HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

Ms. Maureen MacDonald (Chair)

Mr.Chuck Porter (Vice-Chairman)

Mr. Patrick Dunn

Mr. Keith Bain

Mr. Graham Steele

Mr. David Wilson (Sackville-Cobequid)

Mr. Keith Colwell

Mr. Leo Glavine

Ms. Diana Whalen

[Ms. Diana Whalen was replaced by Mr. David Wilson, Glace Bay]

WITNESSES

Department of Health

Ms. Cheryl Doiron, Deputy Minister

Ms. Emily Somers, Director of Pharmaceutical Services

In Attendance:

Ms. Kim Leadley

Legislative Committees Office

Ms. Sherri Mitchell

Legislative Committees Office

Mr. Jacques Lapointe

Auditor General

Ms. Evangeline Colman-Sadd

Assistant Auditor General

Mr. Gordon Hebb

Chief Legislative Counsel

HALIFAX, WEDNESDAY, MAY 21, 2008

STANDING COMMITTEE ON PUBLIC ACCOUNTS

9:00 A.M.

CHAIR

Ms. Maureen MacDonald

VICE-CHAIRMAN

Mr. Chuck Porter

MADAM CHAIR: Order. I'd like to call the committee to order, please. Good morning. Today we have before us as witnesses officials from the Department of Health regarding Seniors' Pharmacare and prescription drug coverage. We will begin in our usual manner of introductions, starting with Mr. Steele.

[The members and witnesses introduced themselves.]

MADAM CHAIR: Welcome and thank you for being here this morning. I will now ask the deputy minister if she would like to make some opening comments.

MS. CHERYL DOIRON: Thank you. It is our pleasure to speak with you this morning about the Seniors' Pharmacare Program and prescription drug coverage in this province. We all know that prescription drugs are a big part of the Nova Scotia health care system. We also know that prescription drugs are the second largest category of health care expenditure in Canada. As governments, we are constantly challenged to provide safe and effective drugs at a cost that is both affordable and sustainable.

The issue of access to affordable medication is a significant one for Nova Scotians and Canadians alike. According to a 2000 Health Canada Survey, over 19 per cent of Nova Scotians have no drug coverage; that is about 180,000 individuals. It is difficult to know how many of those Nova Scotians rely on prescription drugs to manage illness and to stay healthy. All Nova Scotians should feel confident that they have access to safe, effective and affordable drugs.

Our goal is to improve access to drug therapies, sustain our public health care system and ensure that Nova Scotians have access to drugs they need when they need them. In November of last year, we introduced the Family Pharmacare Program - a universal drug coverage program for all Nova Scotians. The program is aimed at improving access to prescription drugs, as well as providing families with a safety net against really high drug costs. So far, over 9,800 families with over 15,400 individuals are enrolled in this program. We will continue to build upon the success of this program to better serve Nova Scotians.

Another reality facing our province is the aging population. Nova Scotia is one of the provinces, as you know, with the largest percentage of people over 65. Meeting the changing needs of our senior population is a priority of the Seniors' Pharmacare Program and is one of the ways we are addressing those needs.

The Seniors' Pharmacare Program in Nova Scotia is one of the most comprehensive drug coverage programs in Atlantic Canada. It helps ensure that more seniors can afford the rising costs of prescription drugs that they may need to stay healthy and manage illness. Each year it costs more to operate the program as more people are relying on more prescription drugs. We estimate that in 2008-09, the Seniors' Pharmacare Program will cost about $179 million. As prescription drug costs continue to rise, the government is committed to covering 75 per cent of the costs for seniors for this program. Of the nearly $179 million cost of this program, government will pay 75 per cent - or nearly $133 million - with seniors paying 25 per cent or around $46 million.

This year, as you know, we introduced changes to the Seniors' Pharmacare Program that may keep program fees from increasing for seniors next year. We've also introduced new payment options for co-payments, so seniors can choose a payment plan that works best for them. Seniors now have the option to either pay 33 per cent of the drug costs at the pharmacy, or they can pay the co-payment annual maximum amount of $382 in monthly, quarterly or annual payments. The important thing to note is that no senior will pay more than $382 in co-payments in this year under the program.

So far, nearly 3,000 seniors have chosen that option of different payment methods. Changes to the program are discussed with a Group of IX organizations through the Department of Seniors. The primary role of this group is to ensure that the needs of seniors are represented in government decision-making. The group works very closely with the department to make these changes to the program, in order to make the program both

affordable and sustainable over the years. We have received endorsement from the Group of IX for the changes that were implemented this year, as we have done in previous years, and they have told us that they felt heard and involved in a significant way. We thank them for their support and will work with them as we continue to improve upon this program.

As I mentioned earlier, prescription drugs are the second largest category of health care expenditures in Canada. Nova Scotia is a province with one of the largest senior populations that is expected to continue to grow. Although we are a very small province with many fiscal constraints, Nova Scotia has been making strides toward improving access to prescription drugs. We are committed to making this valuable program available to Nova Scotia seniors for years to come. So we thank you for the opportunity to be here today, and Emily and I now look forward to answering your questions.

MADAM CHAIR: Thank you very much. The opening round of questioning will be 20 minutes in length and I recognize Dave Wilson with the NDP caucus.

MR. DAVID WILSON (Sackville-Cobequid): Thank you, Madam Chair, and thank you, deputy. I'm not sure who we have with us. I don't know if I have this here. Definitely, this is a topic that is on the attention of many Nova Scotians. As you said, many Nova Scotians don't have a Pharmacare Program through work or a third party and we know that the government introduced the Family Pharmacare Program this year. There have been a lot of changes, a lot of questions. I don't know if we will have enough time to cover the concerns we have over the changes we have seen over the last little while.

So I want to start, I guess I will get the first topic out of the way and that is something that myself, my Leader and our Party have fought for well over two years or more, I think, and that is the funding of Avastin. We had been told by the government, time and time again that they couldn't do it, they won't do it and that they don't make those decisions. It's under the Cancer Systemic Therapy Policy Committee. I have asked the Minister of Health a number of times over the last couple of years about this drug and about the coverage of it. We heard, with the recent budget, the minister stated that it was a late addition to the budget this year. So I would like to ask the deputy minister, when were you aware of the government's intention to fund Avastin? Around what was the date that you knew that the government was going to fund Avastin?

MS. DOIRON: I'm trying to remember specifically, Madam Chair, what the date might have been. I guess I could say that it was probably on the weekend prior to the budget being put out to the public.

MR. DAVID WILSON (Sackville-Cobequid): That came through, I guess, a directive from Cabinet or the minister himself must have informed you that was their decision.

MS. DOIRON: I was advised about that decision by my minister, yes.

MR. DAVID WILSON (Sackville-Cobequid): And did he give you a reason why they were doing this? As I said earlier, for years the minister said we can't do it, won't do it, we don't make those decisions. Did you question him why he was making that decision now? I understand your position as deputy minister is to implement government policies but did you have a conversation or did the minister indicate why, all of a sudden, the change of heart with this drug and the coverage of it?

MS. DOIRON: I think that basically since that was a decision that was taken by the minister and government, they are probably the best to answer that type of question. Certainly, the position that we provided in terms of advice to government was consistent and I think that obviously government has the right to make choices and decisions and they did so but I don't think I'm the best person to give an explanation around their decisions.

MR. DAVID WILSON (Sackville-Cobequid): But that recommendation was not to fund Avastin, correct?

MS. DOIRON: We had remained consistent with the advice that was provided by the committee not to fund.

MR. DAVID WILSON (Sackville-Cobequid): So with that, it leaves me to wonder, the individuals on that Cancer Systemic Therapy Policy Committee - what their thoughts or what their concerns were. Have any of those members on that committee - and I'm not sure how many, there might be 26, you could correct me - have any of those members resigned from that committee, that you are aware of?

MS. DOIRON: At this point, no.

MR. DAVID WILSON (Sackville-Cobequid): Have you had correspondence from any of them, or the chairman of that committee, concerned around the government's decision to really not take their opinion on this drug?

MS. DOIRON: There has been discussion with the chairman of the committee and basically with the committee itself. They are taking the whole situation under consideration. So at this point, we don't have any particular response from the committee in terms of a position from them.

MR. DAVID WILSON (Sackville-Cobequid): So it leaves me to wonder how someone gets onto that committee? What I want to see, and I have said it in the past, is transparency. Who is on it? How do you get on it? Could you tell me, quickly maybe, how does an individual - and I know you have physicians and people who work with cancer and oncology - how does an individual get on that committee?

MS. DOIRON: You are quite correct, of course, in that we have a variety of different types of knowledge and expertise on the committee. Partially, the committee is selected from that community of individuals who would bring that knowledge which would include knowledge of oncology, certainly different categories of cancer knowledge, as well as people who are very knowledgeable about the scientific side of pharmacology. We also have economists, anesthetists, members of administration from the system, members of the public or cancer survivors who are on that committee as well.

[9:15 a.m.]

I think in order to more fully address your question, I'm going to ask to have Emily explain a little bit more to you because she basically, from an internal point of view, provides a lot of support to the committee and has been very instrumental along with our acute tertiary care branch in getting this committee up and running and supporting the work that they do. Madam Chair, if I may.

MR. DAVID WILSON (Sackville-Cobequid): I understand that and I understand that the background of these individuals is immense, the knowledge there but what I asked was, how did they get on the committee? Who tells them, who allows them to get on the committee? Is it yourself? Is it the Minister of Health? How do they get on that committee? I know the background of it, so that's the specific question, how do you get on it? If I was an oncologist and I wanted to be on that committee how do I go about getting on that committee?

MS. DOIRON: I'll ask Emily to address that since she was instrumental in putting it together.

MADAM CHAIR: Miss Somers.

MS. EMILY SOMERS: I'm actually trying to read through the terms of reference myself. They are appointed by the Minister of Health and we make the initial contacts. We understand the skill set that we are looking for on this committee and we will make the initial contact with the oncologists or they can make a contact with us, or whatever type of expertise we're looking for to see if they're interested, if they understand the work of the committee and are able to work with us on that committee. So we make those contacts first, but ultimately the names are provided to the deputy minister and the minister and then they are appointed that way.

MR. DAVID WILSON (Sackville-Cobequid): So ultimately the Minister of Health has the final say on who gets on these committees and that concerns me. I think it should concern everybody in Nova Scotia. Here we have a committee that is going to look at drugs, look at pharmacology here in Nova Scotia and we have a minister who is going to appoint them. In my mind, what that shows and what that tells is that the minister will find like-

minded individuals who have the same theory, maybe, and opinions about things and put them on the committee. Why? We have an agencies, boards and commissions committee in the Legislature where it goes through a process of evaluation and the applications are given, and it's done through, I think, a more fair process than one Minister of Health putting people on a committee. Has that been identified as possibly something we should be doing? Do you have concerns that maybe that's where we should go so we make sure we have the best educated people on this committee and that we can't have any influence by any Health Minister, no matter if it's this Health Minister or the previous Health Minister, or the next Health Minister? Why do we have a committee created in that fashion today in a system where we have a process in place where there should be a more clear transparency when we appoint people to boards or committees?

MADAM CHAIR: Ms. Doiron.

MS. DOIRON: I guess my response to that would be that, certainly, when we have boards and groups that are put together that arise out of legislation or regulations, then there is a process that we go through to attempt to attract members such as board members of district health authorities. They do go through the process and basically apply to sit on boards and express their interest and I know that the members would be aware of that process.

We have probably quite a number of committees that do work which is germane to the health care system and call upon a variety of different types of expertise and groups of people in order to attempt to make sure that we're working appropriately in a number of areas. Whether it would be with the review of drugs, whether we're looking at basically setting or improving standards of care delivery. There's a whole variety of groups that work within the health sector to attempt to make sure we're both understanding, monitoring, and improving the system on an ongoing basis.

I think it could get quite cumbersome if every single one of those groups had to go through those processes and in some cases we have reasonably small numbers of people with certain types of expertise so there's a small population from which to draw on individuals at times. On the other hand, I think that basically what happens is staff who work with these individuals in the various health and medical communities are generally the ones who are identifying individuals who might be suitable for participation in committees and trying to understand the level of demand that is against any individual at any point in time.

These individuals tend to sit on a number of different groups. If there was a process that people felt more comfortable with, I don't think we would have any objection to reviewing that as long as it allows us enough flexibility to be able to continue to get work done and not make it so cumbersome that we would have difficulty getting the co-operation of individuals who are very, very busy people, who freely give their time to improve the quality of the health system. I wouldn't want to see something occurring which would add more pressure or frustration to any of their processes and endeavours.

I think it's something that we could consider. The Minister of Health typically, in those kinds of situations, does not know all the members of those communities, nor goes out and seeks particular individuals and will take advice on the qualifications and the individuals that we are suggesting may be appropriate to serve in various capacities.

MR. DAVID WILSON (Sackville-Cobequid): No, and I appreciate that, but ultimately here we have a committee that's going to approve medication that's going to be used in Nova Scotia that's going to cost millions of dollars. Avastin's going to cost, I think, a couple of million dollars - maybe even more.

MS. DOIRON: More.

MR. DAVID WILSON (Sackville-Cobequid): So, what we need is transparency and accountability. Currently, the system we have has neither. We have a Minister of Health who appoints an individual and there's no reason - there are hundreds of boards, agencies and committees in this province who have people on them who are volunteering who are just as you described, hard-working individuals here in Nova Scotia who have a capacity to help government make policies. I asked in an earlier question around if you had any correspondence from this committee and no wonder we don't have it right now - what are they going to say? The minister appointed them. I'm sure the minister could take that away just as easy.

I think this is something I'll need to ensure we will look upon to push the government to do the right thing and to make this committee more accountable and more transparent to Nova Scotians. We're talking about taxpayers' money.

With that, I'm going to start with Seniors' Pharmacare Program. Recent changes that were made - I received numerous amounts of calls from all over the province as the Health Critic for our Party. I was astonished that the way I found out about the changes to the Pharmacare Program was a senior calling me and saying, I got all this paperwork in front of me and I don't understand what it says, I don't know what I need to do, I don't know what options of payments I'm going to use - can you help me? I had no clue.

Then we hear that the help line the government put in place had so many calls that it crashed. I called it myself and received the same message that all seniors who called that line received. It was from the Minister of Health saying that we'd get back to them by the end of the month. So I'm wondering how many seniors called that number and left a message in that short period of time when all of a sudden they received notification that changes were coming?

MS. DOIRON: I might ask Emily to take a look at that number while I respond just briefly to this. I know that the number of changes that occurred this year were quite significantly more than in previous years. I think that's always difficult for people and

sometimes for some seniors to be able to take a look at a lot of different variables and make choices among them. At the same time, some of those changes that were made were changes that people had been looking for for a period of time. For example, we had been working to make sure that the computer system could be set up adequately to make sure that the co-payments could actually be paid over time - monthly, quarterly and so on, as I mentioned in my opening comments.

This year that was possible and it was introduced and a number of people are taking advantage of it, but it was a change that had not previously been there, even though in lots of cases it was to the benefit of the senior.

As well, with the introduction of the Family Pharmacare Program, this, I think, could be quite confusing for people as well. We wanted to provide the best possible approach and option for seniors because there are some seniors who may actually be better off under the Family Pharmacare Program than the seniors' program, so we did provide the opportunity for them to choose which program they would like to be in. I think that's a lot to introduce at one time.

Through the discussions we had with the Department of Seniors and the Group of IX, we had agreed with their suggestion to take off the $30 maximum per prescription because when it was looked at over time, it basically had introduced some inequities across the whole group of seniors. So we did want to address that and correct it when it was requested of us. So I think it's legitimate to say that each one of these changes on its own was probably appropriate and the right thing to do and a benefit to seniors, but there were several major changes here all at once for people to have to consider. Usually we would . . .

MR. DAVID WILSON (Sackville-Cobequid): Excuse me, I only have a short period of time here. I understand then hopefully you have the figure of how many seniors called. But that's exactly what I'm saying, here you have all these changes and the seniors had no clue on which was the best option for them and they were asking me and I had no information on it, none at all.

Why didn't your department, why didn't the government send out information packages to the MLAs, who are usually the first contact for an individual or a senior in a community - a government contact - no matter what Party they're from, but had no clue, I was in the dark? Within a short period of time, within a couple of hours, I had to try to figure out the best option for people and try to give them advice on it, when the government had no information package available to me as an MLA. I think that was wrong, it was wrong to do it that way, it was a mistake and I think seniors recognize that.

So could you quickly tell me how many seniors left the message for the minister to call them back?

MADAM CHAIR: Ms. Somers.

MS. SOMERS: The initial crash or the 14,000 calls came into our system and that's what exceeded the capacity of our system. Normally we're prepared for 1,000 to 2,000 calls when we re-enrol seniors, which we do every year. This year we had 14,000 calls. That was the absolute peak.

Following that, our numbers dropped significantly and they dropped over a two- to three-week period of time, back to normal levels, but they were significant and beyond what we had seen before, during the first couple of weeks.

MR. DAVID WILSON (Sackville-Cobequid): I know I have only a couple of minutes so . . .

MADAM CHAIR: Ms. Doiron, quickly.

MS. DOIRON: Thank you. I just wanted to acknowledge the comment from the member relative to the sharing of information with MLAs because I think it's a very good point. Maybe it would have been better had we thought that in advance but I think with any other changes that are coming along, it would be a good practice for us to introduce.

We did, as you know, send to every household in the province brochures and things around the Family Pharmacare Program but we did not send that extra information about seniors. Thank you for that.

MR. DAVID WILSON (Sackville-Cobequid): With those sheer numbers, alarm bells should have gone off. So on the message, the minister said he'd get back to them, how many people did the Minister of Health actually call back, out of those 14,000 calls?

MADAM CHAIR: Ms. Somers.

MS. SOMERS: The Minister of Health, personally, I'm not sure how many he called back but every single message that was left was responded to and if there was no response, we tried several times to reach the seniors. We made a huge effort, put extra staff on, extra hours to return calls to all of those seniors, and I'm happy to say that all 98,000 seniors are now enrolled, and were enrolled actually fairly quickly once we addressed the initial issue.

MADAM CHAIR: Order, the time has expired for the NDP caucus. I'd now like to recognize Mr. Wilson from the Liberal caucus. You have 20 minutes.

MR. DAVID WILSON (Glace Bay): Thank you, Madam Chair. Good morning, deputy, and good morning, as well, Ms. Somers. It's always a pleasure to see you, you know that. I think you have the record of appearing before the Public Accounts Committee more than anybody else in the Province of Nova Scotia.

I always listen intently to what my colleague from the NDP says and I have paid special attention to him here this morning. I can understand his concerns and can agree, to some extent, with his concerns regarding the appointment of members to that particular committee that would select the drugs that are used by the department, and in this case in particular he was talking about Avastin.

[9:30 a.m.]

I guess I would like to say I'm sure that if the people there - as my colleague from the NDP said, he understood they came with the credentials that are necessary to make that decision, that they are professionals, but certainly I don't know if I could agree with my colleague that they would be the type of people who would blindly follow the minister like sheep because he made a decision. So I would give them the benefit of the doubt that perhaps they are thinking people who can make a decision on their own. If, indeed, they disagree with the minister, I also think they would let that be known.

Having said that, you will not find anybody in the Liberal caucus who does not agree with transparency and openness. As chairman of the Human Resources Committee, I think it would probably be an excellent idea that, as the member for Sackville-Cobequid has suggested, perhaps those appointments should be made through the process that is established through agencies, boards and commissions in this province.

Moving on to the Seniors' Pharmacare Program, I know, as well, my colleague from the NDP has made some excellent points regarding the confusion that occurred during the changes that were announced. Myself, in my own constituency office, and I've heard from members of my caucus as well, there was a lot of frustration and a lot of confusion that surrounded the whole process. It's great to inform us as MLAs and we can pass that on, but we can only reach a certain amount of people, the people who come to our office or who we run into on the street and ask us those questions, and that information would have been very helpful. But I think perhaps a better public relations campaign, on behalf of the Seniors' Pharmacare Program, to reach the general population would have been a better idea.

I ran into a couple of pharmacists who were not informed of the changes to the program and that would have been the first people that the seniors I discussed it with anyway, that would have been the first group of people they ask the questions of, because of the changes when they go to the pharmacy and so on. So I don't know if there was an information package that was available or so on, that would have been made available to that group of people. Again, the point has already been made and it's an excellent point. I know you said that you're going to consider that in the future.

The last time we talked about the Pharmacare Program here at the Public Accounts Committee, about three years ago, about 40 per cent of the seniors who were enrolled in the Seniors' Pharmacare Program paid the full premium. Could you give us some indication

today what percentage of seniors are paying the full premium and how many seniors are currently enrolled in this program?

MS. DOIRON: I'll defer that, if I may.

MADAM CHAIR: Certainly. Ms. Somers.

MS. SOMERS: This year there are 98,000 seniors enrolled at this moment. I have the exact numbers, but approximately 50 per cent of our seniors are either on the Guaranteed Income Supplement, so that you pay no premium, or their income is such that their premium is reduced to zero. So 50 per cent of our seniors pay no premium at all. There is another - I think it's around 2,500 seniors who pay a reduced premium because of their income.

MR. DAVID WILSON (Glace Bay): Again, since the last time we had the chance to question about Pharmacare at the Public Accounts Committee, some seniors who were in receipt of the GIS were paying the full premium and those premiums have since been refunded.

MS. SOMERS: Yes.

MR. DAVID WILSON (Glace Bay): Can you give us some idea as to the total amount refunded and how many seniors have been in receipt of that refund?

MS. SOMERS: I actually don't have those numbers in front of me, but I have those numbers. When we realized there were seniors receiving the GIS that were paying premiums, we made a decision to go back as far as those seniors had been paying premiums and we have refunded around 10,000, but I can get the exact number and I can get the exact amount. But all of those premiums have been refunded and if there continue to be seniors out there that had paid premiums historically, we will refund those as well. We continue to do that.

MR. DAVID WILSON (Glace Bay): I appreciate that. It was a matter of great interest to the Liberal caucus when we first brought that issue forward and made people aware of it. We brought it to the Legislature around the May 18, 2005, I think. There were a lot of seniors who were affected by this and I would imagine the average reimbursements would have been in the $200 range, whatever the case may be.

In 2006-07, that would have marked the next fiscal year in which information would have been changed that better informed seniors that if they were on the GIS they may not need to pay the full premium, or at the very least, may have only to pay a partial premium as well. Can you give us any ideas as to the number of seniors this applied to in that time frame - 2006-07 - and how many it applies to in 2007-08?

MS. SOMERS: Are you asking me how many seniors are currently in receipt of the Guaranteed Income Supplement?

MR. DAVID WILSON (Glace Bay): Yes.

MS. SOMERS: That are also under our Pharmacare Program?

MR. DAVID WILSON (Glace Bay): Yes.

MS. SOMERS: The number is about 43,000. There is no premium if you are on the GIS, it's not reduced, it is waived completely for all GIS recipients.

MR. DAVID WILSON (Glace Bay): Thank you. You provided us with a chart, in the information that you gave us, of the Nova Scotia Seniors' Pharmacare and on that chart provided by your department, it appears anyway, that since 2001, the Nova Scotia Seniors' Pharmacare Program budget has actually been underspent by about $27 million. Each and every year there's a surplus.

First of all, I'd like to know where that surplus ends up - does it go towards reducing fees for seniors? Is it used to consider, perhaps, new additions to the formulary, or does it go to another sector in health care, or, does that surplus that's there every year just go back into the general surplus of the government?

MS. DOIRON: Basically, what happens with that surplus is that it is used as a basis for consideration of changes to the Pharmacare Program in the coming year, but it can't really be used against that program in the year in which the surplus is calculated.

Trying to estimate the cost of drugs has been a challenge because there is a lot of variation and flexibility. Some years we overestimate and some years we have underestimated. This year, for example, we were fortunate in being able to get the benefit of several of the generic drugs coming on the market, but we're not necessarily aware, at the beginning of the year, which drugs will actually become available during that year.

The surplus at the end of the day, at times, has been used to supplement other programs within the Department of Health, for example, some of the continuing care strategy that basically is generating programs at a fairly rapid rate at the community level, many of which serve seniors. Programs of that type are sometimes supplemented if we have surpluses in other areas of the departments.

We basically have not usually ended the year with any major surplus in the Department of Health budget. Most years we have been pretty close to the bottom line and consequently, any dollars that are available in one area of the department are looked at against all programming across the departments and where we need to transfer dollars.

MR. DAVID WILSON (Glace Bay): So, what you're telling me, deputy, is that $27 million savings that's there does not stay with the Seniors' Pharmacare Program. For the most part, it can go anywhere that is deemed necessary by, I assume, yourself and the minister in the Department of Health.

MS. DOIRON: It's basically the senior leadership team of the Department of Health that reviews the budget on a regular basis and looks at where we're having pressures or where we have potential, so that we can make sure the budget money goes to the best use. We don't leave it with the Pharmacare Program because if we did it would then fall to the bottom line of government and sometimes there are other places where we really need to spend more funds, if they're available.

We will have to make choices in reassignment, to basically determine whether anything that is reassigned can be spent on a one-time basis only, or whether there's any reason to think that this would be repeated and then basically we would start again from scratch with the Pharmacare Programs to determine the best projections that we can for their requirements for the following year. That may mean that then we have to actually add dollars back into the Pharmacare Program during that next year.

MR. DAVID WILSON (Glace Bay): This is just more of a curious question than anything. When the budget estimates are prepared, the amount estimated on the budget is the total program cost, and that includes the costs that are borne by seniors in the program as well. Why wouldn't the budget of this province include the costs that are incurred by government or, at the very least, show a breakdown of the costs so that the true costs that government incurs is shown?

MS. DOIRON: Are you suggesting that the portion that is paid by the seniors should also be shown? Is that what you're suggesting?

MR. DAVID WILSON (Glace Bay): As I said, I'm just curious.

MS. DOIRON: Well basically we can show that at any point and now that we have regulations that will require us to have the 75/25 split on an ongoing basis, our calculations are against that. So when you see the expenditures that we anticipate will be necessary for the Department of Health, then that for the seniors' program would be 75 per cent of the cost. We don't show in our budget expenditures the dollars that will have to be spent by the seniors themselves, but they're certainly easy to calculate and available.

MR. DAVID WILSON (Glace Bay): Let me go back a little bit to when I talked about some changes, and both caucuses have talked about some changes to the Seniors' Pharmacare Program for this year. With the changes that occurred this year - first of all, the $30 cap that is on the co-pay which has now been removed. That means that a senior who has a very costly drug could, hypothetically, pay out of his or her maximum allowable co-pay

ceiling, which is $382. That could be gone with just one visit to a pharmacy, depending on the drug.

The second change is that seniors can choose now one of two options. They can pay out the co-pay each time that they visit the pharmacy and the co-pay amount is 33 per cent of the prescription, or they can pay out that co-pay ceiling of $382 up front and also do it in quarterly or monthly instalments.

Now the issue that we find with that second option is that if seniors choose that option and don't meet this threshold in the program year - which is from April 1^st to March 31^st - then they don't get a refund on the amount. So right now, as the program is currently structured, seniors can choose to pay that $382 co-payment ceiling up front, as I said either in one payment or in quarterly instalments or monthly instalments, as long as it mirrors how seniors pay their premiums. Is that correct?

MS. DOIRON: That's correct.

MR. DAVID WILSON (Glace Bay): That's correct. Come March 31^st of next year, if we have a senior who has chosen that option and has not used all of the $382, this amount will not be reimbursed. Is that correct?

MS. DOIRON: That's correct.

MR. DAVID WILSON (Glace Bay): That's correct as well. Why could you not come up with a system that would enable seniors to carry that amount over into the next program year, as opposed to having what you could refer to as a "use it or lose it" policy?

MS. DOIRON: I will defer that question, please.

MS. SOMERS: I'm going to tie these two policy changes together because they are connected and it will lead to the answer to your question. In 2004, that was the time when we actually put the co-payment maximum on per prescription. It was put in place to help us and seniors extend their payments throughout the full year because they were having difficulty paying it up front.

[9:45 a.m.]

It did work but what happened was that there were a group of seniors who had just a very few high-cost prescriptions and their contribution to the program was no longer $382, it became $30 or $60. So there was a small group of seniors who were paying significantly less than was intended yet their drug costs were significantly high. So you could have two seniors living side by side and getting the same dollar value of drugs per year. One would pay

$30 or $60 and the other would pay $382. So it actually created an inequity in the system when we introduced that.

So we brought this issue to the seniors themselves. We brought it to the Group of IX because we thought we need to deal with this because also our revenue dropped by $1.3 million that year and with the way we're structured, seniors themselves would have to recover 25 per cent of that lost revenue. So the discussion was that we want to help seniors spread their costs but we do want seniors to equally contribute to the program if, in fact, they're getting a certain amount of drugs from the program. So that's when we started talking about co-payments - why can't we spread that co-payment cost out over 12 months?

So, in fact, they agreed that if we could put something in place that could spread their co-payments out, then we should eliminate that co-payment maximum per prescription. We brought to them the fact that we can do that. It is complicated to do this system-wise and administratively as well, but we could spread their costs out. We couldn't put a reconciliation feature in place for the first year and we wondered should we, in fact, do this because the very question that you asked, there's no reconciliation of why would anyone actually do this. The answer was, but there are a lot of seniors who can look back at their drug costs, they know they're going to exceed their co-payment max. We need to put something in place for those seniors.

So we did. We took a chance. We put this co-payment system in place for those seniors who can look back and historically see that they have exceeded their maximum. We are looking now at the uptake of this. We're going to evaluate it to see if seniors find this to be of value and we can put a reconciliation in place in the future. That's the past and the future of that policy.

MR. DAVID WILSON (Glace Bay): Would you explain that, just to get a little more detail - what do you mean? What are you going to put in place in the future?

MS. SOMERS: If, in fact, spreading the co-payments out makes sense to seniors, if the uptake is significant, then we can put system changes in place so that if, in fact, they overpay, it can be applied to next year or refunded. There are a lot of decisions that have to be made from a systems point of view and just from policy point of view, what happens to the leftover funds. So that's the piece that we're going to evaluate and try to figure out what is the next step related to this.

MR. DAVID WILSON (Glace Bay): You're saying that refund won't apply next year but it may apply the year after that?

MS. SOMERS: No, what we're saying is that we are going to speak to seniors about this option that we've just put in place. Has it succeeded in helping them spread their

payments out? Should we now take the next step and reconcile this or, in fact, are seniors not ever going to sign up for something like this?

MR. DAVID WILSON (Glace Bay): That's a good question. How many seniors registered to date have chosen that option? For instance, how many have chosen the option of paying the $382 up front?

MS. SOMERS: Approximately 3,000.

MR. DAVID WILSON (Glace Bay): In the information package that you put out, you said it's possible for seniors to have to pay more than $382 for reasons, for instance, if they decide to choose a brand name drug over a generic drug, or the drug or supply that seniors are prescribed cost more than the maximum amount that Seniors' Pharmacare will pay. What is the maximum amount that Seniors' Pharmacare will pay?

MS. SOMERS: The maximum amount that a senior would need to pay in co-payment is $382 but if the senior makes a decision to either request the brand name product instead of a generic product, or if they are prescribed a drug and there are certain additional amounts charged that are not benefits under our program, they may have to pay, or if it's not a benefit under our program. What we were trying to say is that there could be times when it is not a benefit, or if you want something different, you may pay more than the $382.

MR. DAVID WILSON (Glace Bay): To a maximum of?

MS. SOMERS: There is no maximum, no.

MR. DAVID WILSON (Glace Bay): There's none, okay. Thank you, Madam Chair.

MADAM CHAIR: Order, time has expired for the Liberal caucus. I recognize Mr. Bain for the PC caucus, you have 20 minutes.

MR. KEITH BAIN: Thank you, Madam Chair, and good morning to both. How does the Nova Scotia Seniors' Pharmacare Program stack up against similar programs in the Atlantic Provinces? Can you compare?

MS. DOIRON: Basically generally speaking, our program is one of the most generous in Atlantic Canada. The programs that are in the other provinces are reasonable but I think the generosity of our program is superior to all of the other Atlantic Provinces. Now Emily may be able to give a little bit more detail on that.

MADAM CHAIR: Ms. Somers.

MS. SOMERS: The program in Nova Scotia is the only one that caps the costs for all seniors. The other provinces may cap the costs for the GIS group, or they may cap a prescription cost but of the Atlantic Provinces, we're the only one that actually caps. So seniors know that they will not pay more than a certain amount under our seniors' program.

MR. BAIN: I'm wondering, would it be possible to find out what the average cost of prescription drugs for a senior would be if they weren't enrolled in the Pharmacare Program? Does that have any part in your determination of what the co-payments or whatever it might be? Is there an average cost that a senior in Nova Scotia would pay for their prescription?

MS. SOMERS: Under our program, the average cost per senior - the last time I looked - was about $1,600 per senior, is the average cost of drugs per senior.

MR. BAIN: So on the flip side, what would be the average cost to those who are enrolled in the program? I might be muddying the waters here because we know that there is a maximum, $382, but what in the overall picture, is it the $382 that is the average? Or is it lower or higher? Does that complicate the issue?

MS. SOMERS: Within our program there are some seniors who use a lot of drugs and some seniors who don't use very many drugs, so it is very much an insurance program. They pay a certain amount to reduce their costs downstream, and there are some seniors who pay a premium. So there are some seniors who will pay approximately $800 per year for coverage. If you are low income, you pay $382 maximum for coverage. But when you look at the drug costs under our program, those two numbers are not meeting the average cost per senior under the program. Of course, it wouldn't because the government pays 75 per cent of the cost and the seniors pay 25 per cent of the cost under the program.

MR. BAIN: Okay, so you're saying the actual average - the $382 is 25 per cent and the other is 75 per cent. The government is paying 75 per cent - the seniors' 25 per cent could be to a maximum of $382, am I correct?

MS. SOMERS: The structure of the Seniors' Pharmacare Program is such that at the end of the day the government will pay 75 per cent of the costs and the seniors pay 25 per cent of the cost. The seniors' cost is broken down into their co-payments and the premiums, so their piece of the equation is just dealing with 25 per cent of the full program costs. Am I clear?

MR. BAIN: I think I understand. You already explained the removal of the $30 cap on each prescription and why it was removed. I guess you're saying it's helpful to seniors now because it averages everything out - it's an equality and a fairness reason. Would that be correct in assuming that? I think you mentioned somebody could be paying $30 and they don't have a lot of drug usage but the next person who is paying the high amount is paying $30, the same as the person . . .

MS. SOMERS: That's right. So now we've made it fair, we believe, and with the introduction of the co-payment options, low-income seniors can pay $32 per month for coverage under the Seniors' Pharmacare Program. If you are paying a premium, the maximum monthly cost per senior is $67 a month. So low-income, $32 a month; high-income, $67 a month.

MR. BAIN: We've already gotten the explanation as to the $424 premium and the relationship to GIS and everything else and the $382 co-pay, as well as the various options. But what guarantee do we have that the rates aren't going to go up next year?

MS. SOMERS: There are never any guarantees that the rates are not going to go up because even though our cost of drugs is starting to - the rate of increase is slowing down, the costs continue to climb, so they are dropping. The huge cost here is drug costs. So over the last couple of years, we have seen a lot of big, generic products come to market, so we see a shift from the brand product to the generic product. That reduces our costs. We haven't seen any big drugs that are exciting, new molecules that are first in class. So no big blockbuster types of product; that has kept our costs down. Our prescription numbers are stable right now and actually our number of seniors, that number is also stable right now. So those are the factors we believe are keeping our rising costs down.

What we have to be prepared for, though, is the future and to design a program that is sustainable for the future as well. So as we see the population age and folks move into the 65-plus category, we know there are going to be significant increases in costs; not necessarily because these seniors are going to be taking more drugs, but because there are just so many of them. We also have to be prepared for some of the new, exciting research that is going on and be prepared to cover some of those drugs as they come to market as well. There has been a decline, and it has been across the country over the last couple of years.

Prior to that, our increases were at the 8, 9 and 10 per cent per year so it was very significant and we know that drug expenditures continue to be the number two cost in Canada, in health, after hospitals. So we need to be very careful about changing the structure significantly, based on the last two years of experience but we are watching that very closely. We have been able to keep the seniors' costs stable for this year and we have been able to put the co-pay option in place to spread their costs out over a year. We can't guarantee against increases but, for now, we are keeping things stable.

MADAM CHAIR: Ms. Doiron.

MS. DOIRON: I just want to add to that. While we say that the increases have slowed down to some extent, I will just basically put on the table that they are still significantly over the actual normal inflationary costs. So we say it has slowed down from 10 per cent, approximately, down I think this year to about 7.2 per cent. So we still have an issue in terms of the increasing cost of drugs. As we age more - and, as you know, we have a growing

number of seniors - typically, there are more prescriptions. So we certainly have concern about the way that the drug costs are growing and will continue to grow.

We also saw a little bit of slow down as well with some of the cancer drug increases because, generally speaking, drugs have been increasing at the rate of 9 or 10 per cent per year and now down to around 7 per cent. But cancer drugs have been increasing at the rate of about 25 per cent per year and there was also a significant drop in that this year, still expensive, it is still way more than normal inflation.

The area that is developing - and I think we have mentioned this before but I would like to put this on the table - the area that is developing which is a real challenge for us, and I think for all of Canada, is the development of all these expensive drugs for rare diseases. We have not yet found a way, in this province nor in this country, to try to deal with that. As you know, we have basically some agreed upon research with the provinces and Health Canada going on around the Fabry Disease drugs and we have the highest incidence of Fabry Disease in the country here in Nova Scotia. But once that research is completed, we don't have a plan for how we are going to deal with the continuation of supply of drugs to the individuals with that disease.

Similarly, there are other diseases which we are going to continue, I think, to see these types of drugs or enzyme replacement therapies come along for. So we have a real concern and part of our concern is actually the fact that right now we have not seen any willingness on the part of the federal government to step up to the plate in this particular area which we think is going to require the federal government participation if we are going to be able to truly supply drugs to these kinds of populations.

MR. BAIN: Thank you for that. I guess my next question will be, how many seniors do you estimate that are out there that don't have drug coverage?

MS. SOMERS: Seniors that don't have drug coverage. It's an impossible number to know. We know that, because I'm not sure I know exactly how many seniors are in the province and we know that some seniors are insured through other types of programs. I don't know the answer to that. We know we have 98,000 insured under our program and there's probably another 10,000 insured through either federal government or some other type of private coverage. But the gap between those two numbers and the number of seniors, I don't know what it is.

[10:00 a.m.]

MR. BAIN: But no doubt there are people out there with no drug coverage whatsoever? Would that be fair to say? Not that the opportunity is not there for them, but there are people out there?

MS. DOIRON: We can certainly look at the population numbers and try to make a calculation in relation to that to get the answer to your question, but I think we're going to find that probably is a fairly low number. The reason I say that is because given the volume of people we already have enrolled in our seniors' program, and the fact that anybody in the province who is on social assistance is also getting drugs that are basically not part of our seniors' program but provided through the Department of Community Services.

There are, I think, options for access for all seniors. Unless a senior just wasn't aware of any of them, it's unlikely that we would find many that would not have some kind of coverage.

MR. BAIN: I guess the same would apply to the senior who is not on any medication? Therefore the individual is going to say, I'm not going to bother to enrol in the program, I'm okay.

MS. DOIRON: Absolutely.

MR. BAIN: Not to say that in six months' time, that same individual might be running into some very expensive drug costs. Is it true that if you don't enrol this year, it costs more the following year? Is there a tie-in to that? Somebody mentioned it to me, I just didn't understand.

MS. DOIRON: There is a tie-in. If a senior says, I don't spend $800 or $900 on my drugs now so I'm not going to enrol, they can choose to do that. But if then they get into a position where they are receiving more drugs and it's more costly, and then they want to come in, there is a penalty - I believe they pay one and a half times the premium for the first five years that they come in. It used to be a lifetime penalty but that was changed a couple of years ago to be for a five-year period, similar to any kind of insurance plan. Sometimes you join, you take the risk as to whether you're going to collect or not, but we don't provide that option for people just to come in and out at will.

MR. BAIN: Thanks, I understand much better now. Could you explain the process from the time a drug gets on the market to when it's on the list of drugs covered? The steps that are taken.

MS. SOMERS: Sure. As soon as a drug is placed on the market, as soon as Health Canada gives us the notice of compliance, it can be sold in Canada. Immediately, physicians can prescribe it for individuals.

The process to get it on our formulary though - there are a number of steps that need to be taken. As soon as it's on the market, it goes to one of two expert advisory committees. We have a national expert advisory committee and an Atlantic Common Drug Review. Different types of products go to different committees. It goes one of these committees, these

committees are made up of experts in both drug therapy and evaluating the literature. They're made up of physicians, pharmacists, administrators, economists, ethicists - all of those types of people sit around this table, both at the national level and locally.

Their mandate is to make recommendations to the provinces as to whether they should or should not list a specific drug. Their reviews are consistent, they're of high quality and as soon as we receive a recommendation from one of these committees, we do a budget impact analysis and then we add it. Our policy is, if it is recommended by the national committee - if there isn't anything significantly different about the Nova Scotia environment and what they're recommending would not work in the Nova Scotia environment - and the budget is available, then we will add those drugs to our benefit list. If they say do not add this, then we do not add it.

MR. BAIN: Madam Chair, I'm going to share the rest of my time with my colleague.

MADAM CHAIR: Mr. Porter, you have until 10:09 a.m.

MR. CHUCK PORTER: Thank you and I apologize for being late as well. Welcome, to both of you. Just on that theme of drugs, my question I guess is the generic versus the brand name. I've always been interested, is there someone on staff at the Department of Health that says or recommends generic A is the same as brand name A? I mean I've got a little bit of experience in health care, we learned a little bit about drugs. If you pick up a package of generic and you pick up a package of brand name, you won't find too much in the way different, if anything. Are we promoting one over the other to a seniors' program?

MS. SOMERS: Yes, we are. In this province we have a committee that's called the Drugs and Therapeutics Committee. It is their job to determine that these drugs are in fact both bio-equivalent and interchangeable. So it is a committee of scientists that looks at the information. Health Canada produces some information and then our committee takes an additional look at some additional factors and declares a drug as being interchangeable. Once it's declared interchangeable, which means in the body these drugs will do the same thing, then we place it in our formulary. We create an interchangeable category to say that this drug has now been deemed equivalent to the brand name product and under our programs we will cover the cost only of the generic product. So immediately, if they are equivalent, we switch them to the generic product and we will pay up to the cost only of the generic product.

MR. PORTER: What makes the generic versus brand name more expensive or less expensive?

MS. SOMERS: What makes the generic product less expensive than the brand name product?

MR. PORTER: It's exactly the same drug, your scientists have already determined the same things are in each drug, so why is there a cost difference to begin with? Is it just the markup of the producer?

MS. SOMERS: The argument for the initial high cost of a brand name product, of course, is all the research and development that goes into bringing those products to market and the generic manufacturers do not have to do the same amount of research and development to bring them to market.

MR. PORTER: Okay, having said that, then we cover certain generic drugs which are the same as the brand name for the most part. What are we doing by way of Doctors Nova Scotia, or physicians in hospitals who take out that little pad and they're going to write a prescription, are they aware that we are, in fact, covering only - you know, are we updating them somehow as to what we're covering? I know when I go - and it doesn't matter if it's for me or one of my kids, whoever it is - the first thing the doctor will ask you if you need a prescription is, do you have a drug plan? Obviously, they're thinking about the cost. So are we saying to Doctors Nova Scotia, here's the drug that we cover and this is what you should be prescribing, or are we able to go that far?

MS. SOMERS: Well, we, first of all, send bulletins to the physicians in the province and to pharmacists in the province, updating them regularly on what products are added to the formulary and what new interchangeable categories we have added to our benefit list as well, but we've had a long-standing policy of promoting and using and only paying for generic products. The whole generic drug issue is fairly well accepted now. The science is fairly strong that these products are equivalent.

So in this province we also have the pharmacists - there is a regulation allowing pharmacists to actually, even if the doctor writes for the brand name product, they're allowed to dispense the generic product. So anyone under our program will get the generic product and we will only pay the generic price. So we have a system, unless there is a reason why someone cannot take it and it's well documented by the physician that for some reason they cannot take a generic product, we will cover the brand name product. That is very, very rare. So the policies that we have in place actually force folks to move to the generic products.

MR. PORTER: And the pharmacists do a very good job, or at least locally where I live.

MS. SOMERS: Absolutely.

MR. PORTER: A very good job of not only introducing you to the generic brand, but the documentation that comes with that is very detailed. I was kind of curious about that, as to how often they were doing that and how often we were switching. I don't know why, I guess if you could take the brand name and you couldn't take the generic name, given that

the same thing exists in the drug, any idea how many cases? You said they're rare. What's rare, you know, a case a year, 10 cases a year?

MS. SOMERS: Rare would probably be less than five cases a year.

MR. PORTER: Interesting. Just on the Seniors' Pharmacare Program, as well as our new program for all ages and everything, what are we doing? I mean I talk to a lot of seniors; some aren't aware of the program, for whatever reason. Are we sending things out to people when they're 64 years old saying hey, you're going to be a senior next year, this is what's available to you. At what point do we let seniors know that these options exist?

MS. SOMERS: We're hooked up with the Health Card system so three months before your 65^th birthday, a package of information is sent to all seniors and it has all of the information explained, what their options are, what the program is all about. So that goes out automatically, directly linked to the Health Card system.

MADAM CHAIR: Order, the time has now expired for the PC caucus.

The next round of questions will be 12 minutes per caucus. I recognize Dave Wilson with the NDP caucus. You have until 10:22 a.m.

MR. DAVID WILSON (Sackville-Cobequid): Thank you, Madam Chair. I want to go back again to the Seniors' Pharmacare Program and really spend some time here, what I have left, around how much it's costing seniors, how much it's costing the province and the government to implement this program. I know it has been brought up earlier in questions and I'm going to turn back to that right now, it's around the cost savings every year.

In the last three years the Seniors' Pharmacare Program has been able to save money. Three years ago it was $3.4 million, two years ago it was $8.7 million and last year there was - what I consider underspent - a saving of $9.3 million. Over seven years it was over $27 million. So that figure, that saving, does that come from what the government pays and the seniors' portion? So that's the 100 per cent, is it not? Is that correct?

MS. DOIRON: Basically the dollars are projected based on what we have experienced in costs for the past year. As we explained earlier, we don't always know when, for example, a generic product is going to come to market. So essentially that's generally what has been causing, over the last few years, savings that have been higher than our normal experience in the past, when we seemed to have such consistent growth in health care costs of 10 per cent or in excess of that.

Basically when we're looking at those savings, we're looking at them against the Department of Health budget, which would be the portion of the 75 per cent that we pay. But obviously if there's a change in the cost of the drugs, then the portion that applies to the 25

per cent that the individual is paying would also be affected if there's a change in the price of that drug generally.

So there should be a benefit to individuals, as well, in terms of what they end up paying. It should probably take them, then, a longer period of time to actually reach their maximum co-pay, for example.

MR. DAVID WILSON (Sackville-Cobequid): Maybe I'll be a little more clear. I just want to be correct on what I think and what I see with the figures. Last year, for example, the cost to government was $126 million, to seniors it was $44.7 million. So the total of $170.8 million was spent, the total program was spent. There was a saving of $9 million. So ultimately of the $9.3 million, 25 per cent of that came from the seniors, correct?

MS. DOIRON: No, we would not basically have the dollars that are spent by the seniors in our budget, so that's not reflected in our dollars at all.

MR. DAVID WILSON (Sackville-Cobequid): So the $170 million, 25 per cent of that is what the seniors paid, right?

MS. DOIRON: Yes.

MR. DAVID WILSON (Sackville-Cobequid): So that's the $44 million, correct?

MS. DOIRON: Yes.

MR. DAVID WILSON (Sackville-Cobequid): And the government paid $126 million. So the saving does reflect a savings on both the government and the seniors' portion, right? So that $9 million, 25 per cent of that came from seniors' premiums, correct?

MS. DOIRON: I believe that I'm correct in saying that if our budget in the Department of Health is $120 million in terms of the government's share of the program, then the savings that we are recognizing is against our budget, but I don't believe that we're incorporating, then, the total amount that's being paid by the public and showing those savings against the Department of Health budget, no.

MR. DAVID WILSON (Sackville-Cobequid): I would have to disagree. I don't think - I mean the total budget for the Pharmacare Program was $170 million, what you spent. You said you were going to spend $180 million in last year's budget. That's what we approved. So there was a saving of almost $10 million - $9.3 million - but in that number, in that makeup, the seniors' 25 per cent is in there, right?

MS. DOIRON: Yes, that's true. You are correct in that.

MR. DAVID WILSON (Sackville-Cobequid): Okay, so right there, over the last seven years, of the total $27.3 million that was saved in the Seniors' Pharmacare Program, 25 per cent of that came from seniors. So almost $7 million, almost $1 million a year, seniors are paying, in what I think is a taxing of a service, taxing the seniors, they paid $1 million extra than what was spent. Then you told this committee earlier the revenue that was saved goes into other departments within health care. So what I take from that is the seniors are funding $1 million a year of health care spending when they shouldn't be.

[10:15 a.m.]

We are looking at our seniors, the most vulnerable people, the people with fixed incomes, some of the lowest incomes in this province, are paying an additional $1 million over seven years, on an average, to fund who knows what - continuing care, infrastructure, medical equipment. Do you see where that reflects what is going on and what has happened over the last seven years?

MS. DOIRON: Yes, I believe I understand the point that you're making and I do appreciate the comments that you make. The guarantee that we've made is that we will split the program 75/25 and I think that's still consistent regardless of how the bottom line figures out at the end of the day.

MR. DAVID WILSON (Sackville-Cobequid): I just wanted some clarification on that.

So with the changes to the Seniors' Pharmacare Program, what was the cost-benefit analysis on this? Did you do that to project what the positive/negative impact was going to be with the changes in the percentage of co-pay that seniors were going to be paying?

MS. DOIRON: During the past number of years, it has been essentially an annual negotiation process in terms of how those dollars have been split and particularly over the past eight or 10 years, as there was an increase, in most years, that was significant. We were basically seeing some fluctuation in terms of how that cost-splitting was occurring with variation in terms of how that would impact the share that the seniors would end up paying. Essentially, in terms of attempting to kind of stabilize that for seniors, as well as for government, I think it was agreed that 75/25 would be a reasonable split.

I think at the beginning, when this program was envisioned, there was originally thinking that it would be a 50/50 split. That did not really remain effective for very long and I think the significant increase in drugs over those years, after the program developed, made it very difficult to transfer all of that burden to seniors. So it kept getting to be an 80/20, or a 66, or two-thirds/one-third and a variation across that. It was inconsistent from year to year. So I think the decision taken this year was to say that, in fairness, regardless of whether there are cost increases or slower growth, whatever the circumstances might be as we walk into

the future, at least there will be a sustained 75/25 split, and that seemed to be an approach that the seniors' groups appreciated and wanted to endorse. I think that gets us all the way from the struggle that went on every year in terms of the debate and the negotiations that were rather difficult for everybody.

MR. DAVID WILSON (Sackville-Cobequid): You mentioned the Group of IX endorsing the changes here. Through the material I read from last year, which we saw, I believe, a $24 increase in the co-payment, from what I've read, the Group of IX said that would be an additional burden on seniors when you did that. What I can't grasp is that we have 98,000 seniors involved in the Seniors' Pharmacare Program, and you times that by $24 - I don't know my math, but that's quite a bit of money - but yet we still saw a saving of $8.7 million last year. Especially since 2004, we've seen savings in the Pharmacare Program. Did we see an additional cost last year on the seniors and on their co-pay?

MS. DOIRON: Basically, Madam Chair, when we look at the experience from the past year - and this past year we were fortunate that there were several generic drugs that came to market and basically influenced that cost, that will then be calculated into what we look at relative to the following year's premiums and co-pays. Essentially this year, because of the benefit of those drugs coming on the market and those savings last year, even though overall the cost of drugs is increasing every year, this year there was no increase in cost for the seniors at all. I think that shows up basically then in terms of being able to understand year over year how we have tried to apply the benefit of those savings, particularly if they continue into the following year. So that's the position they were in this year to receive that benefit of no increase whatsoever.

MR. DAVID WILSON (Sackville-Cobequid): And that's kind of the point I'm trying to make here. We're talking about, as I said before, the most vulnerable individuals in the province, who are on a fixed income and don't see an increase, like myself or anybody else who works and gets raises every year or cost of living increases, but yet last year - and I did the math while you were answering my question - it's about a $2.3 million increase in revenue with just a $24 increase on co-payment.

So here we have seniors paying $2.3 million extra last year when we saved $8.7 million. So there's still millions of dollars being saved but yet we're still after seniors to fork more money out. I just don't understand and I can't grasp why a government would do that, why a government would say - I could see if we were in a deficit, like back in 2002 when we overspent almost $1 million. I could see that, I could understand that, taxpayers could probably understand that, and some seniors could probably understand that. But in the last three years we've seen some $21 million in savings, why we see increases, and now we see a change in the Pharmacare Program where potentially a senior on one prescription could use their whole premium or co-pay, I can't understand why we would do that, why we would put that added burden on seniors. I know I'm out of time.

MADAM CHAIR: Mr. Glavine, you have 12 minutes.

MR. LEO GLAVINE: Thank you very much, Madam Chair, and thank you to Ms. Doiron and Ms. Somers for being here today. While we do have some critical questions and comments to ask, I know this program is really a lifeboat for seniors. There are many who would just not make it without this program. So I think we need to recognize that right off.

In terms of just a few more questions around the Seniors' Pharmacare Program and then I was going to focus on the working Family Pharmacare Program. I was wondering with the Seniors' Pharmacare Program, how many drugs were added to the formulary in 2007-08 and how many were removed, because that again may explain some of the dollars we're talking about here?

MADAM CHAIR: Ms. Somers.

MS. SOMERS: I don't have the actual number of drugs. I can get that to you and I can actually tell you the recommendations that we have received from the expert advisory committee. Now, I can tell you that of all the recommendations that we have received, we have accepted probably 99 per cent of the recommendations. You see, when those recommendations come from our expert committee, we do a budget impact analysis and as long as we have budgeted that amount of money, which we have over the last several years, those drugs are added to our benefit list. So I can get you the numbers but I just don't have them at my fingertips.

MR. GLAVINE: In terms of the expert committee, is that set up just for this program, or would it also be the Family Pharmacare Program, or is it in relationship to our whole group that decides on what drugs will be covered by the province?

MS. SOMERS: This national expert advisory committee has been set up by the federal government and the provinces and territories to provide independent evidence-based advice to the provinces when it comes to listing drugs. So that's set up for the provinces to use for every one of their programs as they wish.

MR. GLAVINE: Earlier you did state that, of course, seniors can access the Family Pharmacare Program if they so wish. I'm wondering what the difference in coverage between the programs would be because this is what caused some of that real tough decision making when both programs were there as options to join.

MS. SOMERS: The difference in drug coverage, the difference in the drugs that are actually benefits under the programs, there's no difference between the benefit list for Community Services and the benefit list for Family Pharmacare. It is the same list that we use.

For seniors there are some tiny, tiny, little differences that are really insignificant. The benefit list, for all intents and purposes, is the same for seniors and under Family Pharmacare.

MR. GLAVINE: Okay. I was wondering, how did you inform seniors of the differences between the two programs? It did cause real consternation among seniors with the way it was presented.

MS. SOMERS: We spent a lot of time communicating Family Pharmacare. We put together an extensive communication plan and spoke to many, many different groups of people. We sent out information packages to physicians, to pharmacists, to MLAs. I think we did quite a good job at communicating Family Pharmacare.

It is far more difficult to communicate Family Pharmacare to seniors who are used to using Seniors' Pharmacare, and that has been a challenge and continues to be a challenge.

To be honest, we want seniors to make their own decision about which program to choose because there are differences, there are quite significant differences in what they will pay if they get hit with a significant drug cost. So we put information in the package that was mailed out to seniors that seniors can actually join Family Pharmacare, but we encourage them to talk to our customer service representatives to understand the differences between the two programs.

MR. GLAVINE: During the election campaign, the last election, this Family Pharmacare Program was pegged at $75 million. According to an article on November 27, 2007, the full cost when the program is up and running is estimated to be about $50 million. So I'm wondering why that discrepancy was presented to Nova Scotians.

MS. SOMERS: The $75 million, as I recall, was total program cost. That was not considering a contribution from people who would join the program. The $50 million is our estimate that at the end of 2010, we expect our cost to be $50 million for this program. So it was just - and then we also had to do some analysis around what the contribution would be and we refined our models to the point that we're at right now.

MR. GLAVINE: So in terms of a budgeting perspective, are you planning to follow the same process whereby the total budgeted amount, in this case $50 million, includes both the cost borne to the government and the cost to working families? Is the $50 million going to be including both? Or are you going to distinguish what will be paid by government and what will be paid by families?

MS. SOMERS: This program is a little bit different but we will be distinguishing between - there will be a total drug cost always estimated for this program and then we will

do some estimates on what the cost will be to folks who join the program, but separate out the government cost from that.

MR. GLAVINE: So then, anticipated costs that are being borne by working families, through the 20 per cent co-pay and the deductibles, what are you anticipating that amount to be, based on the early going?

MS. SOMERS: Right now we're getting some early experience with the program.

MR. GLAVINE: Yes, so I'm just wondering, what would you anticipate for an annual amount that families would actually be paying in? Each family will pay a different amount because it's based on income.

MADAM CHAIR: Ms. Doiron.

MS. DOIRON: I guess to give a flat cost, in terms of what it would cost the family, would have to be worked out against the actual income of the family that would be involved. So the amount that the family would be paying, of course, does vary. It's unlike the Seniors' Pharmacare Program where the premium and co-pay are specific amounts that don't change during the year and basically are set on an annual basis and therefore are known. The amount that any family would pay would certainly be based both on their income and their utilization level within the program itself, so you can't come up with one figure that would apply.

MR. GLAVINE: So there really isn't a projected amount that the province would actually be putting into this program at this stage?

MS. DOIRON: There is a projected amount - I think Emily has those figures in front of her - given that it's so new, we're not sure if what we've projected is actually going to be correct. So we'll have to take a look at the way this program develops.

[10:30 a.m.]

With any of the programs we've introduced - whether it's this one or the diabetic program or others that we've introduced over time - what we have seen is that there seems to be a period of three to five years before we get to the maximum uptake of the program. We would basically show expectations that we'd have lower uptake this year than we would expect to see three to five years out. But Emily, I think, has some figures that are projected for this year.

MADAM CHAIR: Ms. Somers.

MS. SOMERS: Yes, I have the numbers here. What we're projecting for next year is that the drug costs under Family Pharmacare will be $57 million. We're expecting that,

based on our estimates of income and drug use and enrolment, that $27 million of that will be paid by Nova Scotians and the remainder will be paid by government, so it will be around $30 million.

MR. GLAVINE: Okay, so to drill down then in terms of some specifics on the coverage in relation to their costs, are there certain drugs not being covered under the working Family Pharmacare Program because of their costs, for example?

MS. SOMERS: The benefit list under Family Pharmacare is the same as Community Services Pharmacare. We have not rejected any recommendation from our expert advisory committees because of cost. We are getting recommendations that say, do not list this drug because it is not cost effective and we are following those recommendations, but there hasn't been a recommendation that we received that said add this product and we made a decision not to because of the cost.

MR. GLAVINE: So all of the recommendations would be coming from the expert committee that would be on that list and available to Nova Scotians?

MS. SOMERS: Yes.

MR. GLAVINE: Okay. Is there a separate committee that determines which drugs make the working Family Pharmacare list and, if so, what criteria are they using?

MS. SOMERS: No, the same committee makes recommendations for seniors and for Community Services and for Family Pharmacare.

MR. GLAVINE: Thank you. How do working families know when they are prescribed a drug whether it's covered or not? I mean, is that going to be an issue for some time here, I would think, with a new program?

MS. SOMERS: The list of drugs are on our Web site. I know not everyone has access, but there is a searchable formulary on our Web site. Every pharmacy has a copy of our formulary and has access to that information as well. And, of course, we have our 1-800 line where you can call and see if a drug is a benefit under a program. We try to keep physicians informed as well what drugs are benefits under our formulary.

It isn't easy, I know, to keep that kind of - there are something like 3,600 or 3,700 drugs on that list, so you do need to refer to a comprehensive source of information and that is our Web-based formulary and the list that we send to pharmacists.

MR. GLAVINE: The last statistics that we checked were April 3, 2008 - 5,833, representing about 8,900 individuals, had signed up for the working families program. When the program was announced, government claimed that it could impact on 180,000 Nova

Scotians who did not have drug insurance. I'm just wondering, over the last month, are we seeing a gradual trend developing that will move in that direction?

MS. SOMERS: Yes. Right now - we just checked on those numbers - we have more like 9,800 families, close to or about 15,000 individuals, under the program now. What's interesting is those who are enrolling are the groups we feel will benefit the most from the program in that they have higher drug costs, they are lower income and actually many of them are between the ages of maybe 50 and 65 - a group that we identified were in need of coverage and it was not available in Nova Scotia. So what we think is that even though we are at about 20 per cent of where we believe our enrolment should be, we believe we are hitting the groups that will benefit the most from this program.

MADAM CHAIR: Order. I'm sorry, the time has now expired for the Liberal caucus. I would like to recognize Mr. Porter. You have until 10:46 a.m.

MR. PORTER: Thank you, Madam Chair. I just want to pick up where we left off. I asked a question about educating our seniors as we approach their 65^th birthday. You told me three months prior to, you send out the necessary information to advise them of what is available. I will ask this question - but I am assuming the answer is yes - are we now sending out both packages, the Family Pharmacare plan that they have an option for as well as the Seniors' Pharmacare plan, or are we strictly doing the seniors'?

MS. SOMERS: We are sending out strictly - it is the seniors' package but we are sending out, in that, brief information on the availability of Family Pharmacare and, if they want additional information, to make the call.

MR. PORTER: Just on that, I have heard others talk about there are seniors maybe who don't use that many medications, aren't on any or whatever, who opt out altogether, don't take the plan. But still, somewhere down the road, once they had the option of this 65^th birthday come along they say, no, I'm doing really good. I'm not going to need this plan, so why should I bother enrolling to buy the odd package of Aspirin? That's fine. There is still a "penalty" - I believe was the word the deputy used - there at some point to come in. Why is there a penalty that exists, is sort of what I'm curious about. That has been one thing that I have been questioned on with a couple of seniors I have dealt with. For whatever reason - one example was the senior said I never got the package, and I suppose that could happen, unless the mail is signed for or something that would happen on occasion. Why is there a penalty in place?

MS. SOMERS: The Seniors' Pharmacare Program was designed like an insurance program, so you pay now to avoid huge costs in the future is sort of how it was designed. It was also designed as a program where the cost is shared between the senior and the government. So if everyone waited until their drug costs were significant before they started paying into the program, there would be concerns about being able to afford and sustain this

program over time. So it was simply to encourage seniors to become part of the program early. So we have some folks who might get $10,000 worth of drugs out of our program. We cover those costs. We have others who may not use the program for a year, but it's all about pooling our resources so that we can actually cover off the very high costs when those high costs occur.

MR. PORTER: Just on that then. You said three months prior to, you send it out. Does that mean they have to be signed up so that there is no late fee - I guess I will call it for lack of a better term - or a penalty by their 65^th birthday? If they are a week over their 65^th birthday, are they penalized?

MS. SOMERS: We are fairly flexible with seniors. We give them time to understand the information. If it's a week beyond, we are reasonable about that. If it is six months later, then we would need to apply the penalty.

MR. PORTER: Is the penalty in full or is it six months, just as an example? I know that some have gone over. If it is six months into this late area, late fee, do you apply the full figure or is there just a flat figure regardless of how much time? Once you have decided you're going to have to charge the senior the late fee, it's $50 or whatever it is . . .

MS. SOMERS: It's one and a half times whatever their individual premium is, because that is based, too, on income, so it's one and a half times the premium for five years.

MR. PORTER: So there is not flat fee, it is just based on that formula?

MS. SOMERS: Yes.

MR. PORTER: We talked a little bit about the formula for coverage, 25/75. I'm kind of curious - certainly it would be wonderful if the government could cover 100 per cent of the cost in all of these programs - if we were to cover the seniors, just as an example, 100 per cent, what would the cost be, any idea?

MS. SOMERS: The seniors' program, we are estimating this year, the full total cost will be $178 million.

MR. PORTER: It's $178 million, of which we cover 75 per cent?

MS. SOMERS: The government pays 75 per cent, the seniors pay 25 per cent. So if government was to pay the additional 25 per cent, that would be an additional $46 million.

MR. PORTER: Where would that come from? I think that is a pointed question. I guess my question to you is would we have to cut other programs or reconsider what we are going to offer within the Department of Health?

MADAM CHAIR: Ms. Doiron.

MS. DOIRON: I would assume that government would have to make a decision about where to pull those dollars from because I think at the present time we would not have the revenues to cover that off and, consequently, we'd either have to take it from other parts of the health budget or from other departments of government.

Given that the Health Department is already spending, I think it's about 42 per cent this year, 43 per cent of the total budget of government, I think they would be finding it very difficult to go to other program areas to try to get these dollars.

We're also growing the health care expenditures to a large extent because of other initiatives, and particularly with the Continuing Care Strategy and the plan for new beds coming on stream next year and the year after there will be considerable growth of the health care budget to accommodate that. So if we were to add significant additional dollars, such as you are mentioning from the Pharmacare side, it will be very difficult to imagine where those dollars will be found.

MR. PORTER: And on that 42 per cent, as we know, it is fairly significant - it is over $3 billion.

In comparison to other jurisdictions, even within our own country, looking across the country, other provinces - I know that the ministers meet on occasion and I'm sure that Pharmacare is something that is discussed quite often - where do we fit in coverage across this country when it comes to two things: one, Pharmacare; and the other being 42 per cent of our provincial budget annually going into one department such as health care?

MS. DOIRON: Basically I think that in terms of the total amount of dollars that are spent on health care, we're generally in a similar ballpark with other provinces - so in every province there has been a growing percentage of the total dollars that have been expended in health.

In some provinces it is maybe a percentage or two less than it is in this province, but in other provinces it is as much or more - so we would probably be in the top one-third of the provinces, I would think, in terms of the percentages being spent on health care.

Basically the increases we've had in the last couple of years - while they still have been up in the order of somewhere around 7 per cent, that has been referring to the total increase in our budget which includes new programs such as the Family Pharmacare Program introduced this year. So if you actually look at the year-over-year costs without the addition of new programs, our actual growth in our health care budget has been reduced somewhat from what used to be somewhere around 7 or 8 per cent, down to 4 to 5 per cent for year over year. It's the new programming that is still keeping us up in that 7 per cent category. So I'd

like to kind of point out that variation because you have to kind of compare apples to apples, I guess, when you're starting to look at comparison of one budget year here to another, or comparing our budget to another province you'd need to kind of take a look at the year over year versus what actual new spending is actually occurring.

In terms of how we fit with the Pharmacare Programs, I'm going to get Ms. Somers to give you a bit more information on that.

MADAM CHAIR: Ms. Somers.

MS. SOMERS: It's difficult to compare programs for seniors across the country because they're all designed a little bit differently. In some ways, ours would be better; in some ways, someone else's would be better. I think generally, as far as the drugs we cover, they're the same. We cap the cost to seniors, that's a great benefit. Some provinces do; some provinces don't. Some provinces actually have - seniors do pay less in certain provinces. So my thinking is that we are probably in the middle of the pack. We're not the most generous, but we are certainly not the most expensive either, and it's a fairly comprehensive program as well.

MR. PORTER: Thank you. I know I'm running a bit short on time, but how many other provinces in this country offer the kind of coverage - we offer coverage for all groups now, all Nova Scotians, how many other provinces in this country do that?

MS. SOMERS: There are now - and, again, the design of Family Pharmacare and the design of universal programs are very different across the country, but P.E.I. and New Brunswick are the only two provinces left that don't offer some type of universal coverage.

MR. PORTER: Thank you. Deputy, just one more question to you. You talked just a few minutes ago about the increase in the percentages and one or two per cent in some years, four or five per cent, that's very significant when you're talking $3-plus billion, but you mentioned some of the other things that are yet to come on stream. What will that mean for percentage in next year? Any idea on the growth, or will there be growth?

MS. DOIRON: Basically next year, the next fiscal, we will probably be starting to open some of the new long-term care beds. I don't know the percentage at this point that's going to add to our budget, but there will be a considerable number of thousands of dollars, millions of dollars, that will result from that. The following year - by basically the end of March in 2010 - we're anticipating that just about all of the new beds will be open. When they're fully on stream, that's going to add in excess of $100 million to the budget of the Department of Health - so I guess that would be $100 million as a percentage of what is currently a $3.2 billion budget.

[10:45 a.m.]

MR. PORTER: Thank you very much. I guess that would be all the questions I have for now.

MADAM CHAIR: At this time we would invite the deputy to make some closing comments.

MS. DOIRON: Thank you, Madam Chair, and members as well. We certainly appreciate the questions and I find that when we come to the Public Accounts Committee there usually is some kind of information or suggestions that come our way that are often helpful as well. I recognized a couple of those today that we will take back and look at within the department. I guess we all recognize that drugs, the pharmaceuticals, play a very large part in our lives these days, and certainly as we become more aware of the kind of illnesses that are now treated with medications - and that seems to be continuing to grow - we probably will anticipate that we will be seeing some continued growth in costs, as well as utilization, in this area.

It's a very important area because, as you know, we are trying to pay much more attention these days to the whole management of chronic diseases and basically as we become more middle-aged, and older age, chronic diseases and multiple diseases with individuals are fairly common. So I think that the complexity of this area and the growing need that we have to be able to manage these multiple and complex chronic diseases with medications does make it possible for us to maintain a healthier state for a much longer period, and we want to make sure that, as a department, we're contributing to that whole picture and not simply just looking at this as drugs for a specific disease. That this is truly a contribution to the health and wellness of the individual and to the population and to try to, despite the demands and the costs and the growth, make it as available and as accessible and as affordable as we can.

But I think this will continue to be a challenge. As the questions here have indicated today, it's one I think that we'll all be paying very close attention to as we continue down the road with our growing numbers of seniors as well. So we thank you for the invitation today, and we will attempt to provide any of the information we didn't have available when we arrived.

MADAM CHAIR: It was very much appreciated that you were here today and, in particular, I would like to thank Ms. Somers on behalf of the committee. Given that you had to rearrange your schedule to accommodate ours, that was very much appreciated. So thank you very much.

At this time we have a couple of short items of business that I think we can do relatively quickly. Firstly, the subcommittee has met and has a report which contains two

pieces. The clerk is circulating some documents that the subcommittee reviewed with respect to the Nominee Program. These documents were documents that members of the committee had brought forward around the time that Economic Development was in front of us. The committee reviewed these documents and are recommending to the full committee that they be tabled and released publicly.

MR. COLWELL: I would so move.

MADAM CHAIR: So there's a motion on the floor that these be tabled and moved. Discussion, Mr. Steele.

MR. GRAHAM STEELE: The documents that have been circulated partly include the documents that I released during our last session on immigration which weren't confidential material anyway, so I'm not sure why we're approving their release when they're already out in the public domain.

MADAM CHAIR: I don't think the entire package contains documents that were tabled publicly. They are partly so, so this is why we're doing it and we're advised by Legislative Counsel that we should use this procedure. So that's why we're doing it. Any further discussion?

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

The other part of the subcommittee report is the list of witnesses and topics. Mr. Colwell.

MR. COLWELL: Yes, Madam Chair, you may hopefully recall that I spoke to you about the June 4^th meeting, relocating that or changing that date. We will be out of town on that date.

MADAM CHAIR: Yes, that's right. I'm sorry, I'm glad you mentioned that, I had actually forgotten about that.

So can we approve this list of topics at least in principle, and we'll allow the clerks to negotiate any necessary movement. For example, it may be possible for the South Shore Regional School Board to come in on Wednesday - it may not be as well, but we will look into that and we will inform people of that, if that's agreeable with the members.

The other thing I would like to point out to members is that I've had an opportunity to speak to Mr. Lapointe with respect to his report on the Nominee Program. What we're proposing to do, with the agreement of the members, is that we will have at 8:30 in the

morning, let's say, a half hour meeting where the actual report will be distributed to members but embargoed for an hour. The Public Accounts Committee will then meet at 9:30 a.m. in camera with the Auditor General, to answer any questions and then we will do a public session.

The Auditor General has indicated that he does not think it will take that long to be in camera, probably a half and hour or so, maybe a little longer, and his report will be released when we're in camera. It will be released publicly. So that's the procedure that we're proposing, just so you're aware of that.

Is there any further discussion? Mr. Colwell has moved, then, these topics on behalf of the subcommittee.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

I think the only other thing is, I would like to move that the information that was made reference to during the questioning here today be formally requested from the Department of Health and the clerks will follow up on that. So that's a motion. We've decided that we'll formalize that in each meeting. Are there any questions or discussion? I'll call the question.

Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Finally, I would ask the members to make decisions with respect to the Yukon Public Accounts Committee Conference as soon as possible, through the clerk, because they are helping us get in place our travel plans if people are attending the annual Public Accounts Conference.

So with that, we stand adjourned. Thank you.

[The committee adjourned at 10:54 a.m.]