Estimated Cost of Universal Public Coverage of Prescription Drugs in Canada

An article published an article in the Canadian Medical Association Journal (CMAJ) estimates the cost of universal public coverage of prescription drugs in Canada. The authors are Steven G. Morgan PhD, Michael Law PhD, Jamie R. Daw BHSc, MSc, Liza Abraham BSc, and Danielle Martin MD, MPubPol.

This is a summary of that article.

With the exception of Canada, all countries with universal health insurance systems provide universal coverage of prescription drugs. Progress toward universal public drug coverage in Canada has been slow, in part because of concerns about the potential costs. The authors sought to estimate the cost of implementing universal public coverage of prescription drugs in Canada.

The authors used published data on prescribing patterns and costs by drug type, as well as source of funding (i.e., private drug plans, public drug plans and out-of-pocket expenses), in each province to estimate the cost of universal public coverage of prescription drugs from the perspectives of government, private payers and society as a whole.

They estimated the cost of universal public drug coverage based on its anticipated effects on the volume of prescriptions filled, products selected and prices paid. They selected these parameters based on current policies and practices seen either in a Canadian province or in an international comparator.

The results are that a Universal public drug coverage would reduce total spending on prescription drugs in Canada by $7.3 billion (worst-case scenario $4.2 billion, best-case scenario $9.4 billion). The private sector would save $8.2 billion (worst-case scenario $6.6 billion, best-case scenario $9.6 billion), whereas costs to government would increase by about $1.0 billion (worst-case scenario $5.4 billion net increase, best-case scenario $2.9 billion net savings). Most of the projected increase in government costs would arise from a small number of drug classes.

The authors concluded that the long-term barrier to the implementation of universal pharmacare owing to its perceived costs appears to be unjustified. Universal public drug coverage would likely yield substantial savings to the private sector with comparatively little increase in costs to government.

Click here to download the entire article.

Listen to an interview with Danielle Martin at soundcloud.com/cmajpodcasts/drug-coverage

Reference

Steven G. Morgan PhD, Michael Law PhD, Jamie R. Daw BHSc, MSc, Liza Abraham BSc, and Danielle Martin MD, MPubPol.