Federal Cost of a National Pharmacare Program

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Federal Cost of a National Pharmacare Program.pdf

In September 2016, the House of Commons Standing Committee on Health asked the Parliamentary Budget Officer (PBO) to provide a cost estimate of implementing a national Pharmacare program.  The Committee provided the program’s framework, including the inclusive list of drugs to be covered by Pharmacare based on Quebec’s formulary, eligibility requirements, co-payment levels, and eligibility requirements for co-payment exemptions.

Of the $28.5 billion in estimated pharmaceutical expenses in 2015-16, $24.6 billion would be eligible for a national Pharmacare program.  These are costs currently incurred by governments ($11.9 billion), private insurance plans ($9.0 billion), and patients ($3.6 billion). 

After accounting for pricing and consumption changes, the estimated $645 million the federal government already spends in direct drug spending to certain populations, as well as the estimated $398 million in net revenues from co-payments, the net cost to the federal government would be $19.3 billion.

Patient’s out-of-pocket expenditures for formulary drugs other than those listed as exceptional are expected to decrease by 69 to 100 per cent depending on eligibility for co-payment exemptions.

These findings suggest that Pharmacare could reduce drug expenditures for the drugs listed on Quebec’s public drug plan formulary, while ensuring standardized access to these drugs.

Figure 1-3 updated 2017-11-07