Moving to a publicly-funded, single-payer system for prescription drugs could save Canada billions of dollars, finds a study by The Mowat Centre.
The report, Unfilled Prescriptions: The Drug Coverage Gap in Canada’s Health Care System, says a universal plan would generate significant savings over the long term by enabling government to lower the price of prescription drugs through coordinated purchasing and by improving patient health.
Read: Universal drug plan could cut spending by $7.3 billion
“Universal pharmacare would save up to $11.4 billion per year, with about $1 billion in annual savings achieved by simply eliminating the duplication of technical and administrative costs associated with the current patchwork system,” says the report.
The report also notes that if per capita spending on prescription drugs in Canada was reduced to the same level as Germany, Canada would spend $4 billion less per year; if it matched the rates of the United Kingdom or New Zealand, savings would reach $14 billion per year.
Read: Provinces should provide full and universal pharmacare: Report
Inflation-adjusted spending on prescription drugs in Canada increased to $27.7 billion in 2012 from $2.6 billion in 1985. During the same period, average spending per capita increased to $795.32 from $99.31.
Prescription drugs are the second largest component of healthcare spending in Canada, accounting for 15.8% in 2014, behind only hospital costs (29.6%) and above physician costs (15.5%).
As per capita spending on prescription drugs increases—driven by aging populations, increased volume of use and innovations in healthcare technology—many Canadians are unable to afford necessary medications without significant financial hardship. One in 10 Canadians forego filling prescriptions.
Read: Drug plan trends in Canada
The report says federal and provincial governments seeking to overcome theses challenges will face the perennial problems of political willingness, budgetary pressures, path dependency and managing the existing patchwork of provincial drug plans.
“But it is important that the process start now, and be guided by present Canadian realities and lessons from abroad,” the report concludes. “Canada’s federal and provincial governments should move together towards a publicly-funded, single-payer system for prescription drugs that would ensure equitable access for all Canadians.”