Close the Gaps: Patient Benefits and Taxpayer Costs of 3 Pharmacare Options.

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Summary

EN version | Author: Brett J Skinner (Ph.D)

The federal government’s Advisory Council on the Implementation of National Pharmacare recently released its interim report.  In June, the Council is expected to issue its final recommendations about which model the program will be based on. Three approaches are being considered:

1. PBO National Pharmacare: universal, single-payer, government-managed drug plan that would replace all employment-based drug benefits in both the private and public sector, as well as replacing existing federal, provincial and territorial government-run drug plans. This is the model that was studied by the Parliamentary Budget Officer (PBO) and recommended by the House of Commons Standing Committee on Health.

2. Federal Safety-Net: federal government to provide safety-net drug insurance to protect Canadians from exceptionally high drug costs above a defined threshold percentage of household income.

3. Close-the-Gaps: enhance existing public and private drug insurance plans by adjusting regulations and public funding to close the coverage gaps.

In September 2016, the House of Commons Standing Committee on Health asked the PBO to estimate the federal cost of implementing a National Pharmacare program. The government did not request a comparative analysis of the cost of the other two models. Nor did the government request an empirical verification of two core assumptions used to justify the need for National Pharmacare: that millions of Canadians are not covered by any type of drug plan; and that out-of-pocket costs for prescription drugs force people to make a choice between basic necessities and medicines.

The purpose of this paper is to identify the real prescription drug insurance coverage gaps, to estimate and compare the costs and benefits of the three pharmacare models being considered by the Council, and to use these facts to inform decision making about the most appropriate model from the perspective of patients and taxpayers. 

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