2002 Update Now Available
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.
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.
Download the full 1997 report (64 Kb): Pharmacare Impact Study Final Report (PDF)
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.
For more information, or to receive a copy of the study, please contact PDCI Market Access