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Enhancements to Program Make Drugs More Affordable With the introduction of a major enhancement to the Newfoundland and Labrador Prescription Drug Program (NLPDP), the Williams Government is making drugs more affordable for residents of Newfoundland and Labrador. The Honourable Ross Wiseman, Minister of Health and Community Services, today provided details of a new program enhancement to the NLPDP which will assist individuals and families with high drug costs. Once fully implemented, the program enhancement will benefit approximately 14,400 additional families at a cost of approximately $17.5 million annually. This enhancement to the NLPDP will come into effect in October 2007. The goal of the program enhancement is to protect any individual or family whose drug costs are consuming an unreasonable share of their income, be it from a combined cost of using drugs for several common diseases, or one extremely high cost drug for a less common or rare disease. This would include such diseases as arthritis, cancer, diabetes and multiple sclerosis. "We recognize and are very sympathetic to individuals and families who struggle to afford the high costs of drugs and are cognizant that these costs place a heavy financial burden on people," said Minister Wiseman. "In last year�s Budget we introduced a new program to help individuals with low incomes afford the cost of their drugs. We have now taken the next step by addressing the needs of individuals requiring costly drug therapies to maintain their health. "This program enhancement is not based on age or disease, but is designed instead to assist people based on the cost of their drugs and their ability to pay. It is consistent with the approach taken by other provinces in the country, where residents are required to pay a portion of their drug costs usually based on their level of income. It is also consistent with the discussions occurring nationally regarding catastrophic drug coverage. Through this new approach we will be treating all residents fairly, and ensuring that we provide coverage for our most vulnerable residents." Through this enhancement to the NLPDP, individual families will have their annual out-of-pocket drug costs capped at an amount not exceeding 10 per cent of their net family income. Those at net incomes up to, but not including, $40,000 will pay a maximum of five per cent of their net income; those with net incomes of $40,000 to under $75,000 will pay a maximum of 7.5 per cent; and, those earning $75,000 to under $150,000 will pay a maximum of 10 per cent.
As an example, a couple without children with a net family income of $45,000 and annual drug costs of $12,000 is currently not eligible under the Newfoundland and Labrador Prescription Drug Program (NLPDP) and have no private insurance. Under this new enhancement, their new drug costs would be capped at 7.5 per cent of their net income, or $3,375 a year. Government would pay the remaining $8,625. Example 1:
"We have increased the annual investment in the NLPDP by almost 55 per cent since forming government, from $97.5 million spent in Budget 2003 to $151 million budgeted for the program this year," said Minister Wiseman. "This significant increase includes the introduction of the Low Income Drug Program in January 2007, already benefiting 18,500 residents of our province, which represented the first expansion to the program since 1980." The Low Income Drug Program (LIDP) provides drug coverage for families with children with annual household incomes up to $30,000, to couples earning up to $21,000, and to singles earning up to $19,000 a year. The program includes a co-payment ranging from 20 to 70 per cent of total drug costs. Under this enhancement, individuals currently receiving benefits under the LIDP may receive further benefits, resulting in further savings to them, if their co-payment amount for their drugs exceeds five per cent of their income. Similarly, current beneficiaries of the Senior Citizen�s Drug Subsidy Program, who spend more than five per cent of their net income on their current co-pay will also benefit due to the program enhancement. As an example, a single individual with a net income of $18,000 and annual drug costs of $6,000 is currently covered under the LIDP but has no private insurance. This individual currently pays $3,702 of her/his total drug costs (61.7 per cent co-pay). Under this new enhancement, her/his expenses for covered benefits would be capped at five per cent of her/his income, or $900 a year, for a further savings of $2,802. Government would pay the remaining $5,100. Example 2:
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BACKGROUNDER Newfoundland and Labrador Prescription
Drug Program (NLPDP)
The Newfoundland and Labrador Prescription Drug Program provides assistance in the purchase of pharmaceuticals, and some related medical supplies to residents who quality for benefit coverage. The focus of the program is that residents of the province should not be denied access to health care because of financial need.
The NLPDP comprises four programs: NLPDP is evidence-based in its approach to benefit
coverage. It employs the use of arms-length expert committees to review
the evidence of effectiveness and cost-effectiveness on drug therapies.
This enables informed decision-making by government regarding the
coverage of therapies that rely on the expenditure of public funds. Rationale for Program Enhancement Despite current coverage, and recent expansion, there
were some individuals who still struggled to afford high drug costs
associated with medications they needed in order to maintain their
health. In its analysis, government focused on the principles of
transparency, fairness, affordability, and accountability. It was determined that an income-based assessment
would be the most appropriate approach to assessing people for coverage
under the extreme circumstances they face. As such, a financial
assessment process was developed that would result in one income-based
test to determine coverage and extent of coverage. This enhancement will
see an individual/family�s contribution to their drug costs capped to
the level of: This approach is equitable for all residents. It is not age, gender or disease-specific. The goal is to protect any individual or family whose drug costs are consuming an unreasonable share of their income, be it from a combined cost of using drugs for several common diseases, or one extremely high cost drug for a less common or rare disease.
Application Process To be eligible for coverage, there will be an
assessment process. The assessment will be based on an application
whereby a family�s income is provided, as well as documentation
regarding their annual drugs costs. As with the current Low Income Drug
Program, these applications will be processed by the Stephenville Office
of the Department of Health and Community Services, where their income
information will be verified through a confidential information sharing
arrangement with Canada Revenue Agency. Drug cost information will be analysed through a joint
process between the department�s Stephenville Office and the
Pharmaceutical Services Division. Once both elements are confirmed, a
co-pay will be established for each individual/family so that their
annual out-of-pocket drug costs are kept at the percentage appropriate
to their family income. Their maximum co-pay will be calculated based on
their income and drug costs using the following formula: (Line 236 income * percentage contribution)/annual
drug costs
This enhancement is estimated to benefit approximately 14,000 families in Newfoundland and Labrador. A significant number of these families currently do not have any public or private drug coverage. However, it will also benefit other families who are now covered under the Low Income Drug Program, the Senior Citizens Drug Subsidy Program, or various private insurance programs, whose co-payments result in out-of-pocket payments above the set limits of income under the enhancement to the NLPDP. Provincial Comparison Across the country, the extent of public drug coverage for individuals with high drug costs relative to their income varies considerably. From Quebec to British Columbia, all residents have access to public or private drug coverage. The extent of coverage in these provinces is largely relative to income and there is varying use of premiums, deductibles, and co-pays. For example, Alberta has a premium-based program for its �working population�, where a premium is paid quarterly, and may be subsidized partly for lower income families. In Saskatchewan, its working population is eligible for coverage, with their co-pay set so that during a year they pay 3.4 per cent of their adjusted income. This type of coverage is not present in the Atlantic Region at this time. Varying programs exist but target only certain populations. Example: Consider an annual family with a net income of $35,000. This is a hypothetical Newfoundland and Labrador couple with no children, one of them has asthma and the other has epilepsy and high blood pressure. Their total drugs costs are $6,000 a year and they have no private insurance. In Newfoundland and Labrador, this family�s annual out-of-pocket expenses under the new enhancement would be capped at $1,750. If you compare this to the rest of Atlantic Canada, the family would pay the total cost of their drugs ($6,000). The target date to implement this enhancement to the NLPDP is October 2007. Media contact: 2007 04 23 11:30 a.m. |
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