HANSARD

NOVA SCOTIA HOUSE OF ASSEMBLY

COMMITTEE

ON

PUBLIC ACCOUNTS

Wednesday, March 23, 2005

LEGISLATIVE CHAMBER

Pharmacare

Printed and Published by Nova Scotia Hansard Reporting Services

PUBLIC ACCOUNTS COMMITTEE

Mr. Graham Steele (Chairman)

Mr. James DeWolfe (Vice-Chairman)

Mr. Mark Parent

Mr. Gary Hines

Ms. Maureen MacDonald

Mr. David Wilson (Sackville-Cobequid)

Mr. Daniel Graham

Mr. David Wilson (Glace Bay)

Ms. Diana Whalen

In Attendance:

Ms. Mora Stevens

Legislative Committee Coordinator

Ms. Elaine Morash

Assistant Auditor General

WITNESSES

Department of Health

Ms. Cheryl Doiron

Deputy Minister

Dr. James Millar

Acting Associate Deputy Minister

Ms. Emily Somers

Acting Director of Pharmaceutical Services

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HALIFAX, WEDNESDAY, MARCH 23, 2005

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIRMAN

Mr. Graham Steele

VICE-CHAIRMAN

Mr. James DeWolfe

MR. JAMES DEWOLFE (Chairman): Good morning, ladies and gentlemen. I would like to call the Standing Committee on Public Accounts to order on this, the 23^rd day of March. This morning we have the pleasure of dealing with some people who are quite familiar, for the most part, to this committee, senior officials from the Department of Health concerning Pharmacare. Having said that and without further ado, I would like to introduce the members of our committee beginning with the NDP.

[The committee members introduced themselves.]

MR. CHAIRMAN: Some other members of our committee are tied up at other events early this morning and should be joining us in due course. I would now like to call on the deputy minister to introduce her staff and also, if you wish, just to lead in with opening remarks.

MS. CHERYL DOIRON: Mr. Chairman, I would like to say it is a pleasure to be here but when it starts to get to be three times in six weeks, I'm going to have to reconsider that. However, I think it is always valuable for us to come here for us as well to reflect on some of the topic areas that you ask us to present. Today we are going to be talking about our Pharmacare Program and programs and I would like to introduce Dr. Jim Millar who is the Assistant Deputy Minister in the department and to my right, Emily Somers who is the Director of our Pharmacare Program areas.

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I will give a brief statement leading into this. By way of background, I would just like to say that medications, when taken appropriately, are one of the most cost-effective health interventions available today. They can, as I am sure many of you know, prevent illness - for example, vaccinations; reduce the chance that one illness will lead to another - for example, treating high blood pressure to reduce the risk of a heart attack. Medications can reduce the symptoms of an illness and probably many of us have had that with pain medication or anti-inflammatories for arthritis and things of that nature. Medications have done quite a lot in past years now to prevent surgery. A good example of that is the killing of bacteria in the stomach that causes ulcers and, in fact, medications actually can cure illness - for example, antibiotics to cure pneumonia or other infections.

So today, drug therapy is a key component of health care in the community setting but this was not always the case. When the Canada Health Act introduced universal Medicare in the 1960s, drug therapy was actually viewed more as a component of hospital-based care than a component of community-based care. As a result, the Canada Health Act only included drug therapy provided as part of a hospital stay. While that may have been appropriate over 30 years ago, today most drug therapy takes place in the community.

Beginning in 1974, Nova Scotia introduced a number of publicly subsidized drug programs to provide medication to specific groups. Today, these programs cover Nova Scotians who receive benefits through the Department of Community Services, as well as senior citizens and individuals with certain diseases who have no other drug coverage.

Still, many Nova Scotians are not covered under government programs. Some of these Nova Scotians are covered under drug insurance through an employer, some purchase drug insurance on their own and others have no drug insurance at all. This means that there may be Nova Scotians who are unable to get the medications they need because they can't afford them. Even the Nova Scotians who have drug insurance may not have enough coverage to protect them if they find themselves in a situation where they need certain high-cost medications that are only partially covered by insurance.

The main reason for our appearance here today is related to a recent audit conducted by the Auditor General on programs within the Department of Health. The programs that were reviewed by the Auditor General included: Seniors' Pharmacare; disease-specific programs, including growth hormone deficiency, drug assistance programs for cancer patients, cystic fibrosis, diabetes insipidus; and also, the programs which address exception drug funding, including such things as anti-rejection drugs, the G-CSF in neutropenia, multiple sclerosis, epo in renal failure, antiretrovirals in HIV/AIDS, and Clozapine.

The audit focused on the fiscal years 2000-01 and the two succeeding years up to and including 2002-03. Many of the recommendations in the report are directions that we are taking already within the Department of Health and also around activity that is ongoing. We

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are actually working with many of the recommendations and had been, prior to the report being made available to us.

For example, a performance-based third party service contract for the adjudication on claims is under negotiation. That will include a long-term system development strategy for Pharmacare. We also have an electronic tracking system for the Prescription Monitoring Program under development. We are working on a task group at this time, on issues related to indicators and options to manage prices and utilization.

I'm going to very briefly give a few words of explanation around these programs that were reviewed.

Seniors' Pharmacare is a prescription drug insurance program for eligible Nova Scotia residents, 65 years of age or older. It's managed by the Department of Health and administered under a contract with Medavie Blue Cross. The program has been amended a number of times to ensure that it's fair and sustainable. In 1995, it became a premium-based insurance program and in 1999, it became payer of last resort for those with private drug insurance.

Currently, the Seniors' Pharmacare premium is $390 a year. Seniors also pay some co-payments which is about 33 per cent to a maximum of $30 per prescription and the annual co-pay maximum is currently set at $350. Those seniors in receipt of the Guaranteed Income Supplement do not pay a premium. There are also reductions made to the premiums based on family income.

Approximately 95,000 seniors enrol each year and approximate government cost, for the audited years, in 2000-01 the government cost was $75.3 million; 2001-02 that cost went to $83.1 million; and in the year 2002-03 the government costs were $88.4 million.

As mentioned, we also have disease-specific programs and exception drug funding. These programs were established to minimize the cost of drug therapy to residents who suffer from specific diseases. There are differences in what is covered, who is eligible and co-pay amounts. In total, these programs cost approximately $23 million a year.

Prescription drugs are the fastest-growing component of the Canadian public health care system, second only to hospitals in total health care expenditures. To mitigate the threat posed by the growing drug cost to the sustainability of a public health care system benefits and utilization, all of this must be carefully managed.

Costs are rising for two main reasons, increasing utilization and increasing prices, though most of the increase is actually due to utilization, which I think is not always fully appreciated. I think people tend to relate primarily to the increasing cost of drugs.

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In our province, many processes and initiatives are in place to assist with the management of drug cost. We have national and we also have Atlantic expert committees. Both the national and Atlantic expert committees exist to provide expert advice to Nova Scotia and other jurisdictions, regarding the efficacy and cost effectiveness of drugs on the market.

A rigorous evaluation is undertaken on all drugs before they are added to the benefit list. These expert committees help ensure money spent on drugs results in some additional health benefit over standard therapy. The exception status policy, that lever helps target drugs that are second in line therapies to those patients who will benefit the most. With the maximum allowable cost, a maximum cost is applied to all generic drugs to ensure seniors have access to these lower-cost alternatives as soon as they come to market. A maximum cost is applied to classes of drugs that offer the same therapeutic benefits. From a negotiation as well in regard to professional fees, the fee that we pay pharmacists to dispense drugs and to educate our clients, are part of negotiated agreements.

In 1999, Seniors' Pharmacare, as I said, became insurer of last resort, meaning that seniors with private insurance or insurance through Veterans Affairs Canada or First Nations and Inuit Health, had to access other insurers first. We also have a program called DEANS and that refers to the Drug Evaluation Alliance of Nova Scotia. This program was initiated in 1996. It examines drug utilization in the province, designs interventions to fix the problem and evaluates the outcomes.

Academic detailing has also become a very worthwhile activity that we carry out. This initiative attempts to fight the marketing of drugs by the big pharma-companies by sending educators into doctors' offices, to discuss the evidence supporting the use of specific drugs.

As well, we participate in the National Pharmaceutical Strategy. That strategy basically arose from the last FMM agreement and required that as a country, we develop a pharmaceutical strategy. The components that are under review within that work include catastrophic drug coverage, potential national drug formulary, the possibility of pursuing purchasing options that could have benefits, all the issues surrounding what often are referred to as orphan drugs or expensive drugs for rare diseases, and, also, issues surrounding safety and effectiveness with drugs. So as the auditor concluded, the Nova Scotia Government has taken measures to control drug costs and utilization but there is more that should and will be done. That ends my comments, Mr. Chairman. Thank you.

[9:15 a.m.]

MR. CHAIRMAN: We will now move into the question period, beginning with the NDP.

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The honourable member for Halifax Needham.

MS. MAUREEN MACDONALD: Well, good morning and thank you very much for being here today. This is, I think it is fair to say, a topic that is very important to many people in the province, particularly seniors but not only seniors. We have had an opportunity to meet with the Auditor General and the staff from the Auditor General's Office to talk about a number of issues and these are the things, I think, we would like to have an opportunity to talk to you about, as well as some of the recent studies which you'll be aware of, such as the study that came out from Mount Saint Vincent not so long ago, a few weeks ago.

I want to start by asking, in terms of the Auditor General's Report, the Auditor General has made recommendations. They've recommended - for example, you talk about the Pharmacare Program but you talk about disease-specific programs. They've told us that there are a number of different components of drug programs in the province and they need to be consolidated into an overriding governance structure with a good business plan, good ways to assess the effectiveness to do the evaluations, to look at how we can maximize what we get for our dollar, really.

I want to start by asking about the internal organization inside the department that will deal with implementing and responding to the Auditor General's recommendations. What is the internal organization that you have in place, how will that work and is it adequate to deal with a part of the health care budget, that as you say, is a large and growing part, that we really need to have good monitoring of and good control over?

MS. DOIRON: I will start, maybe, with the response and potentially hand off to some of my colleagues here. First of all, from the organizational perspective within the department, we do, as you probably know, have a dedicated program area. That program area reports to the assistant deputy. When we put together the business plan for the Department of Health - and, of course, within that we look at the government goals for the coming year or several years, whichever they may lay out to be - we correspondingly develop our priorities and strategic directions that are consistent with the mission and vision that we've developed for the Department of Health.

Those kinds of guides for us, the mission vision statements are basically developed from the ground up so they're not things that are necessarily just decided and posed by the senior people in the department. So we engage our staff at all levels in that which means, when you come back into the Pharmacare area, that the staff of the Pharmacare area - not many of them but those who are there - engage in that process. It becomes part of a bigger plan, if you like. There are also, then, within that program area, strategic directions, initiatives and so on that become part of the follow-up then and get kind of written into our overall plan. There is a structure that engages these kinds of initiatives and the program development follow-ups. I think that we have now developed within the Department of

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Health a pretty good structure and process to allow these things to flow through the organization.

We have also been working much more diligently in the last couple of years to put - we've got an equality/patient safety/medical error committee of the department that also extends out into participation with third parties, other stakeholders who need to be at the table. That means that we are working closely with the districts, we are working with the pharmacies, we are working with other stakeholders such as the Department of Community Services. As mentioned, we do try to bring all those elements and components together so that we can understand what is happening across the whole continuum of drug therapy.

One of the areas, though - and I'll make a brief statement about this and maybe ask Emily if she would like to elaborate a bit more - but one of the areas I think that you would, again, be aware of, based not only on Pharmacare but many other aspects of health care, is the direction that we have all been taking over the last several years to try to move more toward looking at the outcomes of the actions, programs, whatever, that are being taken or delivered.

While I think that we have done certain kinds of monitoring - and maybe Emily can speak to that a bit - we are also in the process and actually have work groups that are participating at the national level, but also at our local level, in terms of saying, what are the kind of indicators that are going to tell us if we are actually getting value-added from what we're doing with drugs. That's just a broad statement but it does spell a bit of a context. Maybe, if I may, I will pass it to Emily and see if she would like to add a bit.

MS. EMILY SOMERS: Okay. The three biggest issues facing drug programs here and across the country are access, affordability and sustainability. Really, the issues are so large that we have had to move the discussions related to these to the national level. So all of the issues under the national pharmaceutical strategy are beginning to address these. We have placed people on each of those so that we do expect that we can find some solutions, nationally, that we probably could not find, provincially.

As far as determining whether or not what we are doing is successful, we have a number of different ways that we are doing that. First of all, we do listen to seniors. You had mentioned - we hear from seniors every day. We are also kind of in tune with reports that you have just mentioned - the one that is coming from the Mount - what are seniors saying about the Seniors' Pharmacare Program. We try to keep in tune with people in that way.

We are constantly comparing our performance with other provinces. What are they seeing in terms of enrolment, in terms of increases in drug costs? They are not perfect indicators at all but they do give us some idea of how we are performing against other provinces.

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We are also working on some official indicators. It's a difficult thing to figure out. What exactly will tell us if our drug plan is a success, or not? Is it the cost? Probably not. Is it the list of drugs we cover? Probably not. It's probably things like the health of our population, so we have to start looking way down the road at drugs as a part of the health care system and not just separate them out as we are sometimes inclined to do.

We are doing some work nationally on things like, can we identify within our population the number of people with diabetes and are they on the proper drugs as opposed to how many dollars are we spending on this program? So there is some fairly exciting work going on now related to indicators and how do we tell if our Pharmacare Programs are being successful or not?

MS. MAUREEN MACDONALD: I think one of the issues that always comes up in the recent research in Nova Scotia is the whole question of compliance and whether or not, for example, seniors who are prescribed medications are taking their medications according to the way they have been prescribed. Sometimes seniors ration their medication, they cut back on the amount of medication they take, or they just don't take it at all, they don't have prescriptions filled. Certainly, as an MLA in a constituency, I get calls from people, family members, seniors or even sometimes a treating physician about individuals who are in the Pharmacare Program but who are not accessing drugs in the way that they've been prescribed by the family doctor. This is certainly a concern.

The research in this province from a few years ago - and you would be familiar with this - George Kephart and the folks over at Dalhousie. One of the things that they talk about and they cautioned government is in the use of co-pay, the balance between having co-pays that become a deterrent, particularly to people of low income who often are the very people who have the highest drug needs. I'm looking at the Auditor General's Report and there's a graph in his report that shows, in fact, the co-pay component of what seniors pay for our Pharmacare Program here, which is 6 per cent more than the premium portion of what seniors pay.

I have a question around the monitoring, the research and your capacity to monitor and do research around the affordability of drugs and what the implications are as the co-pay creeps up for seniors. We need to remember that even seniors who have been exempted from the premiums because they have low incomes, because they're on the Guaranteed Income Supplement or whatever, still face co-pay. This is certainly a concern to many seniors and to us as well.

MS. SOMERS: We are trying to find real answers to real policy issues that we're facing and the province did throw some money at that study you referred to, it was given to them arms' length, but we were trying to figure out what does happen when we make changes to the variables within the program.

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First of all, the study was very focused, it was on one class of drugs but if you look at the detail of that study, it actually gave us an interesting bit of information. The people who were affected by co-pay were those low-income seniors with low drug use. The likelihood that they would exceed their maximum co-pay was low. If you broke that out and looked at the low-income seniors with high drug use, who did expect to exceed their co-pay maximums, there was no change in utilization in that group.

So the message we took from that was, first of all, if we're going to be making changes to the co-pay arrangements, we do need to focus on premiums and there is something about a senior thinking about will they max out their co-pays when they are using the program. It gave us some information about we need to be putting maximum amounts on our co-pay amounts because that does not seem to affect utilization as much as just leaving these amounts open. Last year what we did was we put a max on the co-pay per prescription and that should have less of an effect on utilization than when the co-pay maximum was left alone, so that was a very interesting bit of information.

We're always trying to balance affordability and sustainability and I don't think anyone yet knows what that program looks like. We're all trying to figure out where is that line where we will promote appropriate use and try to minimize inappropriate use. I don't think we know yet what the program looks like, but we're trying to gather information so that we can continually adjust our programs so that they don't have those negative effects that can occur when you do start changing programs.

MR. CHAIRMAN: Ms. Doiron.

MS. DOIRON: I just would like to add at this point the very valuable resource that we have in this province through the chair that we have at the university in Ingrid Sketris, being one of the chairmen for the Canadian Health Services Research Foundation. Because we have that chair for pharmacology in this province and because we have an excellent relationship with the university and with her in particular, and the people working around her, we've been trying to take advantage - as she has - of bringing people to research and to work that can actually inform our public policy. The way that that happens is that I have been on the steering advisory committee for that chair, so we have a direct link at that level and we also have, through our Pharmacare Program, representation there as well.

[9:30 a.m.]

Basically we take students from that program into the department to work on various issues and often they are issues that can actually speak to some of the kind of questioning that you just brought forward, others as well. It's very interesting and I think it has become of real interest to the research institute and to others across the country, the extent to which we've been working with that opportunity - not all due to our credit but certainly due to the credit of Ingrid and her group and the adversity - to really interface in a way that can become

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meaningful, and to provide an opportunity for very meaningful, on-the-ground, applied kind of research.

We've also had one or two of our staff go off for a secondment period to work within that program at the university level. I mention that because I think it's a great attribute to this province and I know they are just going through the renewal process to see if that will be continued and, of course, we have supported it very much. I think we can continue with that additional resource to augment what we can do directly in the department and to leverage some of the potential to kind of look at the questions.

MS. MAUREEN MACDONALD: I noted in the Auditor General's Report that Atlantic Blue Cross is the manager of the program and that the contract is currently being renewed. I had a question about why there is no tendering process for a manager for that program. Why is it just automatically assumed that because Atlantic Blue Cross has been doing this in the past they will continue to do this?

MS. DOIRON: I will just say very briefly and then hand this one over to Dr. Jim Millar, who has been directly at the table for all the negotiations going on there. We went through a rather in-depth process to determine the best approach to going down the road to seek a more performance-based kind of contract with now, ABCC.

As you know, the former Atlantic Blue Cross and whatever had been doing the things for us around managing the MSI payments, also the Pharmacare issues, the Health card, a whole number of program areas, millions of transactions every year. So there is a whole history there in terms of their background, knowledge, relationships and so on. However, we did not just assume that, we actually brought external advice to the department to do a thorough assessment about how we would best position the province, to kind of go into a future relationship and a performance-based approach, which we would prefer to see.

The previous contract has been really a four-page document that stood for years and years, really didn't spell out much of anything. We spent some considerable time trying to say, what is it we want from any company, but prior to that saying, do we simply put this to open market and what are the pros and cons of doing this, so there was actually a process designed to do that. We also have a document that speaks to that issue in question and certainly, we'd be happy to share it if you would like to take a look at it. Maybe with that, I will ask Dr. Jim Millar if he could just expand a bit more.

MR. CHAIRMAN: Dr. Millar.

DR. JAMES MILLAR: As Cheryl has said, we have had a long-standing contract with Atlantic Blue Cross and its predecessor, Maritime Medical Care. We have known for some time that the contract has not been a good one, it has served its purpose over the years, but we felt there should be a better way of doing it.

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The department hired Deloitte & Touche to do a review of contracting practices around the country and to make a recommendation on the type of contract we should go with. Their recommendation was a performance-based contract, where service levels are set, there are consequences for not meeting those service levels, and there are incentives for savings in program development. At the same time, in our previous contract the Department of Health owned the hardware and the software for the program and it was getting extremely outdated and has little functionality left to be able to expand to new ways of doing business.

As part of the contract with Deloitte & Touche we asked them to make recommendations on how we should proceed, should it be going to full RFP and tender, should it be sole-sourcing, what were their recommendations. They did a cost-benefit analysis in looking at the length of the relationship, trying to determine what the cost would be if we went with a totally new vendor, having to bring them up to speed on our programs, having them develop new software programs, having them work with Atlantic Blue Cross to get our old data over and that sort of thing. Their recommendation back to government was that the best option at this point from a cost-benefit analysis was to attempt to negotiate a sole-sourced, performance-based contract with Atlantic Blue Cross and that is what we're in the process of now.

MR. CHAIRMAN: Thank you, Doctor. That ends the time period for the NDP. We will come back to you later.

I now recognize the other Dave Wilson, this time the member for Glace Bay.

MR. DAVID WILSON (Glace Bay): Thank you very much, Mr. Chairman. Good morning, everyone. Thanks for dropping by, Deputy. It's always a pleasure to see you. This is a subject near and dear, I think, to everyone's heart because eventually we all get there, don't we? We all become seniors and we all wonder about what's going to be left at the end of the day to take care of us.

I have a number of questions that I would like to ask you on a number of issues. Primarily though, I was extremely interested in the comments that were made by Ms. Morash concerning seniors and what input they have into the whole Pharmacare Program. You said that you do hear from seniors time and time again and they do tell you things but, in particular, I'm interested in a direct role. What direct role do seniors play in putting together a Pharmacare Program and determining how that program is run? Is there a direct role that they play?

MS. DOIRON: I'll start. We basically, at this point, have a very strong, ongoing relationship with the Senior Citizens' Secretariat. Through the secretariat, we actually dialogue on a regular basis. It's not like once or twice a year. It's a regular dialogue, on a number of program or topic areas, particularly ones that are of much interest to seniors. They bring people to the table, seniors from various parts of the province, representing various

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organizations, sometimes, but a group of stakeholders that come to the table. We are, I would say, totally accessible to them inasmuch as we kind of have regular meetings to talk about Pharmacare, to talk about long-term care, to talk about other continuing care programs and so on.

We also, prior to any policy change or shift, seek input from people through the Senior Citizens' Secretariat, primarily - sometimes go beyond that - but it's a fairly representative way for us to get input to policy. That clearly happens on an annual basis, relative to any adjustments that would be made to the Pharmacare Program.

Over the last few years, with the recommendations that they brought forward, that gets very clear, high-level review and very specific consideration by both the department - myself and staff from the department - but also then with what we take forward and clearly represent to our decision makers, relative to where the seniors' advice has been in any change that we may be looking at.

Certainly, the issues in the last years - like, for example, last year, putting a cap on the co-payment up to $30 per prescription, was a recommendation from that group. The recommendations came forward this year, were approved by government, so that we so far have been able to be pretty consistent in recognizing their input.

When we have issues that are more complicated, as we often do, then we actually set up opportunities to dialogue on an ongoing basis or set up work groups to address particular issues. That's one avenue through which we have very clear and intentional ways of connecting with seniors. Maybe, Emily, you might want to say a couple more words to that.

MR. CHAIRMAN: Thank you. Ms. Somers.

MS. SOMERS: So on a local level, we do consult with seniors through the Senior Citizens' Secretariat. One area where there is a bit of a weakness is consulting with seniors around what drugs should be on our benefit list. They feel that they have no input into that and, at this time, they don't. We rely on expert committees to advise us. However, there is ongoing discussion right now into how we bring seniors and the public meaningfully into those decisions. At the national level, the Canadian Expert Drug Advisory Committee is talking now about how we bring that into the current decision making. It is a weakness. We're not sure how to do it yet, but we are trying to look at the various options and see how seniors and other public could be brought into that mix.

MR. DAVID WILSON (Glace Bay): You're sort of stealing my thunder but that's okay. (Laughter) I can admire that because what I was going to say is that the Mount Saint Vincent study has been mentioned here and included in the recommendations of that study were that there be greater senior representation, for instance, on the Pharmacare advisory group and representation on the committee that makes decisions about the drugs that are

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covered by Pharmacare. So, in other words, what seniors are telling us, anyway, is that unless they're seated directly at the table, they don't have the proper input into making those decisions. Do you agree?

MS. DOIRON: I think we are in agreement with that. I think it's consistent with the approaches we take in most areas now, relative to having stakeholders, members of the public, sit at tables with us in many ways. I think that in this regard it would be very valuable, maybe for the seniors but, certainly, I think, also, for us as people who make decisions or recommend decisions to have that kind of input available.

We are very new at the national level with having the Canadian drug review process, which is more expert-based, but I think the spirit and the open-mindedness is there, both in this province and across other provinces. When I participate with other deputies and so on, to say, yes, to have meaningful consumer participation is a principle that we agree with.

MR. DAVID WILSON (Glace Bay): Well, let me ask you then, Deputy, how close are we to actually seeing that happen?

MS. DOIRON: I don't know, specifically, the answer to that. I think given that the Canadian drug review process has not yet been up and running for a year, that the likelihood is that there will be some review within the next year or so that will be influencing that.

The other place that I think we can make that kind of representation - it probably will be discussed, maybe it already is - is through the groups that I've mentioned. The pharmaceutical strategy that's currently in development that has five components, we have working committees and all Nova Scotia has representatives in each of those groups. I think, through that strategy, it is a very appropriate place for issues like that to come up.

The deputies and the ministers in the country are looking for that strategy to be turned around on a basis where we can start to get some feedback within the next year or less. I think, within those kind of time frames, we can look at some strategic decisions that would potentially speak to this one you're bringing up today.

MR. DAVID WILSON (Glace Bay): The problems that seniors are experiencing - and, again, referring to the Mount Saint Vincent study - with taking their prescriptions properly, cost comes into effect and a lot of other factors. Let me take a time period - let's go back, let's say, six years. Let's go back to 1999 which I will use because that's when this current government came into power, in 1999. The Pharmacare Program, in general, since that time, since 1999, a senior couple in this province is now paying approximately $652 a year for Pharmacare.

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Do you not find that a large part of the problem is that seniors are now forced to make that choice in some instances - and I'm sure some of my colleagues have had first-hand knowledge - not first-hand, but people walking in and telling them that seniors in this province are making choices between food and medicine, health and no medicine whatsoever, because of the cost of drugs. Even a co-pay, as little as it may seem to us or anyone else, $3 on a fixed income to a senior is a huge obstacle to overcome.

[9:45 a.m.]

What I'd like to know - and with all of the estimates and all of the forecasts that are there - where do you see Pharmacare going in the next year or two? Can seniors in this province look forward to any kind of a break? I know the government right now has said that there's not going to be an increase this year, but I think, unless you and I don't know anything about what we're talking about, I would expect there would be an increase down the road. I think that's a fair comment. So where do you expect Pharmacare, as a program, to end up over the next two years?

MS. DOIRON: Wow. I think the country would love me to answer that question. In terms of where we are, it is clearly a challenge. It's fine for us to say that originally when the Pharmacare Program started up for seniors that it was kind of envisioned to be like a 50/50 type program. We have been more 75/25, around that scope. This year because of the fact that we're not adding anything to the premiums or the co-pays, I think I'm right in saying that if we go up to something like 78 per cent provided by government, a huge cost one way or another that the individuals who need the drugs obviously are still getting impacted.

As we pointed out in some of our earlier comments, the drug costs escalate so much and because of the capabilities through, I guess, what we'll call pharmaceutical technology and the growth of that, we have seniors who need or could benefit from more and more of the drugs which are a pretty non-invasive way of trying to deal with a whole lot of disease issues. Saying that, I think this year our costs in the drug program in this province went up by about 13 per cent and I was surprised myself to find that only 3 per cent of that was the growth in the drug cost, 10 per cent of it was growth and utilization. So both growth in the numbers of seniors that are needing to be in the program, the growing rates of that population anyway, as well as the growth in the utilization of what is being prescribed for individuals.

I acknowledge that for some seniors, the co-pays and the premiums are a real challenge. We are very concerned, particularly about those individuals who may feel that they have to make choices in regard to food or other things. We also understand that there's another whole group out there who aren't seniors, but who are people who are kind of entering into maybe middle age, who get into areas of illness or disease that could be significantly positively impacted by medication, who can't afford it either and have no insurance. We estimate that the non-insured or the under-insured in this province are

[Page 15]

somewhere in the category of 20 per cent to 22 per cent of our population, so there are very real challenges here.

We are in dialogue in our own province, we are at tables across the country, looking at where should this go? There has been discussion through the reports that came out with Romanow and Kirby, this was a big issue, very different approaches to saying this catastrophic or what we'd prefer almost to refer to as universal drug coverage, so that everybody is covered to some extent, that universal drug coverage should be a concept that we are working toward.

We know - and we've done work behind this to know - in our province, if you start to use an income-adjusted approach and all of that, numbers of singles or family members, whatever, you could go anywhere, if we were to put in universal coverage in this province from maybe somewhere around $50 million to $100 million, depending on how you decided to define the program. So there are lots of issues that are there. I think that the initiative that's going on right now at the national level, in terms of developing a pharmaceutical strategy for the country, may help us to define some of the directions that we will want to take, and that will be good, I think that will be helpful for us to decide then, what position in Nova Scotia we will take. We know that there are various forms of universal coverage across this country and again, in Atlantic Canada, it's the area of the country where none of the provinces have universal coverage, so we have many issues.

The other thing that I'll just add - and then I'll stop because I know it's your time, not so much mine - what we find very concerning is trying to find the right balance here, as Emily said, so that you can kind of provide some appropriate kind of resource assistance, access and ability to access, balanced against what are we doing to cost, to taxpayers, that whole arena where you look for that balance.

The whole concept of sustainability of the health care system in general, and then if you bring it back to medications, with all the growths and costs that are real, I look at that every year when we're engaged in our business planning and say, even if we manage as well as we can, even if we build in and continue to develop all kinds of accountabilities, which we're doing and working on, even if we are able to kind of get to the point where we have really good indicators of outcomes and things that help us to make the right decisions, we are still in a province where with less than 1 million people and many less taxpayers, we have to add at least $200 million a year to the budget every year just to stay with what we're doing, never mind adding anything more.

In answer to your question, specifically, would we like to provide more, would we like to relive more of the pressure, would we like to find a way to improve the access and help people not to have to make those very difficult choices? We would like to do that for seniors, we'd also like to do it for the rest of the population, who may be walking out of a doctor's office and throwing the prescription in the wastepaper basket on the way out. So we

[Page 16]

have a struggle and we have, I think it's fair to say, all of our own leaders in this province at a political or staff level and we have a combined interest - passion if you like - of ministers and deputies across this country to keep working on these issues, to see if we can continue to improve the situation.

MR. CHAIRMAN: Dr. Millar, you had a comment.

DR. MILLAR: I would like to add a brief comment about one of the barriers for seniors, especially those who are taking more than one medication, is that they end up paying a lot of co-pay up front and then don't pay anything the rest of the year. Seniors have come to us and asked, is there some way to be able to pay $30 a month until we get to the maximum, rather than paying it all up front? Because of our antiquated premium billing system we haven't been able to do that.

With the new system we will be getting, if we're successful in negotiating the contract with Medavie we will be able to do that and they will be able to spread those payments out so they won't have to come up with $120 in the first month, they can spread it out. It's a small thing but it's something they have been asking for and something we hope to be delivering on within the year.

MR. CHAIRMAN: Ms. Somers.

MS. SOMERS: Just to add to that, because you've been talking about the Mount study, if you look at the details of that study the main reason that seniors are non-compliant, they found was side effects. The second reason was because they found the medications were not effective or their condition had improved. Actually, the third reason they stated was the cost of a prescription. So we sometimes get conflicting information as to why exactly is a senior non-compliant, we're always trying to shuffle through the various reasons that they're telling us.

MR. CHAIRMAN: There's about a minute and a half left for a short snapper, Mr. Wilson.

MR. DAVID WILSON (Glace Bay): It's short. Let me reply to that. Most of the complaints - if you want to call them complaints - that I would hear from seniors, the number one issue would be cost. For the most part I would think that seniors tend to trust what they're told by their doctors or their pharmacists about how medication works. I don't know if they make those decisions too much on their own, cost is the number one reason I have heard. I don't know, when was the last time the department did a full-scale review of the co-pays? Has one been done in the last three years, the last five years?

MR. CHAIRMAN: Ms. Somers.

[Page 17]

MS. SOMERS: I'm sorry, what do you mean by review of the co-pay?

MR. DAVID WILSON (Glace Bay): If you're looking and saying that you have identified some areas, as Dr. Millar stated, that perhaps with the new system that could be done. Has there been a review of the co-pay system over the last three to five years, has anyone taken a look to say, how can we make this easier on seniors, how can we make it better?

MS. SOMERS: We actually have that conversation every year with seniors themselves, that's a big part of the consultation that we go through each year. There is an acceptance that there needs to be some kind of cost-sharing arrangement. Even with the seniors there is an agreement that they probably need to be paying some portion of this, the exact amount we're not sure, but we talk to the seniors regularly about if we need to increase the cost-sharing arrangement or what's the most pain for seniors when we do start looking at those. They have told us clearly, do not touch the co-payment and we haven't touched the co-payment. They are saying, touch the premium, the premium doesn't affect the low-income seniors as much whereas the co-payment does and the premium doesn't seem to have the same effect on utilization as the co-payment does. We're trying to back away from changes to the co-payment and focusing on the premium, but always in consultation with the seniors.

MR. CHAIRMAN: We will now turn to the PC caucus.

The honourable member for Kings North.

MR. MARK PARENT: In your introduction, Ms. Doiron, you talked about some of the wider issues of drug use. Perhaps I will start my questions with those and then come to the more specific issue of Seniors' Pharmacare. This is an issue that has been mentioned by several MLAs and I think you, yourself, recognize that it is one that is a very difficult issue to struggle with.

I have many people who come to me who are not necessarily seniors but who don't have a drug plan, are not on community services, are on low incomes. When people say to me, we mustn't have a two-tier level health care system I agree, but I think in some sense for some people, we already do have a two-tier level health care system if they need to take a very expensive drug.

I struggle with every individual case, sometimes we have received help from your department in negotiating with the drug companies, where they have taken this person on as a charity case. We send people here to Halifax to get drugs where the dispensing costs are kept down. Service clubs help out, but it's something that I'm glad to hear that you see as a key issue - not just Seniors' Pharmacare but Pharmacare for those on low incomes. For those who are making minimum wage or slightly higher, to be faced with drug costs which could be $400 a month for some of the drugs, it is just phenomenal.

[Page 18]

You have had talks with your colleagues across Canada, what models of coverage are out there? I know Alberta has one specific model. What models of coverage beyond the seniors' coverage are there for people?

MS. DOIRON: There is some variation in the models across the country and on a detailed basis, Emily could probably bring us up to date more with that than I can. One of the things that we are attempting to do now is to try to see if there are some common approaches to that that can be looked at across the country, that might make that more consistent.

In all of the other provinces, there is at least some form - aside from Atlantic Canada - of a program where people of any age that need access to a drug at least will have the opportunity to get that. Again, they're not perfect programs so when you get into situations with very expensive drugs, that's where it seems to break down across the whole country.

As we mentioned, I think the term people often use is "orphan drugs" or essentially what we're seeing more and more of coming down into the market are these drugs that treat rare diseases but they're very expensive drugs. If we know that we have some of them out there now and we know that there are more coming, and if it's almost impossible for anybody to actually cover them, and we have a couple right now that are out. There are drugs to treat Gaucher disease and we only have two or three people in the province with that disease but to treat one person for a year is $0.5 million. Then you get to Fabry's disease, which is the current one that's under a lot of debate at the moment and still no real conclusion about where we go at the end of these drug trials which are imminent. We have almost $300,000 a year per person, if we are to provide that medication.

[10:00 a.m.]

There are several factors that become engaged in that as well, when they are rare diseases, to try to get the kind of scientific evidence that the scientific advisors are comfortable to tell us that they agree with the drug being provided or not is an issue. There's not often a large enough population to get the level of confidence that they feel they need to have. We're into that with some of these drugs right now.

Do we pay attention to that and say, that's the basis on which we have to make a call on this? Is there something else that we go to to say, is there a different level of evidence? Are there markers such as changes or improvements or at least plateaus of certain kinds of symptoms that can be recorded? Do we, as a province or as a country, say there needs to be not just a different level of evidence but there needs to be a different level of compassion? Is that a reasonable approach to making a decision around some of these issues for people?

The dilemma also, I think, we get into in our own department, let alone across the country with some of those situations, is what's the right choice? How do you make the right and appropriate ethical choice in relation to this? If you look at the individual or the small

[Page 19]

population with the rare diseases, you will likely want to go to saying we would like to provide it. If it makes them feel better, if there's some demonstration that it can have some effectiveness, we would like to provide it.

But if, for example, with Fabry's, right now if we were to pick up that cost, it would start - and it will go higher - for this province it is something like $10 million to pick up that one. Then we will sit there and say, what does that mean relative to, say we have 30 or 40 people who would be treated for that $10 million? What if we were to say, instead we're going to put $10 million into making sure that all diabetics had access to their testing requirements, their needles, their medication, whatever, and we have hundreds of those people. Is that a better use of that money, or can we just say yes to it all? That would be great but we're probably not going to be there. Those are the kind of debates that we go through.

One of the approaches to that - that could be applied to anything, I guess, but this is basically what motivated it - is we have in the department a number of lenses we use when we're trying to make decisions. Often, when we're sitting there as a senior team of the department and in order to develop things and recommendations or options that we would take forward to our minister and our decision makers, we will have things like population health approach. What are the questions that we have to ask if we're going to be consistent with a population health approach? That is the philosophy that we have adopted.

We have on our walls principles of ethical decision making that we've decided on, but what we don't have is a well-developed, solid ethical framework for decision making. Now, there are lots of ethical frameworks out there but to say that we've taken a look at that, we've done the work to say, this is the framework that we're going to use in the Department of Health in Nova Scotia, is a project we are currently working on. I'm hoping that as we get that more developed, that without looking at a question such as this one, particularly with the rare diseases, that we can have a framework that we agree is the right perspective and that we can educate ourselves and we can educate maybe the public about this is one of the things we do to try to make decisions, so that you can explain that and you can use that and hopefully, maybe our decision makers might like to use it. That would allow them to say, well, with all the hard choices we have to make, at least it's founded in things that are not only scientific and appropriate, it is also founded on something that is rooted in ethical perspectives.

So all of that is going on and at this point in time we are struggling as a country with how to deal with the high cost of drugs for these rare diseases and, again, Emily and her staff are sitting at the tables, like right now, trying to say what is the appropriate kind of strategy or approach for the country to review that in. That work is going on and will come back to the ministers and the deputies probably within a few months or so, I guess, for us to start debating it.

[Page 20]

MR. PARENT: You mentioned the formulary and which items are put on the formulary and it was brought up with seniors participating in that and you are looking at that, I'm glad to hear that. Perhaps one of the models that could be used beyond the seniors is if, say, the medication is to treat cancer that someone from the Cancer Society would sit on the discussions of that. There are ways of getting that input and I think that that is valuable although one wants to use expert input to make decisions in terms of the efficacy of drugs and the use of drugs. I think that public input is always necessary and just in the political process. You are the experts in terms of medical care here in the province. We are not experts as politicians and yet together we create some sort of accountability and hopefully a better system. So I'm glad to hear that is going on.

I want to ask you specifically about a case that I had - and I'm getting to the seniors, but it's such a big issue, the drug coverage. Vaccine coverage; I wrote a letter to the minister and it probably came across your desk but Health Canada recommended that the specific vaccine for children, I think it was for staphylococcal disease, be given to all children aged zero to two. When we introduced the program, we introduced it at a certain fixed date for all those born at that date. How do we make those decisions and are they particularly acute in regard to vaccines? Is it something different about vaccines or how do we make those decisions? Are they cost decisions or what are the parameters around which we make that decision?

MS. DOIRON: Basically, I think that there is always a question around the introduction of something as to whether you make it retroactive or totally include the population that could potentially be included or not. There's a whole variety, I think, of information that comes to us with that that does include cost but it also includes factors that address questions of risk and things of that nature. So the combination of the advice that we would get coming through not only the Pharmacare Program in that case but from our medical officers of health, the public health side of our system, basically comes with those recommendations and usually the way they come forward is with a presentation to the senior leadership team of the department that tends to do that work so that they are vetted and we can kind of say well, in balancing risk against cost, against something else, then that's sort of how we approach it but more specifically to kind of address the particular issue that you are referring to, I'm going to ask Emily if she would expand a bit more on it.

MS. SOMERS: Unfortunately, I can't address vaccines specifically because within the Pharmacare Program they are all dealt with under public health but I can tell you, if you are interested, in how we would make those kinds of decisions under Pharmacare when it comes to drugs, the way we review drugs and why we might focus on a certain age group or certain criteria, if that would be helpful.

MR. PARENT: Maybe I will ask my question of public health but it was an issue that came to me and I had the opportunity to ask it. This raises a whole bunch of questions in my mind in terms of do we have models that will help us balance out, because one of the

[Page 21]

arguments in terms of this vaccine that the couple made to me is this will save children from being in the hospital - an acute bed is $900, or more than that - therefore it will end up saving the province more to cover all children up to age two, rather than just introducing it at point A. I don't have the answer to that because I don't have models. It's the same thing with seniors, I would say. If we can increase the coverage for seniors and the compliance and all those things, does it save us money in terms of seniors ending up in acute care beds in our hospitals? Do we have those models? Can we make those sort of predictions about cost savings or is that still in its infancy?

MS. DOIRON: Yes, we do have ways of looking at that and, as I mentioned, based on the availability of dollars to support some of these programs, sometimes there then is an overlay of a question, what is the impact if we don't include the entire population? We do have good tracking models. We would like to computerize it and that's a process that we are working on now but there has been good recorded information about any of the diseases that would be associated with these kinds of vaccines and the reportability requirements do allow us to kind of understand the incidents. So those kinds of factors are taken into consideration when the medical officer of health comes to us and says here is the recommendation that I'm making and this is why. Then he is including things that they can go back in, find the information and the data to look at incidents in any particular age category or whatever. So that kind of thing is taken into consideration.

What I might also suggest, because I don't have all the specific detail against the vaccine that you are referring to, which I certainly recall the dialogue around but we do have some things in writing about that and a copy of the presentation that was made to our senior leadership that spells out some of these issues and I would like to suggest that we make that available to the chairman so that you could take a look at that and if you have more specific questions then please come back and we can talk with the medical officer of health as well.

MR. PARENT: Thank you, I appreciate that. I would like to see that because sometimes I get the feeling that because we have to chase after all the acute cases, we can't put the money into preventive care that would then save us dollars in the long run because we don't have the money there. I know there is the frustration here. Another case, another example of this whole thing is in terms of home care. It would be easier if we can move people out of our hospitals, it would be cheaper, into home care and yet the moment they move out of the hospital setting, the drugs which are covered in the hospital aren't covered in home care. So I know many times staff in Valley Regional, for example, which is a hospital I know well, will keep them as long as they can because the drug coverage is there for them knowing that if they release them into home care that the drug coverage isn't there to the same extent.

MS. DOIRON: You are absolutely right. We are very aware that there are changes that could and probably should be made to the Home Care Program to expand it, to expand the coverage for medications within it, to expand the amount of time that it is available to

[Page 22]

people perhaps coming home from a hospital and so on. It is a more cost-effective way and certainly I think it is a way that is better for the individuals or family in their community to be able to have them return to their home to be able to continue their recuperation when that is necessary.

Having said that, what usually occurs if, in fact, we get people into the right setting with the right services for doing what is best for them, we do not save money and the reason we don't is because there is enough pressure on the beds in our facilities that they don't sit there idle. So we might actually serve the population better by getting people in the bed who need to be there more. In fact, sometimes it costs more because the more we can keep those beds filled with the most acutely ill people, the more the health care costs are around those people utilizing the beds and yet we are then also extending services over here in order to enable that. That still means that we should do it and we are going down the road to change some of those policies.

MR. PARENT: Just a comment. I find it very commendable, when the Pharmacare Program was introduced, it was 50/50 and now we are up to what, 78 per cent on the government and that in a time when the population is aging and there is more call upon the use, so I do want to commend you. Certainly I know, just from your answers, that you're wrestling not just with your head but also with your heart on how best to serve. Maybe I'll have a chance to come to, specifically, the Pharmacare later, but thank you for your answers.

[10:15 a.m.]

MR. CHAIRMAN: Thank you. We will now turn to the other Dave Wilson, NDP caucus, for a 10-minute questioning period.

The honourable member for Sackville-Cobequid.

MR. DAVID WILSON (Sackville-Cobequid): Thank you, Mr. Chairman. I, again, thank you for coming today and discussing, I think, a very important issue. Definitely, I have dealt with a lot of seniors in my community and I'm sure members of the committee here have done the same over the last several years. I would have to agree with the comment the deputy minister said during her opening statement about drug therapy and how important of a component it is to treat illnesses in the province.

In my former profession as a paramedic I have witnessed, first-hand, the great effect that medication has on a person fighting illness. I have also witnessed the negative effects, the adverse effects of medications, about mixing medications, over-taking medications. It's amazing to see the seniors - when you do go and try to assess what's happening that day, if they're calling you to, hopefully, seek some assistance - the lack of knowledge they have or education about the medications they take. You ask a patient why they're on a certain medication and they say it's for their heart, their stomach, or things like that. I think it's

[Page 23]

important that we realize that education has to emphasize, especially when we're dealing with seniors with medication.

I want to talk a little bit about one of the recommendations from the Auditor General, around the Department of Health seeking legislation to collect and analyze drug information for all residents, especially pertaining to pharmacists, nurse practitioners and physicians. I know the government recently is moving towards providing assistance for hospitals but as the study from Mount Saint Vincent indicated, most seniors interact, I think, best with their pharmacist. These people are well-educated individuals and an important part of the health care system in the province.

We'd be fooling ourselves if we think that a senior goes to one pharmacist. I have witnessed, myself, when I have asked to see a senior's medication on a call and realize there are different labels on there: Shoppers, Lawtons and now, especially, you notice the availability of pharmaceutical products in our shopping centres, Sobeys, Superstore and things like that. So I think this would be an important avenue to look at.

I'm just wondering, are you taking this recommendation from the Auditor General seriously? I think if you address the issue of medication and what patients are on, the availability to interact with the pharmacists and the different companies, I think it would benefit the seniors and especially reducing costs to the Pharmacare Program.

MR. CHAIRMAN: Ms. Doiron.

MS. DOIRON: Thank you, very good observations, I would say. We have activity going on, I think, on several fronts that start to speak to this with a lot more required. What I'm referring to is, first of all, some education programs that are directed specifically to helping seniors to manage their medications and target groups in local communities. I forget the name of the program. There is a name to it. That has been employed in a number of areas around the province. It's programming that can be accomplished without a tremendous amount of investment and, often, actually, will be carried out with professionals kind of engaging with even community volunteer groups to make sure that the access to that kind of education is filtering through the population and the community. So a lot more of that I think can be accomplished.

Secondly, I think the whole perspective around primary health care renewal is also looking at the inclusion of pharmacists and people within teams that can be, again, more community-based. As we get into more and more opportunities for collaborative practice, you know, we are seeing that instead of simply a doctor prescribing a prescription, the patient goes, they don't get to talk about it a whole lot, that what we are seeing is that inclusion with, maybe, the nurse practitioner, but also maybe a dietician, a pharmacist, part-time or full-time, being a part of a team that then comes around that individual and says, how do we help this

[Page 24]

person to manage across their illness, treatment and so on? There is more of that that's happening. Again, not enough.

You would be aware, as well, of the opportunities that are there for us to engage paramedics more actively within some of those areas, as well, and some of the movement toward that. So much more needs to occur there but it has a good beginning.

The third one, I will conclude with, is that, again, across the country, some places in different spots with it at the moment - but we need to get ourselves positioned, in terms of having a comprehensive pharmacology information system, working toward that. The drug monitoring piece is going in this year in this province but we need the larger system which will also then help us and help teams working with individuals to analyze their particular situations and deal with it more effectively.

MR. DAVID WILSON (Sackville-Cobequid): I think it's an area where we really need to expedite coming, maybe, towards a full electronic health record-keeping, especially when it deals with the pharmacies across the province. I think it would benefit it greatly. I know there is a cost incurred, initially, but I think, in the long run, it would definitely pay off.

I want to turn now a little bit - several of the committee members talked about the co-pay and the premiums paid. Some of the concerns I have heard in my community are around the option of going into the Pharmacare Program or opting out. The biggest question a lot of them have is, when they come to me, should I go in? Of course, knowing the potentials down the road of being ill and the cost of medication these days, I try to steer them into making a wise decision. But it does come down to money when they're making those decisions. These seniors are on fixed incomes. Potentially, an individual could pay up to $1,200 if they're paying the full premium, plus maxing out their co-pay. It is a big issue for seniors in our community.

One of the questions many of them ask me is, after having decided not to enter the program, reading through the cost and applying - people who apply late, do you feel that it's acceptable, the penalty that they incur, if they don't choose to join at 65? I mean, I think it's one and a half times for five years, so potentially, an individual could pay almost $600 a year, plus a co-pay, so another $1,000. Do you feel that's acceptable and are you looking at ways around that, or avenues for individuals? There are many reasons why someone may not choose - not only just financial, maybe just unable to comprehend the necessity to do this. Are you looking at avenues that we could get rid of that severe penalty on the seniors?

MS. DOIRON: We review this, I think, annually, when we are looking at any of the other policies, you know, that we are going to be moving on. It, again, is one that is very difficult to try to make a choice around because if we did not impose a penalty that was substantive enough to cause an issue, then we potentially could have all seniors choosing to say, we're not going in until we have to. Then you get into a whole other arena of whether

[Page 25]

the program is sustainable or not. Having said that, I'm going to ask Emily to answer a bit more about that.

MS. SOMERS: The program was set up as an insurance model so that those with the - you know, everyone would pay a certain amount of money but, of course, those with less drug needs would be supporting those with higher drug needs. That's how it was set up. As the deputy had said, if you don't set it up that way, people would not come into the program until their drug needs were high. It was felt that that kind of a program was not sustainable.

We dropped the penalty. The penalty was a lifetime. That was dropped in the last year, or the year before, to five years, so we felt that was a significant improvement in the program. I'm sure there continue to be people who find that still to be far too harsh but it is, certainly, a step in the right direction. We are hoping that leaving it at five years will - see, there are very few people over the age of 65 who will not eventually need access to the program.

If they are privately insured we have already exempted them. We just want seniors to have some level of insurance so that we don't just get hit with high users coming into the program. So I think it is more reasonable than it was and we are beginning to find the balance so that it's encouraging folks to go into the program when they turn 65.

MR. CHAIRMAN: You have less than one minute.

MR. DAVID WILSON (Sackville-Cobequid): I think it's important, it revolves around the education also of the seniors and really trying to educate them on the importance of entering the program. We do have to emphasize the fact that it is a large portion of their monthly income when they do decide to get in. I'm glad to see that you're looking at trying to even out what they pay up front because when a senior has maybe $100 a month or $80 a month, and for some unforseen reason they have to pay a $100 medication payment, they opt not to do it.

I have witnessed it several times where you ask patients what medications they are on and they've chosen not to take them. It definitely is an area we have to address and I'm encouraged that you said you're looking at that and I hope this can be expedited quickly, and I think it would help, especially those low-income seniors who are the ones struggling with this.

MR. CHAIRMAN: We will now turn to the Liberal caucus.

The honourable member for Halifax Clayton Park

[Page 26]

MS. DIANA WHALEN: I'm cognizant of the fact that our time is short so I'm just wondering if I could ask you to give fairly brief answers, if possible, because I have a number of questions.

The first thing I'd like to go to is a little bit of a continuation of the discussion that my colleague, the honourable member for Sackville-Cobequid had begun and that has to do with reviewing prescriptions and ensuring that the education is there and that the appropriate drugs are being administered to seniors and to others on the Pharmacare Program.

In Australia, there's an annual prescription review that is covered under their medical system, where doctors or other professionals would review the prescriptions that an individual is taking. They have found - and I'm sure you're aware of it - that that has been very cost effective. They found that they are able to eliminate ineffective drug usage, make sure that there aren't adverse side effects and complications because the wrong drugs are interacting. So it's a very effective way both to improve the health of the individual and to help the costs that our systems are under.

I would like to know whether that has been reviewed and whether you are looking in any way at introducing that here in Nova Scotia?

MS. DOIRON: I'm going to make this real short. Jim. (Laughter)

DR. MILLAR: Having been a family physician, that is something that most family physicians have done on a regular basis anyway. I know when elderly people came into my office I asked them to bring their little brown paper bag with everything they were taking, whether it was prescribed or not. Another way that would be helpful is when we were talking about the electronic health record.

Under the Primary Health Care Transition Fund from the federal government, we have received funding that we will be starting to put an electronic health record system into family practices in the province. We have 150 licences that will do some of the things that you talked about, in connecting with the pharmacy systems to find out who is on what drugs and who got them from somebody else and those sorts of things.

MS. WHALEN: Can I ask again, though, about a formalized prescription review? You are indicating that many doctors would do that as a matter of course but they aren't reimbursed for doing that.

DR. MILLAR: That is correct and at this point that is not something that has been brought forward by the Medical Society as something that doctors are looking for. It is in the nursing homes and it is a requirement in the nursing homes and they are paid for it in the nursing homes.

[Page 27]

MS. WHALEN: That's something perhaps we can pursue.

MR. CHAIRMAN: Ms. Doiron.

MS. DOIRON: Just to answer your question, too. Specifically, we have not pursued that. It may be something for us to pursue. Probably we would want to look at that within a listing of priorities and one of those priorities right now would be to get a system in place, along with a few other things that would enable it once you kind of wanted to go toward . . .

MS. WHALEN: Perhaps I could ask a question that follows up on that. I think what Dr. Millar is referring to is the computerized prescription monitoring, is that right? Would that be the term we could use for something that is coming down the road? My question would be, when can we expect that, just some indication of the time frame?

DR. MILLAR: We're expecting the prescription monitoring program to be fully functional later in the Spring, certainly before Summer. They are just putting the final testing on Medavie to see how the system is working. What I was talking about was in addition to that would be an electronic health record in physicians' offices that would monitor all the treatments that they're on.

MS. WHALEN: So it's further. I would like to go to another issue if I could and that's the change in the health care costs for nursing homes that was introduced January 1^st. That will clearly have an impact on the Pharmacare Program and costs because we've now changed the way that seniors in nursing homes are being treated, in terms of their costs. Now, individuals - and I'm thinking particularly the spouses left in the community - are covering the costs of their Pharmacare, premiums and co-pays, which they weren't doing before and it's having quite an impact. I have already heard from quite a number of seniors in the community who are finding the new system very difficult. In fact, I'm wondering whether or not you anticipate any savings in your Pharmacare budget as a result of the change made?

[10:30 a.m.]

MS. DOIRON: No, that has not been factored in. We are not really anticipating savings with that at all. I think that what we have looked at within that particular program change area, is the assets and income across the individual and their spouse, whatever, and the impact the payments that they now have to make will have across that scope. As we know, there was a lot of concern about having to use assets up front for individuals in the home. I think that on balancing, that it's not our impression that we are, and it certainly was not the information received in other provinces, that having people pay for their premium as opposed to just picking it up, as we did in the former system, was of any terrible concern. It was not a concern that was registered whatsoever when we did our research across the country and I don't think we've heard a great deal of response directly to the department on that issue either.

[Page 28]

MS. WHALEN: If I could say, I've heard from a number of constituents already - and I realize I'm just one of 52 ridings. I think we're going to find it is quite widespread as the impact becomes more clear.

MS. DOIRON: I would say that we are working with the introduction of that program and basically, we will be doing reviews periodically, in terms of what the impact has been, relative to the policies that accompany that program, and that is actually on a planned-in basis. So we will be assessing that at certain points within the next year, three years, whatever, to make sure that we're addressing any fallout that we might not have anticipated.

MS. WHALEN: Would it be fair to say then that that's a formal mechanism that you're going to put into place for a review?

MS. DOIRON: Absolutely, it's part of a plan, a strategy that was developed that will actually be carried out with staff, but also some external review.

MS. WHALEN: What I'd like to just raise today is the fact that because you're now going to a very rigid formula that doesn't have any concern about what people's costs of living are, it just has a formula that divides income and so on, it means that the people I have talked to said that it's not being taken into account if they have excessively high medical costs or extra things they have to cover. They also have to keep enough - I'm thinking particularly about the spouse in the community - money out of the bit that they are left to make sure they can cover the glasses, hearing aids, wheelchairs, and ambulance trips for their spouse who is in a nursing home. I feel that people, particularly the spouse in the community, is still being left in a precarious position because the department now no longer cares what their budget is, that has been my experience.

I would really like to see in that formalized review if you could look specifically at the impact on the spouse in the community and whether or not they are being severely impacted by the policy change. It is of great concern to me.

MS. DOIRON: We will do that.

MS. WHALEN: I would like to know, do you have any idea how many seniors in nursing homes stayed on the old system and how many have transferred to the new?

MS. DOIRON: I'm sorry, I don't have that figure today but we certainly can get it. I believe that many of those who had been in the system chose to stay with the system that they were practising at the time but we can send that number on.

MS. WHALEN: I think that number is very important to whether or not there has been a savings in your Pharmacare. I realize there has been a new cost because many other

[Page 29]

health costs have been absorbed by the department, but in the Pharmacare Program, I would have expected you to see a savings.

MS. DOIRON: We weren't anticipating that and there was nothing built in to suggest it and that was not one of the motivations that we had. I don't know, Emily, if there's anything more you can bring to that but I'm not aware of any real impact in that area.

MS. SOMERS: No, we didn't estimate any savings because of this. We see some logistical issues around this because now each individual senior has to register with the program but we did not do any calculations around reductions in drug use or increases in premiums or co-payments because of this. We did not expect that to happen, but we can look at that, as well.

MS. WHALEN: Thank you.

MR. CHAIRMAN: There's less than one minute, Mr. Wilson.

MR. DAVID WILSON (Glace Bay): To the deputy minister. You mentioned the topic of catastrophic drugs. There has been a tremendous amount of money that has been transferred to the province from the federal government and some of it has been earmarked specifically for catastrophic drug programming. In the last fiscal year, there was about $30 million. How much of that money has actually been spent on a catastrophic drug program? You mentioned Fabry's patients and so on. Cancer patients in this province, I would imagine, would benefit enormously if there was government action on a catastrophic drug program. So how much of that money that has come from Ottawa has actually gone toward a catastrophic drug program?

MS. DOIRON: I think that there are a lot of variations in terms of the definition of what we mean by catastrophic drugs. When some people refer to it, they mean the expensive drugs for rare diseases. So when other people refer to it, they mean universal coverage. So, for example, if you take the broader approach to it, there have been substantial increases over the last year or two in terms of the whole drug program and I think that we have attempted to kind of still further understand how much further we need to go with that.

One of the concerns that exist with dollars that have been coming through those accord agreements, the FMM, is that most of the categories of those dollars, although they get announced repeatedly, as we know, as dollars coming to kind of fix things, most of those dollars end up being one-time dollars or they continue for a period of a few years but then it drops off. Consequently, I know we have to, when we are looking at formulating policy advice and certainly the decision makers have to take into consideration, then at what point do you take the one-time dollars, allow programming to develop that is after several years it is going to kind of come back and hit you in the face financially.

[Page 30]

So while there are some real benefits that have occurred and we have added some different new programming, it has not all been in coverage of catastrophic drugs because that strategy really still isn't complete and that's why we are pushing that on as quickly as possible at the national level, to try to understand exactly where should we go with it and what will it mean to this province.

MR. CHAIRMAN: Thank you, Ms. Doiron. We will now move to the PC caucus.

The honourable member for Kings North.

MR. PARENT: Thank you very much, Mr. Chairman. When you look at the Seniors' Pharmacare Program, it was introduced in 1995, I believe, at about $7 million. Now it is what, $110 million? (Interruption) It was introduced in 1995 and I believe the cost was around $7 million, now at $110 million. Are those accurate figures, roughly? Yet the number of seniors covered has not increased dramatically. Why such a huge increase? Is it all due to utilization - I think you may have touched upon this, but refresh me - or is it due to the rising cost of drugs?

MS. DOIRON: I am going to defer, if I may, to Ms. Somers.

MS. SOMERS: The program actually started in 1974, Seniors' Pharmacare, and it was at that time that the cost was at $7 million.

MR. PARENT: Okay, thank you.

MS. SOMERS: In 1995, there was a major change to the program where the premium was introduced, so there were some major changes in that year but nonetheless, what you are saying is true. There have been significant increases in costs and we are not seeing an increase in the number of beneficiaries. There are a couple of reasons for that. When we moved to insurer of last resort, any senior who had insurance through a private insurer or was insured under First Nations or under Veterans Affairs Canada had to use those insurers first. So that dropped the number enrolled in Seniors' Pharmacare down by about 10,000 and we have actually been fairly stable at the 95,000 number ever since.

So the increase in cost isn't really due to increasing numbers of seniors, it's increasing numbers of prescriptions being taken by the seniors who are on the program and the increase in cost per prescription. Most of it is utilization so the seniors we have are taking more drugs. There is a small increase in price and we are also seeing new drugs come to market at unbelievably high prices. So there are a number of factors all occurring at the same time that are driving that cost but it isn't because more and more seniors are coming on the program at this time. We do expect that to occur in the future but right now, that number is fairly stable but other factors are pushing the costs.

[Page 31]

MR. PARENT: The main cost driver is increased utilization.

MS. SOMERS: Definitely.

MR. PARENT: Has that resulted in a healthier senior population? Have you been able to track that?

MS. SOMERS: These are the ultimate outcomes and the ultimate indicators of whether or not our program is working. We have not made the connection between a healthier population in Nova Scotia and, again, it's not just drugs that would lead to that but I do believe that's where we need to move when we are trying to determine whether or not our programs are being successful, is what is the health of our population in trying to figure out which indicators will give us that information. But I personally have not been able to make the link between what are we covering under Seniors' Pharmacare, how much are we paying, and a healthier senior population.

MR. PARENT: How many seniors currently in the Pharmacare Program are exempt from paying a premium or pay a reduced premium and how do they apply for that?

MS. SOMERS: Approximately 60 per cent of our seniors pay no premium or a reduced premium. Only about 40 per cent actually pay the full premium, which is an indication of the incomes of seniors in the province. It's very simple to apply for that. It is a matter of if you receive the Guaranteed Income Supplement in this province, you do not pay a premium. That's just automatic. You have to demonstrate proof of receiving the Guaranteed Income Supplement. However, if you are a low-income senior within the scale that we have determined, your premium is reduced based on your income. So when we send out our packages every year for renewal or when someone turns 65, those forms and that information is made available to seniors. Plus, there is a Web site if seniors do have access to the Internet where they can get this information as well and there is a 1-800 number available to seniors to call the program to see what their benefit might be under the program.

MR. PARENT: I understand and Ms. Doiron made the point, which is a very valid one, in a province of under 1 million people, the comparison between us and say Alberta you just can't make. But in comparison with the other Atlantic Provinces, how do we fare? How do we stack up in terms of our coverage for Pharmacare? How are our premiums and how many seniors are enrolled? How do we fare in comparison with the other Atlantic Provinces, which are a more accurate yardstick?

MS. SOMERS: It is actually quite difficult even to compare us with the other Atlantic Provinces because the programs are very different. We are the only province that provides universal coverage for seniors.

[Page 32]

MR. PARENT: So we are the only Atlantic Province that provides universal coverage for seniors?

[Page 33]

MS. SOMERS: Right. In New Brunswick, they do provide access to a private plan for their higher income seniors but the premium related to that is much higher than the premium they have set for their low-income seniors so there are different models in the three provinces but actually we would provide the best access for all seniors within the Atlantic Provinces.

MR. PARENT: So we are at the top in regard to that. Well, that's good to know. It's always nice to be number one.

In terms of demographics and the aging of the population, have you done models on that, how that will affect the Pharmacare Program? If you could give us some insight into that. That may be the question that Mr. Wilson asked of you, where do you see Pharmacare in two years which is, you know, if you could answer that, you would be up in Ottawa making double your salary.

MS. DOIRON: We do have some modelling that is done that includes demographics and some other factors that one of the staff members in Emily's shop is able to do on a regular basis and so when we are looking at any kind of programming, whether it's the annual review of the program we are currently offering, whether it be looking at what are the potential approaches to a universal program, demographics, income and a number of those variables are included and we have the ability then to overlay those variables than to say what if, then, we were to take a policy here that says at this income level certain things happen and we certainly include within that the number of seniors.

So looking at the Seniors' Pharmacare in particular, we definitely track and can do projections against what we think may be coming down the pipe.

MR. PARENT: In terms of the private system, you mentioned if they are covered by the private system then they are not part of the public system or how does that work? If they have a private drug plan, that's the insurer of first resort and the government plan only kicks in secondarily or can you explain to me a little bit more how that works?

MS. SOMERS: That's exactly right. If you have a primary private insurer, you use that insurer first. Our concern, however, was, what if an individual's costs under their private insurer are actually higher than their costs might have been under the Seniors' Pharmacare Program?

[10:45 a.m.]

MR. PARENT: Right. This is what I was getting at.

[Page 34]

MS. SOMERS: How do we encourage people to stick with their private insurer. So we have the ability to immediately enrol seniors in our program and pay them the difference between what their private insurer would pay and what Seniors' Pharmacare would pay to encourage them to stay with their private insurer. So as soon as their costs hit a certain level, then they start dealing with Pharmacare, we enrol them in our program immediately and their costs will not exceed what their costs would have been under our program.

MR. PARENT: Thank you. Those are all the questions I have, Mr. Chairman.

MR. CHAIRMAN: We are almost at the hour anyway. I want to now turn to the deputy and, Ms. Doiron, do you have some closing comments that you would like to provide to the committee?

MS. DOIRON: I would just say that first of all, thank you for inviting us on this topic. I think it is one that is of great importance to seniors but also to many other people in this province and something that we need to keep looking at and reviewing and moving toward fulfilling, I think, greater responsibility both in looking at coverage and trying to keep costs as reasonable as we can, in terms of looking at the directions regarding outcomes and the success of the program and actually improving the health and the situation for the individuals in this province.

In the Department of Health, I feel very fortunate to have the kind of staff that we have in our Pharmacare area. I want to commend them because as we have been beginning to do more and more in regard to pharmaceuticals across the country, the programs and approaches that have been developed in Nova Scotia have actually been models that have been expanded to both Atlantic Canada and to the national scene. Consequently, I think that we can feel confident that we have very good people, thinkers, innovation, accountability and responsibility, I think, that the public should feel good about and that hopefully you feel good about.

Having said that, we know that there are many areas that we have explored here today that probably we need to improve upon to make the best use of this approach to health and we are intending to do that and I think some of the areas that we are working on now are going to allow us, over the next two, three or four years, to actually significantly improve our ability to understand, to deliver, to be accountable and most of all to help to improve the health of the citizens in this province.

So, again, I will just say thank you so much for giving us this time to explain some of that and I hope it has been helpful. As we have indicated, as we have gone through conversation, there are several follow-up pieces of information we need to send on to you and we will do that.

[Page 35]

MR. CHAIRMAN: Thank you, Ms. Doiron, and on behalf of the committee, I want to thank you and Ms. Somers and Dr. Millar for your very informed answers to the concerns presented by this committee and we do appreciate your endurance because I know you have been here several times lately.

Next week at our meeting - you will be delighted to hear this - we are meeting with Service Nova Scotia and Municipal Relations so we won't be calling on your talents for next week. We will give you a little break. Don't get me wrong, we are delighted to have you here. (Interruptions) Yes, you are fully welcome to come by and watch.

Also, I want to thank our Assistant Auditor General, Elaine Morash, for sitting in on the meeting.

Having said that, we will adjourn the meeting for today.

[The committee adjourned at 10:49 a.m.]