: We've seen a lot in the health care field in particular, in health and the broadening of scope of practice for health care practitioners. How is that going to affect the administration of drugs in the system or weaning people away from drugs? I know some of the health promotion initiatives we've looked at have aimed in that direction.

MR. MCNAMARA: We're hoping that the expertise that will be provided by pharmacists increasing their scope of practice, for example, will help us in many ways in being able to do appropriate utilization. A good example I can give you - talk about utilization - is in the area of depression. We know that medications given to people with low grade depression is useless. It's a waste of money and time and effort, but yet many people are given that. We're hoping that with the new system, with pharmacists having more involvement and understanding that, they'll be able to reduce those types of medications. There are other modalities of care we'll have to come up with to assist those individuals to be able to become full participants and deal with their depression.

MR. PREYRA: Now, are there expert panels and review committees that are actually looking at that side of the equation, where you're actually trying to get people away from a particular treatment into another stream and maybe reducing costs in that way? I'm assuming that these review committees are reviewing existing treatments as well, in addition to new possibilities, right? Do you keep data on how many things are removed from the formulary and what kinds of discussions go on before that? To Ms. McPhee.

MS. MCPHEE: Yes, we do remove things from the formulary as they fall out of favour or they are no longer providing a benefit. There are committees that are looking at

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drug utilization and appropriate prescribing and, as mentioned, the Drug Management Policy Unit will enhance those.

I had mentioned DEANS - the Drug Evaluation Alliance of Nova Scotia. That committee, for example, is looking at appropriate prescribing and how to put best practices forward. I mentioned the Common Drug Review, which is a national committee. There is also COMPUS, which is the Canadian Optimal Medication Prescribing and Utilization Service, sort of a sister of the CDR or the Common Drug Review, and it looks at best practices, too, in terms of prescribing and of utilization of drugs, so they are that and they are increasing because we know that drug utilization is one of our largest cost drivers.

MR. PREYRA: Thank you. Those are all the questions we have, Madam Chairman.

MADAM CHAIRMAN: That's very good; that's just a minute early, so you're just about bang on there.

I would like to go over a list of things that we've been promised or that have been requested by the committee - I know you were taking notes as well. We have the Drug Assistance Program for Cancer, that you would provide the cost and the number of patients who qualified - actually we wanted the numbers who had asked and applied for it and the numbers who had actually been qualified; on the Medavie Blue Cross, we looked for the contract, both the value, how much was paid to date and to table the contract itself from 2005; we asked about bulk purchasing; and an update on Avastin. I think that was everything, unless you have others on your list.

Again, as a courtesy, we always allow you to have a closing remark. We did appreciate your opening comments and receiving copies of it, but if you have any closing remarks, we'd be very happy to hear them.

MR. MCNAMARA: Very short. First I want to thank the committee for having us again today. We do appreciate coming here, but we also hope we're not here in the near future with some other work to do. I would also just like to say how committed the staff is in our department, in the Pharmacare Program, to ensure that we have a good program for Nova Scotians and for the patients who need it - and we are committed to ensuring that Nova Scotians have access to the appropriate drugs as we work our way through our fiscal challenges. Thank you.

MADAM CHAIRMAN: Thank you. Again, I think we learned a lot about the programs today - and I'm not sure when we'll be calling you back, we're setting our agenda next. Thank you very much and I'll give you a few moments to leave.

If I could have a motion to adjourn and then we can do our agenda setting. We'll just perhaps have a few minutes.

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MR. COLWELL: So moved.

MADAM CHAIRMAN: Thank you very much, I'll give you a five-minute break and we'll come back - not even five, come right back.

[10:55 a.m. The committee recessed.]

[11:00 a.m. The committee reconvened.]

MADAM CHAIRMAN: I would like to call this meeting back to order.

This is an agenda-setting meeting for the Public Accounts Committee and the full committee is here today. What we're going to do is we each have in front of us a list of where the gaps are in our upcoming schedule, and we have a couple of gaps - one in the month of May and one in the month of June - so what I would like to do is have each caucus, one by one, suggest an item from your list of topics and from that we will have a discussion and a vote on each one. Hopefully we will come out with three new subjects to schedule in for our coming weeks. So that is my intention today, and I would ask that we begin with the Liberal caucus.

If you could, Mr. Colwell, perhaps propose one of those as a priority for the next couple of months?

MR. COLWELL: I think our first item on the list, not the rest of our list being a priority list, but the first one, maintenance enforcement, that is a continuous ongoing problem I'm sure all MLAs are having.

MADAM CHAIRMAN: Okay. So maintenance enforcement is suggested as a topic for Public Accounts - is there discussion?

MR. MAURICE SMITH: Madam Chairman, I sit as well on the Community Services Committee and we just had these people in at the Community Services Committee in April, and we did an extensive review of maintenance enforcement programs and in particular the follow-up of the Auditor General's Report from June 2007. So, to my mind, it would be redundant for us to go through this one again so soon. It's virtually not a full month since they've been before the committee and it would just be, I think, a waste of time really to go at it again. That's my opinion. Thank you.

MADAM CHAIRMAN: Any comments, Mr. Preyra?

MR. PREYRA: The last time we looked at this issue we agreed to go and review the minutes from that meeting and I would agree with the member for Antigonish that we really

[Page 40]

did cover that in great detail. I think you were there yourself and asked some questions about the Auditor General's Report so I would concur.

MADAM CHAIRMAN: Shall we have a vote on that one, Mr. Colwell?

MR. COLWELL: Yes, I'd like a vote on it. We're out-numbered here anyway so whatever the NDP caucus wants to do, we'll be doing but I want a vote on it and I want a recorded vote.

MADAM CHAIRMAN: We can certainly have a vote on that and, again, this is a subject that can come back again. The motion is to bring the Maintenance Enforcement Program in as witnesses. Would all those in favour of the motion please say Aye.

Again, you know the rules, if we have two members asking for a recorded vote we'll go there. I think that I heard an approval there. Did we have two? Yes, Mr. MacMaster and Mr. Colwell. I'll just go through that, it's really a formality.

YEAS NAYS

Mr. Colwell Mr. Smith

Mr. MacMaster Mr. Whynott

Mr. Gosse

Mr. MacKinnon

Mr. Preyra

MADAM CHAIRMAN: For, 2 and Against, 5. It's immaterial for the Chair to vote in this one.

The motion is carried.

If we could have another item from the Liberal caucus, please.

MR. COLWELL: I'd like to put the Workers' Compensation Board on this.

MADAM CHAIRMAN: Very good. I think that is an item we haven't seen here at Public Accounts for quite some time. Mr. Smith.

MR. SMITH: When you say Workers' Compensation Board, could we have some detail as to what the issue would be that these people would be coming to speak about in terms of Public Accounts issues?

[Page 41]

MR. COLWELL: The issue with the Workers' Compensation is that there is a huge unfunded liability. We'd like to see exactly where that is, what they're doing to address that and how they plan to address it long term. It's a serious issue.

MR. SMITH: Is that Part II of the Act that he's looking at?

MADAM CHAIRMAN: I'm not sure, it certainly falls under our Department of Labour and Workforce Development.

MR. SMITH: There are two different ministers.

MADAM CHAIRMAN: Two different ministers? You're wondering more who we would call.

MR. SMITH: Yes, I want to know what we're going to be talking about.

MADAM CHAIRMAN: As you know, it's a charge on every single employer in the province that they're paying large fees to Workers' Compensation. We also have a very high rate of accidents on the job and we just recently marked the sad occasion of injured workers. So it's looking at the cost to run that program and looking at whether or not it's funded, how well it's funded.

MR. SMITH: Thank you for that. When you just said, Workers' Compensation Board, it didn't mean anything to me.

MADAM CHAIRMAN: I'm really tying it back to the province and what we would have concerns in terms of being the government of the province. We could talk to our clerk about who might come or perhaps ask Mr. Horgan who might come if we were calling Workers' Compensation. We have done so in the past. Maybe Mrs. Henry, have you an idea who we would call?

MRS. DARLENE HENRY (Legislative Committee Clerk): In the past it would have been the CEO of the Workers' Compensation Board and we can go through the Department of Labour and Workforce Development to inform the minister and the deputy.

MADAM CHAIRMAN: So that would be the idea, certainly, yes, Mr. Whynott.

MR. WHYNOTT: My only concern was a very broad-based thing and I would recommend that maybe we'd come back and have a time to find out who that would be and discuss it at the next meeting.

MADAM CHAIRMAN: The CEO is Nancy MacCready-Williams, I believe, and she is very well-spoken and has been with the organization a long time. I think she would be a

[Page 42]

natural to have. She would probably bring her chief financial officer, I would imagine, to speak to this. We could have a representative - the department would really choose who they send. For the committee, I know some members are new, what our clerk does in the process is contact the deputy minister's office and ask them, who would you like to have here? Who do you think is most appropriate? We usually don't know in advance exactly the best employee. We often ask within the department to have them determine whether it's a good use of the deputy minister's time or there's someone else they want to send.

MR. PREYRA: I think this is a really important topic and something that we should look at but I agree with the member for Hammonds Plains-Upper Sackville that we probably should get a little bit more clarity about what it is we want to get at. I would suggest that we address this issue again at our next meeting. Not to say we're not supporting it, but I think it would be nice to get some clarity about what kinds of issues we want to look at, and that would then determine who we actually invite. I would move that we just defer it until the next meeting.

MADAM CHAIRMAN: We have a motion on the table but I would like to hear from Mr. Colwell.

MR. COLWELL: I don't know what's not clear about looking at the unfunded liability of $700 million. That's strictly the Workers' Compensation Board that looks after that, they've got to come up with a plan how they're going to look after this, and how it's going to affect businesses in the province, and everything else. I'm not interested in deferral, and I want to see this move forward. This is a very important topic to the economy of the Province of Nova Scotia.

MADAM CHAIRMAN: There is a motion to defer it. I would again like to speak to the fact that this is a compelling issue - and our process in setting the agenda, we're only now doing it in public. We have previously, for the last number of years, since 2004, I believe, had in camera meetings, but what I think is important in this instance is that we've never had a rule to present a topic and then present our questions. That's really going a little bit far, I think, in terms of what we're expecting. What we have is an issue, we have an important organization that controls millions of dollars and provides a lot of funding to many people and they depend upon it. Companies are impacted by it because of the rates, so it has broad-ranging impacts on the province and I think it's a very good one for us to look at. I'm not sure that not having more information is a good reason to defer this.

MR. MACKINNON: Madam Chairman, I consider myself to be a team player all the time. However, I feel very strongly about the Workers' Compensation Board and having so many workers - and I deal almost on a daily basis with Workers' Compensation and I don't think it should be deferred and I'll suffer the consequences because I'll be voting with my colleagues.

[Page 43]

MADAM CHAIRMAN: Are there any other comments? I think you might want to consider it or we'll go straight to the vote. Any further discussion? Mr. Colwell has asked for a recorded vote again, and Mr. MacMaster has also. We'll go to a recorded vote on that. As I say, I just think it is a very good subject for this committee to look at and if we could, we'll begin with Mr. Smith.

YEAS NAYS

Mr. Smith

Mr. Whynott

Mr. Gosse

Mr. MacKinnon

Mr. Preyra

Mr. Colwell

Mr. MacMaster

MADAM CHAIRMAN: I do appreciate that, sometimes a little discussion is very useful. We have one item now chosen from the Liberal caucus. We'll move along to the Progressive Conservative caucus, and I would ask Mr. MacMaster if he would like to choose one of the five items that we have on your list of outstanding items.

MR. MACMASTER: I would like to propose the Department of Justice, Correctional Services Division, with the subject being correctional facilities in the province.

MADAM CHAIRMAN: Any discussion on that item?

MR. PREYRA: I haven't seen this topic before so I'm not sure where it's coming from.

MADAM CHAIRMAN: The one thing I can say is that this list is dated April 7th. Actually the list was updated on Friday.

MRS. HENRY: It was e-mailed on April 22nd and then again on April 30th to all members.

MADAM CHAIRMAN: Thank you, so April 22nd and April 30th, this list, when it was consolidated into one page. We previously were getting three, one from each caucus, and I asked our clerk if she could put it all on one page so we could be more on top of it. The item has been there as one of the potential subjects so that we could all be prepared to discuss it today.

MR. PREYRA: Could I just get an explanation for what issues are being considered here? I mean, it's a fairly broad statement of just Correctional Services.

[Page 44]

MADAM CHAIRMAN: Certainly, that's fair. Mr. MacMaster, could you speak to that?

MR. MACMASTER: Certainly. There has been some debate in the province over the location of correctional facilities and there could be changes to that, and there could be changes to the costs involved. That's, I think, what makes bringing forward the Department of Justice, the Correctional Services Division to speak about correctional facilities - I think that it's a timely topic of discussion at this point.

MR. PREYRA: As you know, something we brought up consistently in this committee is what we're doing in this committee is looking at past expenditures and not future policy decisions. This question of the location of jails really doesn't fit into the mandate of the Public Accounts Committee at the moment.

MR. MACMASTER: I see no harm in discussing past practices of the department and why correctional facilities were located where they have been located in the past and the costs of that. I think that would be helpful for us looking into the future. It is looking at past expenditure. We have to know from where we've come to know where we're going.

MADAM CHAIRMAN: I do appreciate that, and I think Mr. Preyra's comments - if I may, as the Chair, they certainly are right. Our Public Accounts Committee does look at expenditures in the past, but certainly the section on Correctional Services is a large expenditure. We do have correctional facilities and costs and impacts on the size and location. That's part of it in the past.

So that's what you'd like to look at, really, is the management and costs associated with correctional services?

MR. MACMASTER: Correct.

MADAM CHAIRMAN: That's correct. Okay, Mr. Smith.

MR. SMITH: Madam Chairman, I'm just wanting to make sure that if this topic comes forward, we are dealing with past expenditures. My position is, I guess the last jail or correctional facility built in Nova Scotia would be the Burnside one. I don't know how many years back that is now - it's getting on. The jail in Antigonish is 70 or 80 years old; the one in Amherst is over 100 years old. Is that the kind of thing we're going to be discussing?

I would like to know in detail what we're intending to accomplish by having a full meeting, talking about jails that are 100 years old or nearly 100 years old. I don't know. What's that for? What are we hoping to achieve?

[Page 45]

[11:15 a.m.]

MADAM CHAIRMAN: What we would look at here - and I will go to Mr. MacMaster, but again, this is new for us with some new members on the committee - but generally we would take that line item, Correctional Services, look at the costs involved, whether it's the number of staff, whether they're properly trained, whether they're properly resourced, whether they have the right equipment and facilities that they're housed in. Those kinds of questions look to the value for money of what we're getting as a province and whether or not it has been well managed.

We look in the past to see whether there are ways to improve, and I'm sure our auditor would agree with this as well, that the role of the committee is to look at the best use of resources and whether it's efficient and effective. That should be the aim of the meeting. Mr. MacMaster, did you want to add to that?

MR. MACMASTER: I can appreciate the point made by the member for Antigonish. There's no question of a jail that's built 70 or 80 years ago - it's the cost of that, it's perhaps not relevant today. The operational cost of that facility is relevant, it's happening on an ongoing basis. I think it's still relevant from that perspective, and there may be other points as well. Since I'm not a regular member of the Public Accounts Committee for the Progressive Conservatives, there may be other reasons as well that I'm not able to state here today. I think for the point I just mentioned, it's still relevant.

MADAM CHAIRMAN: Okay, very good. Shall we call the question then? Would all those in favour please say aye. Oh, a recorded vote. Okay. Mr. Smith, a comment?

MR. SMITH: Were two people calling for a recorded vote?

MADAM CHAIRMAN: Yes, there were two voices. For the record, it's Mr. Colwell and Mr. MacMaster. I will begin with Mr. Smith, and this is to call the Department of Justice to discuss the correctional services division.

YEAS NAYS

Mr. Colwell Mr. Smith

Mr. MacMaster Mr. Whynott

Ms. Whalen Mr. Gosse

Mr. MacKinnon

Mr. Preyra

For: 3. Against: 5.

[Page 46]

MADAM CHAIRMAN: We will not be calling the Department of Justice at this time. Perhaps you would choose your second priority item, Mr. MacMaster, and present it to us? I'm sorry, Mr. Preyra has a point of clarification.

MR. PREYRA: I think we had talked at the last meeting about doing something from the Progressive Conservative list after the Auditor General reported. I think we were going to do something on mental health, was it not? Since we're now into June, I'm wondering if - we hadn't said no to that one, I think we had just said if we were moving into post-Auditor General's Report and since there will be something on that.

MADAM CHAIRMAN: So that would be just a suggestion from you. You're right, we did discuss it.

MR. PREYRA: Just a suggestion, too, because I didn't want him to think that we had forgotten or rejected that, it was . . .

MADAM CHAIRMAN: No and it's a compelling subject as well. Mr. MacMaster, is that your second priority?

MR. MACMASTER: I would be pleased to put that forth, especially given that the member has indicated that there's some interest there as well and provided that the time works, that report is out in time. I think we had a - perhaps, Madam Chairman, you can clarify - there was a date in June that was vacant that perhaps we could put that forth for that date. Provided the report is out by that time.

MADAM CHAIRMAN: That's right. I might ask Mr. Horgan, if we're still on schedule for the June 2nd meeting, which is the release of your Auditor General's Report?

MR. ALAN HORGAN: Yes, we are.

MADAM CHAIRMAN: Yes and that does include a chapter on mental health services?

MR. HORGAN: Yes, it does.

MADAM CHAIRMAN: So that would be very timely, it would follow. Right now June 9th is an open meeting, we have nothing scheduled on that date. That would be the week after we receive the Auditor General's Report. I'll call for the question if there's no further discussion.

The question is to call the Department of Health, Mental Health Services Division.

MR. GORDON GOSSE: Recorded vote.

[Page 47]

MADAM CHAIRMAN: Okay. Mr. Gosse and Mr. Whynott would like a recorded vote on this and I think that's very appropriate. Again, as I said, it would be to call the Mental Health Services Division, beginning with Mr. Smith.

YEAS NAYS

Mr. Smith

Mr. Whynott

Mr. Gosse

Mr. MacKinnon

Mr. Preyra

Mr. Colwell

Mr. MacMaster

Ms. D. Whalen

MADAM CHAIRMAN: We have a unanimous vote.

The motion is carried.

I think that is a very important one for June. That allows us two items that have been confirmed and I would like to turn to the NDP caucus. Mr. Preyra, perhaps you would like to put an item on the agenda.

MR. PREYRA: We would like to look at the cap on greenhouse gases and how that system is working and is being administered.

MADAM CHAIRMAN: I'm just looking to see if there's any comment on that? Any discussion at all? Mr. Colwell.

MR. COLWELL: I'm going to ask the same question to the NDP, what is the relevance to this committee?

MR. PREYRA: This is quite a large initiative on the part of the government that connects up with the plan that actually began with the Progressive Conservative Party, the whole sustainable prosperity initiative. We would like to see how that plan is unfolding, how that money is being spent, and recent government amendments to that policy. The whole green initiative is probably one of the biggest initiatives of the government, both the previous government and this one. We would like to have a look at those expenditures.

MR. COLWELL: I appreciate Mr. Preyra's comments on this. This is really an environmental issue and if they're going to talk government policy here, they just voted against that in other topics . What is the financial impact here, what has the province spent here? If we're going to find that in the past- I don't know if there's enough to talk about this

[Page 48]

financially. It's a good program, I think it's great, but I think that it should probably go to a different committee than this committee.

MR. PREYRA: I didn't say policy, I said it was an important policy, but there are significant expenditures attached to it and we wanted to see how those expenditures were being made.

MADAM CHAIRMAN: I think that what is of greatest interest to this committee would be how much has been allocated in the past. How much have we spent and whether or not it has been adequate even to achieve the aims that we have put in place. Any further comment from our members? Mr. MacMaster.

MR. MACMASTER: Would it be possible to have the Department of Energy in as well to provide their perspective at the same time?

MADAM CHAIRMAN: If the cost centre is located there, I think it would be appropriate, but we'd need to find out. Probably a good portion of the money that's allocated to see this implemented is actually in the Department of Energy. Again, this would be one of the questions we would go to Mrs. Henry and ask her to locate within government where dollars have been allocated to achieve this end, or to monitor, to enforce it, question it. Mr. Preyra.

MR. PREYRA: We would be quite happy to have the Department of Energy come in.

MADAM CHAIRMAN: Very good. So would all those in favour please say Aye. Contrary minded Nay.

The motion is carried.

I would say that is the third item that we've chosen. Mrs. Henry will try to fit those three in before the end of June. That one is an approval on the caps on greenhouse gases. All right, very good. Thank you very much.

Do we have a motion to adjourn?

MR. WHYNOTT: So moved.

MADAM CHAIRMAN: Thank you, Mr. Whynott.

We stand adjourned.

[The committee adjourned at 11:23 a.m.]