The fundamental fallacy of universal drug coverage

A program to provide prescription drugs to all Canadians is wasteful and wrongheaded. We should simply be targeting those who need help

Bacchus BaruaAs a parliamentary committee in Ottawa drafts its report on the possibility of a national drug plan, a new study estimates that roughly one out of every 12 Canadians who required a prescription in 2016 had difficulty paying for it. The authors also estimate that one million Canadians reduced spending on food and heat due to drug costs.

If these estimates are accurate, there’s certainly a case for identifying and supporting these patients.

However, somewhat bizarrely, the solution often hinted at by the study’s authors, several media outlets, and (quite likely) members of the parliamentary committee is a national government-run pharmacare program. Such a program would use scarce health-care dollars to subsidize everyone, including the majority of Canadians who likely don’t need it.

This is akin to noticing one person in need of nourishment standing next to 11 healthy, well-fed people and deciding to give each of them an equal slice of pie.

Not only is it potentially inefficient, it may not solve the issue at the heart of the problem. Consider that provincial governments across Canada already employ various programs to assist vulnerable populations with medication costs. That these patients still struggle means, if anything, governments may not be best suited to do the job. To believe that an even larger and more imprecise federally-run program would do a better job is simply a misguided (and expensive) fantasy.

Perhaps the knee-jerk reaction to advocate for a national federally-funded pharmacare program relates to the true, but unqualified, notion that most other countries with universal health care also generally provide coverage for pharmaceuticals.

For example, Switzerland, the Netherlands, Germany, France, the United Kingdom, Australia and New Zealand all provide some level of coverage for pharmaceuticals under their universal plans. However, only some of these countries (such as the U.K. and Australia) rely on government-run programs to provide coverage for drugs. Others, such as Switzerland and the Netherlands, provide universal access for all health-care services (including pharmaceuticals) through private insurers.

What’s often ignored in Canada’s ongoing health-care debate is that all of them – even the U.K. – allow the private sector to play a significant role as partner or alternative for the insurance and delivery of medical goods and services.

Another important factor is that private insurance plans in Canada are more generous with the number and type of drugs they reimburse. Therefore, if Canadian patients are paying large sums of money out of pocket because government formularies don’t list their preferred medication, a nationwide expansion of similar programs won’t necessarily help.

Finally, on the delicate topic of patient cost-sharing, remember that most countries with universal health care routinely expect patients to share in the costs of treatment, surgical or pharmaceutical.

Of course, we should all be concerned for fellow Canadians who struggle to pay for necessary medication, including the estimated one million Canadians who may have reduced spending on food and heat to pay for their prescriptions.

However, we should not subsidize Canadians who can either comfortably afford their own prescriptions or hold generous private insurance plans.

We should instead focus on identifying Canadians who are falling through the cracks, and target resources and policy to help them first.

Bacchus Barua is associate director of the Fraser Institute’s Centre for Health Policy Studies.

universal drug coverage

The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.

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