Tuesday, March 06, 2018

How much will universal pharmacare cost Canada?

Since the Liberal government uttered the word "pharmacare" during the recent federal budget, there has been renewed interest in the whole idea of universal pharmacare in Canada, something that has been under discussion since at least the 1940s.
As is noted almost every time the matter is mentioned, every developed country in the world that has a universal healthcare system also has universal drug coverage - except Canada. The 1964 Hall Commission, that led to public healthcare in Canada, also recommended that universal pharmacare be inplemented right after the most pressing needs of universal hospital and medical care, but somehow it just never happened.
Currently, we are left with threadbare patchwork of private and public provincial drug insurance that has been tinkered with ad nauseam over the years (the latest such being the Ontario Liberals' extension of free drug-care for under-25s), but never overhauled in any systematic way. Even the federal Liberals' latest announcement is actually only for the creation of an Advisory Council on the Implementation of National Pharmacare, i.e. the first step of many, i.e. in a word, studies.
Study after study has already shown that a national pharmacare program could yield significant savings through better bargaining power from a national insurer (the most recent such study, by the Parliamentary Budget Officer in 2017, suggested possible savings of $4.2 billion on the $28.5 billion annual bill for drugs nationwide, but other studies have indicated potential savings of up to $11 billion). Yet another study suggests that some 700,000 Canadians skimp on food in order to pay for drugs - about the same number that have no drug coverage at all, either public or private. So, we are not short of studies.
The main sticking point in introducing pharmacare has always been the reticence of the federal, provincial and territorial governments to absorb the costs (which would require increased taxes), many of which are currently borne by private insurance. But how much would it cost us taxpayers to actually implement universal pharmacare in Canada?
Part of the problem in answering that question lies in the complex nature of the patchwork of public and private plans it would replace. And part of the problem lies in the fact that there are different solutions available, from a simple(!) patching of some of the cracks in the current system (e.g. for low income workers, the self-employed, some seniors, etc), to direct subsidies to those who cannot afford private insurance plans and are not covered by existing plans (this is the approach currently being taken in Quebec, for example), to a complete national plan that covers everyone (which, among other things, would involve a large-scale shift of costs from the private to the public sector). That, and the substantial but still uncertain nature of the possible savings and efficiencies which will/might come with a national pharmacare plan, make the specification of a dollar figure very difficult to achieve.
Hopefully, that is exactly what the grandiosely-titled Advisory Council on the Implementation of National Pharmacare will tell us. But this will be a huge, multi-year undertaking, so don't hold your breath.

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