April 2018

Towards a national pharmacare program?

Last month, as part of the annual budget, the federal government announced the creation of an advisory council that will study the possibility of a national pharmacare program in Canada. This council will be chaired by former Ontario health minister Eric Hoskins. One of Hoskins’ major accomplishments was the implementation of OHIP+, a free universal drug coverage for all Ontarians under the age of 25.

Canada is currently one of the only developed countries in the world with a universal health care program that doesn’t include a universal prescription drug plan. This means that nearly 700,000 Canadians do not have prescription drug coverage. In an ecosystem where each province oversees its own healthcare system, there are currently more than 100 different prescription drug insurance programs throughout Canada. Some provinces, like Quebec, have a universal drug plan, while others have more than 20 different plans. In addition, there are huge gaps in provincial coverage. For instance, Ontario covers 4,400 different drugs while other provinces cover more than 10,000. These variations create inequalities between provinces and, as a result, not all Canadians are entitled to the same basic drug insurance coverage.

Prior to the federal government’s announcement, efforts were mainly focused on mitigating or controlling the financial stresses affecting existing plans, and little efforts were made to improve the existing system or accessibility to prescription drugs. Studies have shown that a national pharmacare program in Canada would lead to savings of roughly $4 billion a year (based on total drug spending of $28.5 billion in 2015).

The council will be called upon to address several questions, such as:

  • Would the program cover all prescription drugs, or a restricted list?
  • Would the program cover only costly prescription drugs, or all types of drugs?
  • How would the government fund the program? Would it be funded from its budgets, which may result in a tax increase for individuals? Or rather, would employers be asked to contribute via a salary tax?
  • Would the program complement existing provincial programs, or would it replace these programs, including Quebec’s basic prescription drug insurance plan?

At this time, we are left with more questions than answers. There are many schools of thought, ranging from the status quo to a Quebec-inspired hybrid plan, or a national pharmacare program covering most prescription drugs for all. Currently, two major parties, the Liberal Party of Canada and the New Democratic Party, support the idea of a national pharmacare program, which may lead to a significant change in the coming years. The new advisory council may end up recommending a major shakeup of the current system.

Your Normandin Beaudry consultants will be watching the work of this advisory council closely and will keep you informed of any potential impacts on group benefits plans.

For additional information, feel free to contact Normandin Beaudry’s consultants.

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