Universal Public Drug Coverage Would Save Canada Billions

A new study claims that Canada could save CAD 7.3 billion annually by providing universal public coverage of medically necessary prescription drugs.

Researchers at the University of British Columbia (UBC; Vancouver, Canada) and the University of Toronto (ON, Canada) used published data on prescribing patterns and costs by drug type, as well as source of funding in each province to estimate the cost of universal public coverage of prescription drugs from the perspectives of government, private payers, and society as a whole. The estimated cost of universal public drug coverage was based on its anticipated effects on the volume of prescriptions filled, products selected, and prices paid.

The results predict that universal public drug coverage (which is known in Canada as universal pharmacare) would reduce overall total spending on prescription drugs by reducing the cost of medicines already paid for under Canadian public drug programs—which currently cost taxpayers almost CAD 10 billion—and by reducing public spending on private insurance for public sector employees, which currently costs taxpayers over CAD 2 billion.

The study also shows that the public cost of expanding public coverage for high-cost drugs, like treatments for cancer and rheumatoid arthritis (RA), would be modest and, under most plausible scenarios, would be offset by savings achieved in relatively common drug classes, such as treatments for high cholesterol and high blood pressure. The researchers anticipate that universal pharmacare would save private citizens and corporations more than CAD 8 billion, at a cost to government of less than CAD 1 billion overall. The study was published on March 16, 2015, in the Canadian Medical Association Journal.

“No government, no matter how fiscally conservative, should turn down that bargain,” said lead author Professor of Health Policy Steve Morgan, PhD, of UBC School. “To put this another way, failure to implement a universal pharmacare system that is simply on par with comparable countries around the world will cost the Canadian economy nearly CAD 100-billion over the course of a decade.”

“For too long, policy makers have assumed that universal Pharmacare is an expensive policy for governments — that assumption turns out to be wrong,” said study coauthor Prof. Danielle Martin, PhD, of the University of Toronto. “With the money saved from using generic medicines, bulk purchasing, and better approaches to pricing, we can afford to cover medically necessary drugs for all Canadians without increasing taxes.”

Canada is the only developed country with a universal health care system that does not include prescription drug coverage. Universal Pharmacare would put per capita pharmaceutical spending in Canada on par with the levels seen in comparable countries such as Switzerland, Austria, Spain, and Italy. Canadian spending would still be significantly higher than that in the United Kingdom, Sweden, Finland, the Netherlands, Norway, New Zealand, and Denmark.

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University of British Columbia
University of Toronto