NEWS RELEASE: National pharmacare will reduce access to new medicines for 27 million privately insured Canadians

April 18, 2024 08:43 ET| Source: Canadian Health Policy Institute Inc.

TORONTO, April 18, 2024 (GLOBE NEWSWIRE) — The federal Liberal-NDP coalition government recently announced it would work with the provinces to fund universal prescription drug benefits for contraceptives and diabetes medications. It is the first step toward a national pharmacare program that will replace existing public and private drug plans.

As a single payer system, pharmacare will move all Canadians into one system modelled on existing public drug plans. To examine how this might affect access to medicines, a recent study from the Canadian Health Policy Institute 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 confirms that public plans cover far fewer new drugs compared to private plans in Canada. Public plans also take much longer to cover new drugs compared to private plans.

Of the 166 new medicines authorized for marketing by Health Canada from 2018-2022, on average, public drug plans covered only 30 (18%), compared to 106 (64%) in private drug plans. In other words, publicly insured Canadians were covered for less than 1 out of every 5 new drugs that Health Canada deemed safe and effective during the study period. By contrast, privately insured Canadians were covered for 3.5 times the number of new drugs available to publicly insured Canadians.

For the few new drugs that were listed, publicly insured Canadians waited over two years on average, from Health Canada approval, for those medicines to be available in their provincial or federal plans. This was twice as long as the average wait times experienced by privately insured Canadians. The data indicate that the insurance coverage delay averaged 770 days across all listings in the 11 provincial and federal public drug formularies. The comparable average wait time for insurance coverage for new medicines in the private sector drug plans was 369 days.

The limited scope of coverage in existing public drug plans is indicative of what Canadians can expect from national pharmacare. The results of this study forewarn that national pharmacare will reduce access to new medicines for 27 million Canadians currently covered under private plans.


Read the study:

NEWS RELEASE: Access to new medicines in Canada, Europe, and the United States: Study finds less availability and longer waits for Canadian patients

TORONTO, April 11, 2024 (GLOBE NEWSWIRE) — A recent study published by the Canadian Health Policy Institute examined the availability and wait times for access to new drugs, accounting for product launches, marketing authorizations, and insurance coverage under publicly funded drug plans in Canada, Europe, and the United States.

Data showed that Canada was a low priority market for new drug launches. The number of new drug applications submitted in Canada was only 54% of the number launched in the United States, and 62% of those launched in the European Union.

Health Canada subsequently approved fewer new drugs compared to the European Medicines Agency and the US Food and Drug Administration. Only 69% of the new drugs authorized for marketing in the United States were also approved in Canada. Of the drugs authorized for marketing in the EU, 78% were also approved in Canada.

On average, Canada’s public drug plans covered only 12% of the new medicines covered by US Medicare part D drug plans, and 14% of the new drugs covered by European public drug plans.

In total, publicly insured Canadians waited an average of 4 years to access new drugs, from the first date that a new drug application was launched in any of the 3 markets, to the date the drug was positively listed on the formulary of a public drug plan. This was 2.5 years longer than Americans insured under Medicare, and 2.2 years longer than publicly insured Europeans.

The study recommends 4 policy options to address the lack of access to new medicines in Canada:

  • Health Canada should automatically and immediately recognize new drug approvals occurring first in either the EMA or the FDA. Regulatory harmonization could have potentially made an additional 171 new drugs available to Canadians and could have reduced the overall wait by 2 months.
  • Canada should adopt the German model and allow immediate interim insurance coverage for new medicines following marketing authorization, with permanent insurance coverage pending the outcome of post-market price and reimbursement negotiations. This could have reduced wait times by more than 2 years.
  • The federal government should end its price control regime. Research has shown that price regulation is a significant disincentive in company decisions about prioritizing markets for new drug launches.
  • Patent term restoration should compensate pharmaceutical companies for regulatory approval delays, and subsequent delays caused by HTA, price and reimbursement negotiations.

The study is available free of charge at

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NEWS RELEASE: Cost control rationale for pharmacare does not stand up to scrutiny

TORONTO, March 14, 2024 (GLOBE NEWSWIRE) — The latest edition of an annual study from the Canadian Health Policy Institute concludes that the cost control rationale for national pharmacare is not supported by the facts.

The Liberal–NDP coalition recently announced that Ottawa would work with the provinces to publicly fund universal prescription drug benefits for contraceptives and diabetes medications. It is a symbolic step toward a national pharmacare program that will replace existing public and private drug plans.

NDP leader Jagmeet Singh told media that a single payer system is needed to control the cost of new drugs, which are also known as innovative or patented medicines, and that a pharmacare monopsony could negotiate lower prices through “bulk buying”.

The founder and CEO of the Institute and author of the study, Brett Skinner said, “It is doubtful that a single payer would have substantially more bargaining power because each province already has a monopsony for public reimbursement, and Canada already has a national bureaucracy devoted entirely to controlling the cost of patented medicines.”

Several quasi-governmental agencies are engaged in price regulation (Patented Medicine Prices Review Board or PMPRB), health technology assessment (Canadian Agency for Drugs and Technology in Health), monopsony bargaining (Pan-Canadian Pharmaceutical Alliance), and centralized vaccine procurement (Public Health Agency of Canada). Plus, there are initiatives underway for a federal super bureaucracy (Canada Drug Agency).

Skinner argues, “Bulk buying is a nonstarter because it would require government to directly purchase, store and distribute products. Drug plans just reimburse pharmacies for the prescription expense claims of eligible beneficiaries.”

“To achieve savings from scale, a single payer would exploit its monopsony on public reimbursement, to extract rebates from manufacturers. It would essentially delay or deny our access to new medicines as leverage to squeeze the pharmaceutical companies on prices.”

A 2017 report from Ontario’s Auditor General, found the province’s drug plan negotiated rebates averaging 36% off list prices for patented drugs. Pharmacare advocates are betting a single payer can demand deeper discounts without jeopardizing the availability of new medicines in Canada.

According to Skinner, “It’s a risky gamble, because research confirms that excessive price regulation or abusive monopsony bargaining can destroy the commercial viability of introducing new drugs to markets.”

His analysis suggests single payer pharmacare is unlikely to produce significant savings on patented drug costs because prices and total expenditure are not out of control. Skinner examined data from CIHI and PMPRB over the 33 years from 1990 to 2022.

He found that Canadian prices for patented drugs are moderate compared to other countries.

According to the PMPRB 2022 Annual Report, bilateral foreign-to-Canadian comparisons of patented medicines using matched products at purchasing power parity, showed average prices were higher in seven of the 11 other reference countries. The average price ratio across the seven countries was 22.3% higher than Canada.

The PMPRB no longer compares prices from the United States and Switzerland because they are deemed to be “high cost” jurisdictions, but it is expected they would exceed Canada. Which means that Canada ranked 10th of 14 current and former high-income PMPRB reference countries.

Skinner’s analysis also showed that the direct cost of patented drugs is much less than commonly believed.

The Canadian Institute for Health Information (CIHI) reported national (public and private) spending on drugs totaled $49.4 billion in 2022, including retail and hospital expenditure. However, the numbers include direct and indirect costs like non-patented drugs, non-prescribed drugs, pharmacist fees, public drug plan administration, and even R&D spending by pharmaceutical companies. CIHI also excludes rebates negotiated between manufacturers and public drug plans.

Precise data from the PMPRB annual report, show gross national sales of all patented drugs at manufacturers list prices were $18.4 billion in 2022, which represents only 37% of the total drugs and related expenditures reported by CIHI.

Skinner’s analysis indicated that the total cost of patented drugs is only a small fraction of total public and private health spending in Canada. After accounting for rebates, net national expenditure on patented medicines totaled $15.6 billion, or only 4.7% of $334.4 billion in overall national health expenditure in 2022.

In the same year, net public (provincial/territorial/federal drug plans, workers compensation boards, and mandatory social insurance and health premiums) spending on patented medicines was $5 billion, or only 2.1% of $239.9 billion in total public health expenditure.

Skinner also said, “Considering the benefits of pharmaceutical innovation, we should probably be spending a bigger share of health expenditures on new medicines. Pharmaceuticals are often the most efficient, and sometimes the only means for treating patients. It is hard to imagine how physicians and hospitals would deliver modern medical care without pharmaceuticals.”

“Patented medicines represent the latest therapeutic advancements produced by an expensive, time-consuming, continuous process of incremental pharmaceutical innovation. Excessive cost controls for patented medicines are counterproductive.”

“It appears unlikely that the current government will rethink its pharmacare policy. However, if a future government wishes to consider it, there are alternative ways of closing drug coverage gaps without disrupting existing public or private drug plans, and at a fraction of the cost estimated for national pharmacare.”


Brett Skinner, PhD
CEO, Canadian Health Policy Institute
Editor, Canadian Health Policy Journal

Globe and Mail, CBC, Global News cite CHPI research on cross-border re-sale risks to Canada’s drug supply


I want to bring to your attention a recent example of the power of evidence based research to influence public policy thinking in Canada. CHPI was recently recognized as a leading source of evidence and advocacy on the issue of Canada’s drug supply by prominent media including Global News, CBC, and the Globe and Mail. The institute published two important empirical econometric studies on this topic in September 2019 (shown below). Both warned of the risks to Canada’s drug supply from cross-border re-sales to US customers of medicines meant for use by Canadian patients, and both predicted that the most likely response from Canadian provincial and federal governments would be to ban the export of drugs experiencing shortages. Recent events described in the news items pasted below vindicate our analyses.  Thank you for subscribing to Canadian Health Policy journal. With the resources raised from these sales we are able to conduct and publish research that informs the discussion of health policy in Canada!  

Brett Skinner, Editor

Articles published in CHPJ: 

New pathways for U.S. importation threaten Canadian prescription drug supply.

Marv Shepherd, PhD | University of Texas at Austin | SEP 2019

Potential impact of U.S. demand on the Canadian supply of 46 prescription drugs.

Brett Skinner PhD | Canadian Health Policy Institute | SEP 2019

CHPI in the news:

U.S. eats into Canada’s Ozempic dose supply. Here why it’s an issue |
Global News
Organizations such as the Canadian Pharmacists Association and the Canadian Health Policy Institute have been sounding the alarm about possible …

Ozempic shipments to U.S. leave Canadian pharmacists fearing impact on drug supply
Organizations such as the Canadian Pharmacists Association and the Canadian Health Policy Institute have been sounding the alarm about possible …

Globe editorial: The rush by Americans to buy a weight loss drug from Canadian pharmacies …
The Globe and Mail
… such as the Canadian Health Policy Institute have warned for years that Canada needs effective regulation to avoid critical drug shortages.

Rush for diabetes and weight-loss drug Ozempic puts cross-border sales in spotlight
The Globe and Mail
Founder, CEO of the Canadian Health Policy Institute says B.C.’s bid to restrict cross-border sales of Ozempic was right move.