Variance in Pharmacare Coverage Across Canada

Donald Willison (), Paul Grootendorst and Jeremiah Hurley
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Donald Willison: Department of Clinical Epidemiology & Biostatistics, McMaster University, Centre for the Evaluation of Medicines, St. Joseph's Hospital, Hamilton

No 1998-08, Centre for Health Economics and Policy Analysis Working Paper Series from Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada

Abstract: In 1997, the Canadian National Forum on Health recommended creation of a national pharmacare program, the key elements of which would include: (a) universal first-dollar coverage for medically necessary medications; (b) comprehensive information support tools for managers, clinicians, and consumers to guide in the optimal use of pharmaceuticals; (c) integration with primary care reform; and (d) innovative methods for management of costs. This recommendation has generated considerable controversy, position papers by various system stakeholders, and a national conference to debate alternative approaches to pharmacare. In an attempt to clarify some of the confusion in the context of the ongoing debate, we describe the nature of existing public prescription drug insurance coverage, and review what is known about private coverage in Canada. We focus, in particular, on provincial prescription drug plans, documenting the extent of variation in coverage across the provinces, and trends in this coverage in recent years. In addition, we have assessed the impact of the various cost-sharing provisions on a typical senior residing in the different provinces, using a series of simulations to calculate what the out-of-pocket costs would have been for a high- or low-income senior in each province under alternative scenarios regarding prescription drug consumption and the senior’s income. The elderly are among the most consistently covered groups within society. Although all provincial drug benefit programs have some coverage for seniors, there is substantial variation in the amount of coverage. This study reveals a substantial burden of out-of-pocket costs associated with an average drug consumption pattern. In addition, among seniors of similar income, we see up to a ten-fold variation in out-of-pocket payments for the same drug consumption among the provinces. In most provinces, the trend in the last decade has been toward greater cost-sharing. This reverses the trend observed between the 1960’s and 1990. With the exception of Quebec, which recently introduced a universal system of coverage (accompanied by significant increases in cost-sharing for those previously covered), recent extensions of coverage have tended to be piecemeal, to individuals with specific diseases or requiring specific drugs. As a consequence of the last thirty years of pharmacare policy, the availability of prescription drug insurance depends more on such factors as employment status and the type of employment, province of residence, age, and income than it does on underlying need for such therapy.

Pages: 27 pages
Date: 1998
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