Introduction of Bill C-64 on the national pharmacare plan

Following the announcement of an agreement between the Liberal Party of Canada and the New Democratic Party of Canada (NDP), Bill C-64, An Act respecting pharmacare, was introduced on February 29.

The federal government outlines four main principles in this bill:

1. Improving the accessibility of prescription drugs in a manner that is more consistent across Canada
2. Reducing the cost of prescription drugs, making them more affordable and accessible
3. Supporting safer prescription drug use
4. Providing universal coverage of prescription drugs across Canada

More specifically, the bill proposes funding for the provinces to implement universal, single payer, first-dollar coverage for certain contraceptives and drugs for the treatment of diabetes.

Following the bill’s has been passed, negotiations will begin with each province and territory to implement the coverage. At this point, it is impossible to say whether the provinces will have the option to opt out of the proposed plan or receive compensation from the federal government.

Further steps are planned in the year following the bill’s passing, including:

• The development of a formulary of prescription drugs available to the Canadian public under a national pharmacare plan beyond the contraceptives and drugs for the treatment of diabetes already identified
• The implementation of a national bulk purchasing strategy for medications

Although the funding sources for the proposed plan have not yet been disclosed, this remains an important matter since it would be the first step towards a comprehensive plan covering all therapeutic classes. This initiative that could result in around $40 billion in expenses per year.¹

With the publication of the initial list of prescription drugs covered by the bill, we can estimate the impact the national pharmacare plan will have on private plans:

• On a national basis, nearly 80% of current contraceptive costs could shift to the national plan. The effect will be more limited for medications for the treatment of diabetes, with just 15% to 20% of costs being transferred to the national plan.
• Overall, this could represent a 3% reduction in drug expenses for plans. Considering that prescription drugs account for nearly one-third of total group insurance plan expenses, the effects on premiums of an average private plan would be approximately 1% if there is a complete transfer of the prescription drugs currently covered by the bill.

For organizations with post-retirement plans, the impact would be more limited since contraceptives are rarely used in these plans.

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¹ https://www.canada.ca/en/health-canada/corporate/about-health-canada/public-engagement/external-advisory-bodies/implementation-national-pharmacare/final-report.html

Our experts are closely monitoring developments in connection with this bill and how they might impact organizations’ group insurance plans. For any questions or concerns, contact your Normandin Beaudry consultant or email us.