The financial burden of out of pocket prescription drug expenses in Canada

Sam Caldbick (), Xiaojing Wu (), Tom Lynch (), Naser Al-Khatib (), Mustafa Andkhoie () and Marwa Farag ()

International Journal of Health Economics and Management, 2015, vol. 15, issue 3, 329-338

Abstract: Pharmaceutical expenditures account for approximately 15.9 % of total health expenditures in Canada. Unlike hospital and physician services, in which costs are universally covered, most pharmacological therapy does not fall under the umbrella of ‘medically necessary’ services set out by the Canada Health Act, and therefore is funded through a mix of public and private plans. Little is known about the actual financial burden experienced by Canadians from out-of-pocket drug expenditures (OOPDE). This paper examines the burden of OOPDE in Canada. 1.1 % of Canadian households exceed our catastrophic threshold (9 %) of the drug budget share. Additionally, 2.6 and 8.2 % of households exceed lower thresholds of 6 and 3 % respectively. We find an inverse relationship between household income and the burden of OPPDE. Low-income households have the highest likelihood of being in the ‘catastrophic’ drug expenditure category. This finding suggests that a vulnerable population of ‘working poor’ are likely to be experiencing disproportionate financial burden because they are not eligible for public assistance programs. Seniors experience the highest burden of OPPDE when compared to other age groups. We also find that there is significant interprovincial variation in the burden of OOPDE, which partly reflects different provincial government drug coverage policies. Copyright Springer Science+Business Media New York 2015

Keywords: Drug expenses; Burden of out of pocket expenses; Provincial differences in drug policies in Canada (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s10754-015-9171-3

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