FORUMSPACE
A Case for Pharmacare in Canada: Lessons Learned from the UK Alexandra Kilian1 , Emily Fong 2 , SARA HALAWA 3 , ANNIE ZHU 4 , Matthew Hughsam 4 , Ben Li1 Bachelor of Health Sciences (Hons), Class of 2017, McMaster University, 2Bachelor of Arts & Science (Hons), Class of 2016, McMaster University, 3Master of Science in Global Health, Class of 2016, McMaster University, 4Bachelor of Health Sciences (Hons), Class of 2016, McMaster University Correspondence: kiliana@mcmaster.ca
Introduction In 2014, total drug expenditure in Canada was $33.9 billion, of which a significant proportion (85%) was spent on prescribed drugs.1 Prescription drugs have become an integral component of modern medicine as they can help treat diseases and greatly improve quality of life.2 However, unlike most other countries with a universal health system, Canada does not universally cover prescription drugs.2 While some level of public drug coverage is provided by all provinces and territories in Canada, 58% of prescription drug costs are covered by private health insurance plans or out-of-pocket payments.2 As a result, there is growing interest among the Canadian public to implement a public drug insurance program, often termed “Pharmacare,” to improve access to prescription drugs.2 The United Kingdom (UK) has had a public financing system for health coverage in place, including prescription drugs, for decades. This article explores what Canada can learn from the UK’s successful universal drug coverage program.
Prescription Drug Coverage in Canada
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The Canada Health Act, which requires universal coverage for medically necessary care provided in hospitals and by physicians, does not provide similar requirements for prescription drugs used outside of a hospital setting. As health care in Canada is primarily a provincial responsibility, this has left provinces to determine whether and how prescription drugs are
The McMaster Health Forum strives to be a leading hub for improving health outcomes at the regional and provincial levels in Canada. Through problem-solving and discussion, they harness information, convene stakeholders, and prepare action-oriented leaders to meet pressing health issues creatively.
covered through their respective health systems. As a result, prescription drug coverage systems vary significantly between provinces, each with its own eligibility requirements, such as income or age.3 In addition to the gaps in public coverage for prescription drugs, only 66% of Canada’s population have access to private drug insurance, either purchased individually or through their employers.4 Those lacking insurance have to pay out-of-pocket for prescription drug expenses. The current patchwork of systems leaves many people without the financial means to purchase essential medications. In fact, 1 in 10 Canadians are unable to afford prescription drugs, which can lead to improperly managed conditions and worse health outcomes.5 This approach to funding prescription drugs in Canada (i.e., varied provincial drug programs coupled with private insurance and out-of-pocket payments) has contributed to inefficiencies and increased costs. A key part of the inefficiency is that prescription drug coverage in Canada involves multiple private insurers, separate from the publicly administered insurance plans. In addition to individuals incurring significant cost, this multi-payer system operates in silos and reduces efficiency by adding administrative costs. This decreases purchasing power of each payer, thereby increasing the overall cost of prescription drugs2. In contrast, singlepayer systems that pool financial risks across larger populations and consolidate purchasing power in price negotiations with drug manufacturers often incur considerably lower costs.3 Due to the complexities involved in implementing a national pharmacare system,