World Health Matters: Canada: Universal public drug coverage would save Canada billions

by Gary Finnegan: Canada could save $7.3 billion annually with universal public coverage of medically necessary prescription drugs, according to new research from the University of British Columbia and University of Toronto, published in the Canadian Medical Association Journal.

The issue is a hot topic in Canada as it is the only developed country with a universal health care system that does not include prescription drug coverage.

The study finds that that universal public drug coverage, often referred to in Canada as universal pharmacare, is within reach for Canada even in times of government fiscal constraint.

“It’s a win-win,” said Steve Morgan, lead author of the study and professor of health policy at UBC’s School of Population and Public Health. “A universal pharmacare system would improve the quality and accessibility of health care, while saving the Canadian economy billions of dollars every year.”

The study modelled the cost of universal pharmacare based on data from $22-billion worth of prescription drug purchases in 2012-2013. The study’s calculations included the cost of increased use of prescription drugs by Canadians who currently can’t afford to fill those prescriptions.

Researchers found that increasing the use of generic drugs and bringing Canadian drug prices in line with other countries where universal drug plans achieve better prices through bulk purchasing and negotiation, would add up to significant savings.

“For too long, policy makers have assumed that universal Pharmacare is an expensive policy for governments – that assumption turns out to be wrong,” said Dr Danielle Martin, a co-other of the study and a professor at 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.”

The study shows that the private sector, predominantly the employers and unions that sponsor work-related drug benefits today, would save between $6.5-billion and $9.6-billion annually with comparatively little increase costs to government. Under many plausible scenarios, total public spending on medicines would actually fall if Canada had a universal pharmacare system, the authors said.

Government costs would be driven down by reducing the cost of medicines already paid for under public drug programmes – which currently cost Canadian taxpayers almost $10-billion – and by reducing public spending on private insurance for public sector employees which currently costs taxpayers over $2-billion.

“Our study shows that universal pharmacare would save private citizens and corporations more than $8-billion at a cost to government of less than $1-billion. No government, no matter how fiscally conservative, should turn down that bargain,” said Dr Morgan.