Universal pharmacare would save Canadians $4.2B a year, parliamentary budget officer says

Establishing a universal program for prescription medications would amount to about $4.2 billion in savings annually in Canada, the parliamentary budget officer says in a new report.

New estimate of the cost to the federal government for a universal drug program points to overall savings

One argument for a universal drug plan in Canada is that people are less likely to take their prescribed medications when they can't afford it. (Jacques Boissinot/Canadian Press)

Establishing a universal program for prescription medications would amount to about $4.2 billion in savings annually in Canada, the parliamentary budget officer says in a new report.

The report, requested by the House of Commons standing committee on health, was released Thursday.

It provides estimates of the cost to the federal government for a national pharmacare program based on the list of drugs publicly covered in Quebec.

The office estimates roughly $28.5 billion was spent on prescription drugs in 2015-16, and $24.6 billion of that total would have been eligible under a pharmacare program.

When Paul Scott was diagnosed with kidney cancer, he and his wife, Marianne, initially worried about how they'd pay for his medications. (CBC)

"After accounting for pricing and consumption changes, PBO estimates total drug spending under a national pharmacare program would amount to $20.4 billion, if implemented in 2015-16," the report's authors said. "This represents savings of roughly $4.2 billion."

Canada is the only industrialized country with universal medicare that does not provide universal coverage for prescription medications.

Nearly 10 per cent of Canadians say they don't take recommended medications because of cost, previous research suggests. 

When Paul Scott of Cambridge, Ont., was diagnosed with kidney cancer, he was shocked at the cost of the pills.

"That's a lot of dough, $6,800 [a month]," Scott said. "I just figured that we're going to have to mortgage the house or I won't take the drug. One of the two."

Scott eventually qualified for coverage under a special program.

Access to medications

Canadian Doctors for Medicare says the patchwork way medications are covered — government programs, drug coverage for public employees, workplace compensation programs and tax incentives for private insurance plans — fragments purchasing power and the ability to negotiate competitive prices for medications with drug companies.

Currently, only those who are old enough, poor enough or in Ontario young enough, without a workplace drug plan, are publicly covered, said Dr. Danyaal Raza, chair of Canadian Doctors for Medicare. 

"One in five Canadian families cannot afford to fill their prescriptions because of cost, so if you move forward with a national universal single-payer plan it means those families will be able to take their medication without having to worry how much to pay and they will have more money to pay for things like food and rent," Raza said in an interview. 

Parliamentary Budget Officer Jean-Denis Frechette estimates savings of about $4.2 billion from a national pharmacare program. (Adrian Wyld/Canadian Press)

"Not only will a national pharmacare plan cost less than Canadians are currently spending, it will ensure better coverage so that every Canadian has access to the medications they need,"

The Canadian Health Coalition said Quebec's list of covered drugs doesn't take advantage of the economies of scale available to the federal government, which could purchase medicine on behalf of the whole population, and that this model offers a worst-case scenario of savings. 

Steve Morgan is a professor in the School of Population and Public Health at the University of British Columbia. Last year, Morgan's team came to similar conclusions as the parliamentary budget officer using slightly different methods.

Dramatically less spending elsewhere

"Understandably, people would have this sense that somehow this is going to end up being a white elephant, it'll blow out of control. All you really need to do is look to countries abroad, in particular, countries that have universal, single-payer health-care systems like Canadian medicare," Morgan said.

Morgan gives the examples of Scandinavian countries, Australia, New Zealand and the United Kingdom.

"They all spend dramatically less than Canada, not just on prescription drugs but also on over-the-counter drugs as well. Systems abroad show us that if you do this right, according to good practices in terms of deciding based on high-quality evidence [on] what drugs are worthy of universal coverage and … you sit down with manufacturers and hammer out an appropriate and fair pricing scheme for the drug, you end up finding there is savings available."

Innovative Medicines Canada, a trade group that represents more than 50 pharma companies, said it supports any program that puts patients first while ensuring they have fair, equitable and affordable access to the medicines they need, when they need them.

"Innovative Medicines Canada believes in closing the gaps in coverage to help those who are uninsured and underinsured, while maintaining the option for those with comprehensive drug coverage," president Pamela Fralick said in a statement.

"Any solution needs to ensure that no one is worse off or has fewer options. We should also ensure the health system achieves best outcomes by providing access to a full range of medicines to meet each patient's unique needs."

The Liberal government previously said it is committed to lowering the cost of medications, but not to universal pharmacare. 

A spokesman for Health Minister Ginette Petitpas Taylor said they'll review the report.

The chair of the Commons health committee, Bill Casey, said it will ask Jean-Denis Fréchette, the parliamentary budget officer, to speak about the report as part of its study.

"Right now we have over 100 pharmacare programs in the country between the provinces and the federal government. Imagine the savings that that alone would have if there was just one program."

The House standing committee on health is studying the development of a national pharmacare program as an insured service for Canadians under the Canada Health Act.