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Drug insurance: A single-payer pharmacare program would jeopardize coverage quality for 21 million Canadians

Montreal, February 22, 2024 – Imposing a single-payer universal drug insurance plan on all Canadians would jeopardize coverage quality for at least 21.5 million among them, according to a study released by the Montreal Economic Institute this morning.

“All across the country, private drug insurance plans cover more treatments than governmental plans,” explains Emmanuelle B. Faubert, economist at the MEI and author of the study. “If the federal government follows the NDP’s suggestion, all Canadians with access to private insurance will have to content themselves with public insurance and its less generous coverage.”

In the context of their support agreement with the Liberal Party of Canada, the New Democrats are asking the Trudeau government to implement a single-payer universal drug insurance plan in order to continue their support.

Nearly 25 million Canadians have private drug insurance coverage.

Between 2018 and 2021, private drug insurance plans covered 51 per cent more drugs on average than public plans. In Quebec, the province with the most generous public coverage, this difference was 59.6 per cent.

The MEI study indicates that even if a public plan as generous as Quebec’s were extended across the country, 21.5 million Canadians would risk seeing the quality of their insurance coverage fall.

The author also emphasizes the repercussions that this could have for drug access.

“When a drug is not covered by any insurance plan in a country, many companies stop distributing it,” says Ms. Faubert. “To the reduced coverage of the public plans must also be added the long approval delays that risk reducing access to drugs.”

The average approval delay for the coverage of a new drug by private insurers is 226 days after its approval by Health Canada. For the public plans, this delay is 732 days.

Of the new drugs launched on the global market between 2012 and 2021, 44 per cent are distributed in Canada, but only 20% are covered by a public plan.

“If the federal government’s goal is to provide drug insurance coverage to the 2.8 per cent of the population that are not eligible at the moment, there are better ways of going about it,” concludes Ms. Faubert. “Threatening the quality of drug coverage enjoyed by over 20 million Canadians, as a single-payer plan would, is not the right way to do it.”

The MEI study is available here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship. 

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