Pharmacare: a goal since 1965

October 19, 2022
Canada flag mug next to spilled pill bottle.
Pharmacare is a policy supported by between 80 to 95 per cent of Canadians depending on the study, but so far, no government has actually implemented it.

Pharmacare: It’s a goal that dates back to 1965, the year Canada’s health care system took its current form. The universal single-payer government-based medication insurance has been recommended by every commission that has studied the question and is the cornerstone of the agreement between the governing Liberals and the NDP to prolong this session of Parliament until 2025.

It’s also a policy supported by between 80 to 95 per cent of Canadians depending on the study, but so far, no government has implemented it. 

When asked about pharmacare, Marc-André Gagnon, a Carleton University professor who specializes in health, pharmaceutical and innovation policy, is clear. “I work in social policy and the issues are always big grey areas. I would say pharmacare is the only [one] where it’s really black and white.”

But there are pharmacare naysayers, including some federal retirees, who mainly cite three concerns. First, Quebec has government insurance for medication so some believe pharamcare would be redundant. Second, there is uncertainty about what pharmacare would mean for Public Service Health Care Plan coverage; and third, others believe it would be too expensive.

Canada, argues Gagnon, is the only country in the world with a universal health care system that does not also have universal pharmacare, which means it doesn’t recognize medication as an essential part of health care service. That has various consequences.

First, in the world of public and private medication insurance, coverage varies greatly based on age, status, location and profession. There are more than 110 public programs and 100,000 private plans in Canada. There is no way to monitor and act on the cost. With such fragmentation, governments have no negotiation power over pharmaceutical companies and pharmacies.

Second, it makes it difficult to monitor prescriptions and assure safety, because the current system has no centralized data to analyze. As such, it enables sub-prescribing, over-prescribing, and mis-prescribing. Prescription issues have effects on the health care system in general, unnecessarily increasing the pressure on and the cost of the system.

Third, the lack of cost controls gives too much latitude to key players in the industry — from insurers to pharmaceutical companies to pharmacists — to set prices as they see fit, and there is no cohesive bulk-buying strategy that would generate economies of scale and help control drug prices, making Canada the second most costly country after the U.S. for medication. Within Canada, Quebec is the province with the priciest medication.

“We have to stop seeing the matter of pharmacare as a bill payment management system. A pharmacare plan is an organized system, to ensure that we get value for our money, to ensure that we avoid waste, to ensure the safety of drugs and to ensure that prescriptions are made appropriately.”

So are Quebecois getting value for money — and does the province actually have pharmacare? 

Gagnon believes Quebec’s is a system that prioritizes private for-profit insurance over quality of services, reduced cost or prescription monitoring. It is a system in which no one has an interest in reducing the cost. Residents with access to a private drug plan are obliged to subscribe to it. Residents without one have to subscribe to the government plan, which includes premiums and co-payments. Those over 65 can continue private coverage or transition to the government plan. That said, like most provinces, Quebec has  a restrictive pharmacare-like program  for children, low-income people and senior citizens.

If the purpose was to make sure everyone has more or less equal access to medication, Gagnon feels it is not a great success. “If you look at the amount of people not filling prescriptions for financial reasons, we have some of the highest rates in the OECD.”

Some worry that pharmacare would threaten their private or employer-sponsored health insurance, such as the PSHCP. While it’s unlikely to threaten PSHCP, Gagnon acknowledges employers offering private insurance benefit from government tax subsidies. With pharmacare, these subsidies might go. However, Gagnon says there are no guarantees these plans will continue anyway and it’s in everyone’s interest to work towards guaranteed minimum acceptable coverage now.

With skyrocketing medication costs, private plans might well become too expensive. Just a few members who need high-cost medicine could cause  the cost to escalate to a point where it is not sustainable for the employer to offer the plan.

Insurance industry players have an interest in maintaining the current system, but the 2019 Final Report of the Advisory Council on the Implementation of National Pharmacare, the government roadmap to implementation, recommends “federal, provincial and territorial governments engage with private insurers, as well as the employers and employees who benefit from their services, to ensure a smooth transition to national pharmacare.”

The council also recommended that “private insurers be allowed to provide coverage for co-payments, as well as for drugs not on the national formulary.” And insurance companies have a role in underwriting and insuring for services outside the health-care system, such as vision care, dental services, travel insurance and paramedical services from practitioners, ranging from acupuncturists to physiotherapists.

The council also heard from employers who are eager to offer better extended health-care benefits such as eye or dental coverage as well as greater coverage for mental health or other extended health-care benefits, which are possible, they say, if drug-related cost pressures are alleviated.

When it comes to paying for pharmacare, Gagnon and others insist  it is financially feasible and sustainable.

What we can’t afford is the current system. Estimates put savings at  20 per cent per capita on drug spending by shifting to a national, universal pharmacare program. Not only would we save, but Canadians — many of whom lack adequate coverage, or have to reduce their medications to make them last longer due to cost — would have better coverage and more efficient prescription regimes that would help avoid inappropriate prescribing.

According to Gagnon, it’s a clear choice, and he’s found no independent research that favours the current situation. Further, there are no independent researchers or academics who don’t support the implementation  of pharmacare.

But if pharmacare is better, cheaper, more efficient and Canadians agree with it, why isn’t it already done? That is the hard question. For Gagnon, it comes down to political will and to the fact that what we have here is a majority with a small interest in change, facing a minority with a huge opposition to that change and colossal financial and organizational resources that can be directed to keep the status quo. While every Canadian would benefit, insurance, pharmacies and pharmaceutical companies have an interest in upholding the status quo. But for Gagnon, there’s hope yet, given the agreement between the federal Liberals and the NDP.


This article appeared in the fall 2022 issue of Sage magazine as part of our “Health Check” series, which addresses timely health questions and health-related policies with a focus on issues affecting older Canadians. While you’re here, why not download the full issue and peruse our back issues too?