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National Pharmacare: Who, What, Why?

Reading Time 3 minute read


Life Sciences Bulletin

Who? At the beginning of June 2015, at least eight (8) provincial ministers of health met to discuss a national drug plan along with academics and other experts. The federal Minister of Health, Rona Ambrose, declined an invitation to attend.

What? A national drug plan could mean a single payer, universal public drug coverage system or alternatively, it could involve implementation of hybrid private-public drug coverage, as is already the case in Québec.

Why? A national drug plan may be a way of increasing efficiency and preventing duplication across the provinces, while also saving money by having a better negotiating position due to economies of scale.

In fact, a number of recent studies[1] suggest that Canada could save as much as $11.4 billion on the annual prescription drug bill if it replaced the current "patchwork of private and public plans" with a single, national plan. 

Currently, provincial drug benefit programs are not fully harmonized. Rather, they are a hybrid of public and private drugs plans that operate independently of each other.  Each province and territorial government offers a public drug benefit plan for eligible groups.  Some are income-based universal programs.  Most have specific programs for population groups that may require enhanced coverage for high cost drugs.  These groups include seniors, recipients of social assistance, and individuals with diseases or conditions that are associated with high drug costs.

In addition, the federal Government provides prescription drug coverage for about one million Canadians who are members of eligible groups, such as First Nations and Inuit, members of the military, veterans, members of the RCMP and inmates in federal penitentiaries.

Moreover, the majority of Canadians are covered by various private insurance plans, most commonly offered through employers.

As a result of this patchwork, in recent years, various initiatives have been undertaken to harmonize provincial drug benefit plans, e.g. the creation of the Pan-Canadian Pharmaceutical Alliance (the "PCPA"), which conducts joint provincial/territorial negotiations for brand name drugs in Canada.  The stated goal of the PCPA is to achieve greater value for publicly funded drug programs and patients.  All brand name drugs coming forward for funding through the Canadian Agency for Drugs and Technologies in Health ("CADTH") national review processes are now considered for negotiation through the PCPA.  To add to this national initiative, Québec - who was traditionally reluctant to participate - recently announced that it plans on joining the PCPA.

The potential to negotiate as a bulk buyer with drug companies is one step towards harmonization. Nevertheless, Canada remains the only OECD country with universal public health care that does not also have a national drug insurance plan.

Some are therefore calling for the idea of a national program to be a federal election issue.  The Green Party recently announced its National Pharmacare Plan and the NDP has called for a comprehensive national pharmacare program and a national pharmaceutical formulary.

[1] See for example, Morgan et al. "Estimated cost of universal public coverage of prescription drugs in Canada", Canadian Medical Association Journal (2015); Marc-André Gagnon, "A Roadmap to a Rational Pharmacare Policy in Canada," (Ottawa: The Canadian Federation of Nurses Unions, 2014); Morgan, Daw & Law, "Are Income-Based Public Drug Benefits Programs Fit for an Aging Population?" Institute for Research on Public Policy

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