Study: Universal pharmacare system could save Canada $3.1 billion

A recent study published in the Canadian Medical Association Journal has rekindled debate over whether Canada should implement a universal pharmacare system, eliciting editorial responses from both of Canada’s national newspapers, The Globe and Mail and the National Post.

Although Canada has a universal healthcare system where medical services such as hospital visits are publicly funded, the government does not provide universal coverage for prescription medicines. Instead, the cost of prescription medicines is covered in varying degrees through private and public insurance plans as well as out of individual's’ own pockets.

According to Dr. Steven Morgan, professor at the school of population and public health at UBC and co-author of the study, this makes Canada an anomaly, as it is the only advanced-economy country with universal healthcare that does not also have a universal prescription drug coverage component.  

To provide a manageable first step to potentially move Canada towards universal pharmacare, Morgan and his colleagues estimated the savings to Canada if the country were to provide universal public coverage of 117 essential medicines. They estimated that Canadians could save $3.1 billion annually by providing universal coverage for these essential medicines, savings largely derived from bulk purchasing power.

“If you have a system which is a single-payer for all of Canada, that system becomes powerful in the world market for pharmaceuticals,” said Morgan. “The price of [generic] drugs are far lower in countries that have national procurement systems than they are in Canada.”

Despite the potential savings, universal prescription drug coverage — even universal coverage restricted to 117 medicines — faces significant political obstacles.

“If we believe that a system of universal coverage of these medicines could generate on the order of $3 billion in net savings to Canada, that means that somebody in the sector is going to get $3 billion less in revenue that they are getting right now,” said Morgan.

Among stakeholders with the most to lose, Morgan lists insurance companies and pharmacies.

To overcome these obstacles, politicians need to be given adequate impetus to act.

“Canadians need to say this matters to our health because when people are not filling the prescriptions they need, their health gets worse. It matters to their bottom line because families that have a high burden of illness pay a lot out of pocket for medicines and it essentially becomes a tax on poor health,” said Morgan. “It matters to taxpayers because if people do not fill out prescriptions, they end up in hospitals and we all pay for that. Oftentimes, it ends up being more expensive than it would have been to give them the drugs in the first instance.”

Morgan sees the millennial demographic as a potential tipping point in this policy debate. He encourages the millennial generation to become informed about healthcare policy and politically engaged in the discourse surrounding the issue, regardless of political views. He stresses the importance of the issue to millennials in light of changing dynamics of employment in Canada.

“The job market today is one that is full of precarious work, part-time positions or working in smaller businesses and entrepreneurial settings, which is great and exciting, but those are settings that do not offer health benefits. Millennials, interestingly enough, are going to be a generation of people who will grow into the labour market that just does not have a health benefit for them,” he said.

Because of estimated fiscal savings and expected improvement in access to prescription drugs, universal coverage of essential medicines could become a profound piece of legislation if implemented.

“It is an opportunity for [Prime Minister Justin Trudeau] to leave a legacy on the healthcare system that would be bigger than his father’s by a long shot. This would be the biggest legacy in Canadian healthcare since Medicare was founded in the 1950s and 60s,” said Morgan. “It does represent an expenditure, but if it’s done right, it also represents a profound policy legacy.”