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Office of Parliamentary Budget Officer reports on Pharmacare cost estimate

Authored byRyan Wong

In June 2019, the Minister of Health tabled a report, A Prescription for Canada: Achieving Pharmacare for All, recommending that Canada implement universal, single-payer, public pharmacare (Pharmacare). On October 12, 2023, the Office of the Parliamentary Budget Officer (PBO) published a report, the Cost Estimate of a Single-payer Universal Drug Plan. A Pharmacare bill may be tabled in the fall of 2023.

The report analyzes the expected prescription drug expenditures under Pharmacare compared to the current system over a five-year period. The estimated costs are based on a framework for Pharmacare that was provided to the PBO by the House of Commons Standing Committee on Health in September 2016. Specifically, the PBO assumed that Pharmacare would:

  • Be a universal plan;
  • Replace existing public and private drug plans;
  • Use the Régie de l'assurance maladie du Québec (RAMQ) formulary as the national formulary; and
  • Require a $5 co-payment for all prescriptions of brand-name drugs, with enumerated exemptions.

Key findings of the report include:

  • Total drug expenditures, under Pharmacare, are estimated to be $33.2 billion in 2024-2025, increasing to $38.9 billion in 2027-2028;
  • The incremental cost to the public sector (i.e., federal and provincial governments combined) is estimated to be $11.2 billion in 2024-25, increasing to $13.4 billion in 2027-28; and
  • Cost savings on drug expenditures, under Pharmacare, are estimated to be $1.4 billion in 2024-2025, rising to $2.2 billion in 2027-2028.

Should you have any questions, please do not hesitate to contact a member of the Life Sciences Regulatory & Compliance Group.

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