OTTAWA - A think tank known as the C.D. Howe Institute is advocating for the Canadian federal government to reconsider its plans for a single-payer pharmacare program due to uncertainties linked to tariffs and fiscal pressures. In a report authored by Rosalie Wyonch, the institute's associate director of research, the recommendation is to address existing gaps in drug coverage instead of pursuing an expansive universal pharmacare initiative.
Wyonch suggests that Ottawa should focus on achieving universal coverage that is fiscally sustainable while leveraging the strengths of Canada's current mixed public-private health system. She highlights the model of Quebec’s public prescription drug insurance program, which has been operational for decades; this program mandates that residents without private insurance enroll in a public plan.
The report emphasizes the need for the federal government to clarify its pharmacare policy and outline future plans. Prime Minister Mark Carney has faced criticism for his ambiguous statements regarding pharmacare initiatives. In the spring federal election campaign, the Liberal Party had promised to protect pharmacare. However, when pressed last week, Carney indicated that his government plans to sign agreements with remaining provinces and territories to launch the program's first phase but did not provide a definite commitment to advance toward a universal model.
The Pharmacare Act emerged from political pressure during the last Parliament, with the minority Liberals, led by Justin Trudeau, agreeing to pass pharmacare legislation in a confidence-and-supply deal with the New Democrats. The NDP demanded a single-payer, first-dollar, universal pharmacare program aimed at covering prescription drug costs for all Canadians, regardless of private insurance status. The Act, which became law in October 2023, obliges the government to work toward the establishment of a national universal pharmacare framework.
The program's first phase aims to provide what the government describes as "universal, single-payer, first-dollar coverage" for contraceptives and select diabetes medications at minimal or no cost to the patient. To facilitate this, the law requires the federal government to negotiate funding agreements with provincial and territorial governments for these medications while commissioning a study to identify the best approach for implementing a universal pharmacare program that encompasses all drugs.
Wyonch has noted that the current Carney administration appears less focused on health care compared to the previous Liberal government, stating, "We are now grappling with tariffs, economic uncertainty, and a significant shift in government priorities towards infrastructure and defense." The implications of a universal pharmacare program could be financially burdensome, with a 2023 report from the Office of the Parliamentary Budget Officer estimating drug costs under such a program at approximately $38.9 billion by the year 2027-28, representing a $13.4 billion increase compared to earlier estimates.
Furthermore, the initial phase of the pharmacare program is not entirely funded, with only Manitoba, British Columbia, Prince Edward Island, and Yukon having signed agreements with the federal government for coverage of contraceptives and diabetes drugs. These four jurisdictions account for over 60 percent of the $1.5 billion allocated for pharmacare in the last budget, while serving just 18 percent of the population. Critics have raised concerns about the government's limited drug formulary, indicating that many patients are unable to access necessary diabetes medications.
The C.D. Howe Institute's report stems from a policy workshop held in August, featuring participants from the pharmaceutical and insurance industries, as well as representatives from the government and academia. Wyonch remarked on the unprecedented consensus achieved at the workshop, noting, "This is quite literally the first time in my experience that the whole pharma industry has agreed with the insurance industry." The committee of experts assigned to explore viable models for a universal pharmacare program is scheduled to deliver its findings to the health minister by October 10. The health minister is then expected to present the report in Parliament.
