Despite “a growing chorus of calls” for Canada to implement a single-payer, government-run prescription drug plan, researchers at the Fraser Institute have found that such a system may actually prove detrimental to low-income Canadians nationwide.
Responding to a March 2015 study conducted by the Canadian Medical Association Journal (CMAJ) which claimed that such an arrangement, often dubbed Pharmacare, could save the country about $7 billion every year in drug costs, the Fraser Institute labeled its findings “dubious.”
“Calls for a national government-run Pharmacare program are often founded on concerns about the affordability of prescription drugs, particularly for low-income Canadians. But expansion of government insurance coverage is not costless and must be judged against the coverage already provided by Canadian governments,” said Nadeem Esmail, Fraser Institute senior fellow and co-author, in a statement.
In comparing Canada with peer nations Switzerland and The Netherlands, Bacchus Barua contends that Canada does not have a “second, private tier” of health care, which helps to bare costs. In fact, it points out that Quebec, the only province with a public drug plan, incurred $1,065 per capita in drug expenditures in 2014 – the second highest in Canada.
The report also points out that CMAJ’s estimates were based on historic drug usage and did not take into account the heightened demand that would accompany costless prescriptions, which would then drive up expenditures into the billions.
As a result, Esmail’s analysis demonstrates that Canada’s current system might be preferable for low-income citizens and other vulnerable groups, such as the unemployed. It found that Canadians who receive social assistance in every province receive drug coverage either at low or zero cost to the patient, and catastrophic insurance is already available to low-income Canadians throughout the board.
“A national drug plan would add little to such existing levels of coverage,” Esmail argued.
While Pharmacare looks appealing on paper, both researchers argue that it should not be a public policy priority for Canadian officials.
“Providing additional access to prescription drugs for those in need doesn’t require a government-run single payer program. The experience of the Dutch and Swiss systems shows there are other options that have proven themselves markedly superior in terms of cost effectiveness, wait times, and healthcare outcomes,” concluded Barua.
