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Examining Options For National Pharmacare

Ottawa, November 1, 2018—With Canada once again debating public drug coverage, a new Conference Board of Canada report assesses different options for national pharmacare against key objectives identified earlier this year by senior health leaders. The report, authored by Michael Law, Fiona Clement and Thy Dinh, also outlines potential impacts for different segments of the population and stakeholders.

“There are a range of national pharmacare options available to Canadian policymakers. Each model has its pros and cons and can have different implications for access to medicines, public and private costs, and the implementation challenges that would accompany them,” said Greg Sutherland, Principal Economist, The Conference Board of Canada. “The best model depends on the goals of the public and policymakers, and the budget they are willing to commit to fund it.”

Canada is among a handful of Organisation for Economic Co-operation and Development (OECD) countries that does not provide comprehensive publicly-funded prescription drug coverage for all its citizens. But, almost every Canadian is enrolled in or eligible for some form of publicly-funded prescription drug insurance. This coverage, however, varies considerably across regions and can be confusing for all involved.

As part of the Conference Board of Canada’s National Pharmacare Initiative, Assessing the Options for Pharmacare Reform in Canada, profiles five pharmacare models and assesses how well they might improve access to medicines, value for money, and the patient and provider experience.

Comprehensive Public Coverage

Under this model, all Canadians have public coverage of a comprehensive formulary of medicines. This option potentially improves access to medicines for Canadians who are currently underinsured. The impact for those with private insurance, however, is not clear, particularly if employers stop providing private coverage. While it improves the value for money spent, it means a substantial increase in public spending as the government pays for all drug costs. A transition to this model is complicated, but also results in consistent and portable coverage for patients and providers across the country.

Public Coverage of Essential Medicines

Public coverage in this model consists of a small formulary of essential medications (potentially the 125 medications on the World Health Organization’s essential medicines lists) for everyone in Canada. This option likely improves access to medicines on the list and also likely improves value by encouraging doctors to prescribe lower-cost treatments.

Public Coverage with Income-based Deductibles

A targeted public coverage model that provides everyone with coverage for drug expenses based on household income. This plan design is currently in place in several provinces, including Ontario and British Columbia. If a significant portion of the Canadian population were exempted from paying the deductible, it might benefit those that are currently underinsured. However, it does not significantly reduce overall spending on drugs.

Individual Mandate

This model requires that each Canadian has either public or private insurance that meets a specified standard. This approach improves access to medicines for those who currently do not have sufficient coverage, but does not improve access for those with private insurance. This model also leads to significant differences in the level of coverage for each Canadian and is unlikely to improve value for money. On the other hand, it does not result in much of an increase in public spending.

Optional Public Coverage

Canadians have the option of purchasing public coverage should they desire it. This option likely does not have much of an impact on improving access to medicines or value for money. Yet, it is comparatively less expensive for the government and is the least disruptive option to implement.

The report was prepared by The Conference Board of Canada’s National Pharmacare Initiative (NPI) as well as the Canadian Alliance for Sustainable Health Care. Launched in April 2018, the goal of the NPI is to inform and support current public discussion and debate potential approaches to ensuring universal access to pharmacare for Canadians. This report and other new research by The Conference Board will support discussion and debate at the inaugural National Pharmacare Summit on November 22, 2018 in Toronto.

About The Authors

Michael Law is the Canada Research Chair in Access to Medicines, Centre for Health Services and Policy Research, School of Population and Public Health, University of British Columbia.

Fiona Clement is Associate Professor, Director, Health Technology Assessment Unit, O’Brien Institute for Public Health, Cumming School Medicine, University of Calgary.

Thy Dinh is the former Director, Health Economics Policy, The Conference Board of Canada.

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