• National Pharmacare Cost Impact Study: Results Released
Under a fully funded, publicly administered, national pharmacare
program, government spending on prescribed drugs could increase by as
much as $8.1 billion and would result in a dramatic shift in funding
from the private sector to the public sector. The study, an update of
1997 research, examined the cost impact to payers of several models of
National Pharmacare.
A detailed executive summary is also available in
English.
• Coût de financement d'un programme national d'assurance-médicaments
Dans le cadre d'un régime national d'assurance-médicaments entièrement
financé et administré par le gouvernement, les dépenses
gouvernementales de médicaments d'ordonnance augmenteraient d'environ
8,1 milliards de dollars, à la suite d'un transfert de fonds
considérable du secteur privé au secteur public. Cette étude vise à
estimer le coût de financement d'un programme national canadien d'assurance-médicaments.
Elle fait la mise à jour d'une étude entreprise en 1997.
Un résumé détaillé est aussi disponible en
français.
The purpose of this study
is to estimate the cost of funding a national pharmacare program in
Canada. This research considers several models of national pharmacare
but uses as its starting point a comprehensive model providing first
dollar coverage to all Canadians.
Executive
Summary (1997)
Total prescription
drug expenditures for 1996 are estimated to be just under $6.8 billion
with the largest portion (44%) funded by provincial drug plans.
Private plans account
for approximately 28% of total expenditures with individuals (insured
and non-insured) covering another 28% through co-payments, deductibles,
and other out-of-pocket expenses.
The 12% of individuals
with no insurance coverage account for approximately 7.6% of total
drug expenditures.
A fully funded, comprehensive,
publicly administered, national pharmacare program would increase
public expenditures on prescription drugs by an estimated $4.3 billion.
Other publicly administered
programs would increase public expenditures by $2.1 billion to $2.5
billion with traditional levels of co-payments or patients paying
the dispensing fee. These plans would in essence "nationalize"
current private plans.
With a national pharmacare
program similar to the drug plans that exist in Saskatchewan and
Manitoba, public expenditures would fall by almost $0.5 billion.
However, expenditures by individuals would increase by $0.9 billion.
The elimination of
private drug plan coverage would have a significant impact on third
party payers, not only because of the loss of the majority of their
business but also because of the effect on extended health benefits
offered by the insurance industry.
The impact on the public
purse of the mixed public/private plans is considerably less than
the public only plans. The incremental increase in expenditures
range from $0.1 billion with a plan similar to that currently in
Quebec, to $1.5 billion for a plan that provides true first dollar
coverage.
The potential for administrative
savings from a national pharmacare program is only $118 million
given that administrative costs are already fairly low in both the
public and private sectors.
Overall, the best opportunity
for a national pharmacare program is a combined public/private plan
with a 25% co-payment (similar to Quebec) or with the patient paying
the dispensing fee. In both cases the impact on public and private
plans is an increase of less than 10%.
For more information,
or to receive a copy of the study, please
contact PDCI Market Access.
