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June 19, 2021

Medicare needs to cover full cost of prescription drugs: report

Canada's is the only universal health care system in the developed world that doesn't provide universal coverage for prescription medications, the C.D Howe Institute reports.

Nationwide, only 44 per cent of total drug expenditures are covered by provincial benefit programs - compared with 90 per cent of hospital costs and 99 per cent of all other medical costs.

While provincial drug benefit programs help some patients with portions of their prescription drug costs, the picture across the country remains fragmented, leaving the majority of costs to be financed out-of-pocket and through private insurance.

And employers continue to balk at just how much that's likely to cost them, particularly when one considers the existing system's built-in inefficiencies. 

But extending additional coverage to drugs, which account for roughly 16 per cent of Canada's health costs, would burden the system even further, critics argue

Not so, says the report. In countries like New Zealand and Britain with government-insured drug systems, total pharmaceutical costs per capita are considerably lower than in Canada - the result of greater efficiencies, increased bargaining power with pharmaceutical companies and better integrated medical systems.

It recommends that provinces expand public pharmacare programs to all segments of the population with a specific focus on promoting access to medicines of proven value-for-money. 

While the report acknowledges that expanded public pharmacare programs would, in the short term, require increased government spending such costs would, "over time, be more than offset by savings to patients, employers and individuals who purchase stand-alone private drug coverage."

Would you like to see more prescription drugs covered by the public purse?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...