What Canada’s Proposed National Drug Plan Would Mean for Small Business
You may have heard news of the new 2018 Federal Budget which has implemented some changes for small businesses. The federal government has put heavy emphasis on creating a new plan that will lower some taxes for small businesses as well as encourage more equitable treatment for women, both as employees and business owners.
From a small business benefits perspective, we were interested to see the new Federal Budget is proposing implementing a National Drug Care plan. The exact details of this plan are still very much in the research and consultation stage (feel free to call us anytime, Mr. Trudeau), but in general, small businesses can prepare themselves for the following.
Less Cost for Drugs
If drugs start being covered by the federal government, many small businesses with drug plans can expect a decrease in costs. Pharmaceuticals are far and away the most expensive portion of any drug plan, so any decrease in cost will be good for a small business’ bottom line.
How Will Coverage Work?
It’s tough to say exactly what kind of drugs will be covered.
Different countries around the world have different approaches to covering drugs. In most cases, the Government approves drugs and adds them to a national formulary, so the most common and effective drugs are covered. But the process can differ from country to country.
For example, Australia’s government regulates the price of drugs, and has a tiered system based on income — those families with less income pay little or nothing for drugs, while those with higher incomes pay more. Switzerland and the Netherlands, however, provide universal drug insurance (so no one “pays” up front) through their National Health Care Plan, but it’s still up to private insurance companies to compete over rates and services to secure the government contracts.
Who Ultimately Pays for It?
This is obviously an important question when it comes to new policies. Just because we have “universal” health care, doesn’t mean it’s free. As anyone with a health plan knows, drugs aren’t cheap. Some argue taxes could increase for these plans, however universal drug plans also lower the costs of drugs overall.
In the case of Australia, which has a national drug plan, since drugs are approved by the government in large quantities, they have more negotiating power with pharmaceutical companies and manufacturers and actually bring down the prices of drugs. One estimate states Australia pays $6 Billion less in drugs than Canada does.
More Money for Other Services
Whether taxes are increased, or an income-based approach to drugs is taken, the bottom-line for small businesses is sure to see improvement. This may mean businesses will be more freed up to use the savings on other useful perks like business development, paramedical coverage, wellness programs or more. Feel free to reach out to us if you have any questions or want more information!