National pharmacare will reduce drug access for almost 26 million
The recent federal budget provided $1.5 billion over five years to support the launch of a national pharmacare plan. The money will fund universal prescription drug benefits for contraceptives and diabetes medications, and is intended to be the first step toward comprehensive, federally funded, single-payer programs that will eventually replace existing public and private drug plans.
By taking this action, the Liberal-ndp coalition in Ottawa shows an astounding lack of concern for how national pharmacare will disrupt prescription drug benefits for privately insured Canadians.
According to the Canadian Life and Health Insurance Association, 25.5 million Canadians — 64 per cent of us — have prescription drug coverage under private plans. In addition, provincial and federal governments provide drug benefits for select target populations defined by age, income, disease or their Indigenous status. People who fall between the cracks of private and public plans are protected by publicly funded safety-net programs for out-of-pocket prescription drug expenses that every jurisdiction in Canada offers.
In sum, Canadians are already universally insured against catastrophic expenses — though only for the drugs approved by these various plans. The list of drugs covered is different in private and public programs. Private plans are generally more comprehensive. Telus Health reports that over 80 per cent of private drug plans have open formulary lists, meaning they generally include all drugs authorized for marketing by Health Canada.
The country’s biggest drug coverage problem is that its public drug programs do not cover many new drugs. If an insured person’s prescribed medication is not listed on the public formulary, that person is exposed to 100 per cent of the cost as an out-ofpocket expense. Unfortunately, pharmacare does not solve that problem.
Granted, pharmacare will move all Canadians into a single system modelled on existing public drug plans. To examine how this may affect access to medicines, I compared the number of new drugs covered under public versus private drug plans and how long Canadians waited for insured access to those drugs. The analysis used data from the leading source of pharmaceuticals market information, IQVIA Inc., as well as provincial and federal formularies.
The evidence is clear: coverage for innovative drugs is better and faster in private than public plans. Excluding vaccines and radio-pharmaceuticals, of the 166 new medicines authorized for marketing by Health Canada between 2018 and 2022, at the end of 2023 public drug plans covered only 18 per cent on average, compared to 68 per cent on average in private drug plans. In other words, Canadians in public plans were covered for less than one in five new drugs that Health Canada deemed safe and effective during the study period, while Canadians in private plans were covered for 3.5 out of five.
On average, publicly insured Canadians waited over two years for drugs to become available in their provincial or federal plans after approval by Health Canada. This was twice as long as the average wait times experienced by privately insured Canadians. To be precise, the insurance coverage delay averaged 770 days across all listings in the 11 provincial and federal public drug formularies while the comparable wait time in private plans was just 369 days.
Delay is not the main problem, however. Many new drugs simply were not listed publicly even after six years. In 2018, Health Canada issued 38 marketing authorizations for new active substances. As of Dec. 31, 2023, the number of these drugs that had made it to public formularies ranged from a low of just three in British Columbia to a high of 13 in Nova Scotia. Ontario had listed only nine. The average for private plans was 29.
Despite what its supporters claim, national pharmacare will not improve Canadians’ insurance coverage. Rather, it will universalize the scarcity and delays currently experienced under public drug plans, and it will reduce access to new medicines for Canadians now covered under private plans.