Implementing a universal single-payer drug insurance plan could compromise the quality of coverage for at least 21.5 million Canadians, revealed a new study from the Montreal Economic Institute.

This comes as the Liberals are expected to reveal their pharmacare bill which was a key promise Prime Minister Justin Trudeau made to NDP leader Jagmeet Singh as part of their confidence-and-supply agreement.

Private insurance plans cover a broader range of medications than provincial government public insurance, researchers found. Between 2018 and 2021, private plans reimbursed 51% more unique medications than public plans.

In Quebec, the province with the longest list of drugs covered by a public insurance plan, private plans cover 59.6% more medications than the public option.

Even if pharmacare adopted the Régie de l’assurance maladie du Québec’s list, it would reduce the number of insured drugs for many Canadians. Canada’s four most populated provinces (Ontario, Quebec, British Columbia, and Alberta) have more extensive private coverage than the public plan offers.

Approximately 25,000,000 Canadians have private drug insurance coverage—based on 2020 data—about 65% of Canada’s population. Of this number, 21.5 million lived in the four most populated provinces. 

“This means that up to 21.5 million Canadians would experience a reduction in the quality of their drug coverage with the adoption of pharmacare,” said Emmanuelle B. Faubert, the author of the research.

Pharmacare would likely prohibit purchasing complementary insurance that provides additional coverage for non- or partially-covered drugs. 

However, if an insurance plan no longer covers certain drugs, pharmaceutical companies will likely stop distributing them in Canada, revealed Faubert. 

“The variety of medications in circulation in this country is therefore at risk of shrinking, preventing previously covered patients from having access to these drugs, even if they were disposed to pay for them out of their own pocket,” she added. 

The number of unique drugs covered by public plans in every province between 2018 and 2021 was 54,954, according to the research. The drugs covered by private plans were 82,529.

Preserving access to a wide variety of treatments is crucial, given the distinctive features of individuals and the variety of the effectiveness of each treatment, noted the research. Yet, a new national pharmacare program may pose a threat to such access. 

The process of a drug being offered in Canada is already complex and lengthy. A drug must first be approved by Health Canada, following rigorous tests. The maximum price is then set by the Patented Medicine Prices Review Board, which is subsequently negotiated through the Pan-Canadian Pharmaceutical Alliance. Provincial health authorities must then approve adding the drug to the list covered by a province’s public plan.

A new universal national insurance plan would result in Canadians waiting longer before new drugs are submitted by pharmaceutical companies and approved by Health Canada, researchers argue. 

Canadians with private insurance obtain access to new drugs within 226 days. Canadians covered by public insurance obtain access after 732 days, having to wait on average a year and five months more than those with a private insurance policy before being reimbursed for a new drug on the market.

Between 2012 and 2021, 44% of new drugs launched globally were distributed in Canada. Only 20% were covered by public plans. 

Canadians moving to a public drug insurance system will exert an enormous amount of pressure on public drug spending, especially as private insurance spending gets transferred to public accounts, claimed the research.

Finance Minister Chrystia Freeland said pharmacare will not jeopardize Canada’s fiscal standing and that it can be implemented without going over the government’s spending budget announced last fall.

According to the Parliamentary Budget Officer, pharmacare would cost $2.6 billion in 2023. Based on the assumption that the RAMQ’s list of drugs is adopted across Canada, the simulation shows that the cost would reach $11.2 billion by 2024 and $13.4 billion by 2027.

“These additional costs will necessarily fall on taxpayers’ shoulders, in the form of taxes devoted to paying this new bill,” said Faubert.

The research noted that only 1.1 million Canadians are not eligible for any kind of drug insurance. Still, there are 3.8 million Canadians who are not signed up for some form of public or private drug insurance. In these cases, it is better to plug the gaps in the provincial system so that everyone has access to insurance rather than overturn current public and private coverage, which risks adversely affecting a large proportion of Canadians, said Faubert.

Quebec has a mixed public and private system, offering default coverage to all residents of the province. This leaves the door open to a market for private insurance, offering more generous plans than public plans. 

“In this way, market competition allows Canadians to continue to enjoy relatively more generous drug insurance, but also to be insured by the public plan in case of loss of employment,” said Faubert.

A model such as this would allow uninsurable Canadians to have drug coverage without withdrawing the majority of Canadians from their current private coverage, which is more generous. This model is also less fiscally demanding and would have a smaller impact on public finances. 

“By developing a uniform, 100% public, pan-Canadian drug insurance plan, we risk considerably reducing coverage quality for a large number of Canadians and reproducing what is happening elsewhere in the healthcare system, namely abusive bureaucratization where the needs of patients are of secondary importance,” concluded Faubert.

Alberta has already announced its intention to opt out of the national pharmacare plan.