In June 2018, the Government of Canada created an Advisory Council for the Implementation of National Pharmacare. Over the following 12 months, the Advisory Council consulted with numerous professionals in various capacities, and on June 12, 2019, they published a final report which outlined recommendations for a proposed National Pharmacare program.
The average Canadian, however, will likely not have time to read the council’s entire report, relying on the opinions and summaries of others instead—some of whom may have a vested interest in the pharmacare program.

What follows is not an opinion piece on whether we agree with the recommendations within the report. Our goal in sharing this summary is to present the content in an unbiased, concise, and uncomplicated manner, in hopes of providing some insight and clarity around this very complex topic.

Report Highlights

The Council proposed that the following five fundamental principles of Medicare—already embodied in the Canada Health Act—be applied to a National Pharmacare program:

Universality. All residents of Canada should have equal access to a National Pharmacare system.

Comprehensiveness. Pharmacare should provide a broad range of safe, effective, and evidence-based treatments.

Accessibility. Access to prescription drugs should be based on medical need, not ability to pay.

Portability. Pharmacare benefits should be portable across provinces and territories when people travel or move.

Publicly funded. A National Pharmacare system should be publicly funded and administered.

The report does not call for the abolition of private insurance programs; instead, the design of the National Pharmacare program would allow for the augmentation of coverage with private insurance.

The council also recommended that the federal government should protect the principles and national standards of pharmacare with distinct federal legislation, separate from the Canada Health Act “to demonstrate its ongoing commitment to partnership on National Pharmacare and provide for a dedicated funding arrangement.”

Proposed National Pharmacare Program Summary

  • National Pharmacare benefits should be portable across provinces and territories.
  • All Canadian residents should be eligible for National Pharmacare to ensure that everyone has access to the drugs they need to maintain physical and mental health.
  • National Pharmacare should provide coverage for a national list of prescription drugs and related products (i.e. a National Formulary) to ensure all Canadians have equal access to the medicines they need to maintain or improve their health.
  • A list of essential medicines should be implemented starting January 1, 2022, followed by a full National Formulary by January 1, 2027.
  • Out-of-pocket costs for all products listed on the National Formulary will include a copayment of $2 per prescription for essential medicines, and $5 per prescription for all other drugs, with a combined annual out-of-pocket maximum of $100 per family to ensure patients face fewer barriers to access.
  • People receiving social assistance, government disability benefits, or the Guaranteed Income Supplement benefit should be exempt from copayments.
  • Canadians be allowed to purchase private insurance to supplement the proposed coverage under the National Pharmacare program, to cover copayments and drugs not listed on the National Formulary.

Government Collaboration

While the intent is to have all provinces, territories, and jurisdictions participate in the National Pharmacare Program, the report is not proposing mandatory participation immediately.

Creating a Canadian Drug Agency

The report recommends the creation of a new arms-length drug agency to oversee the National Pharmacare program and to perform the following functions:

  • Assess the clinical effectiveness of drugs in comparison to other treatment options
  • Decide which drugs and related products (devices and supplies) to include in the formulary
  • Negotiate prices and supply arrangements with manufacturers
  • Advise prescribers, pharmacists, and patients on best practices for drug utilization
  • Monitor safety and effectiveness of drugs in real-world use

The new agency would build an evidence-based National Formulary and monitor the safety and effectiveness of prescription drugs, ensuring they continue to be beneficial to patients while remaining cost-effective. The agency would also deliver a national strategy for high-cost drugs to treat rare diseases, including (but not limited to) the establishment of a national expert panel to work with patients and their clinicians, to determine the right drug for the right patient, at the right time.

Developing a National Formulary

The council recommended the creation of an inclusive National Formulary to respond to the needs—whether physical or mental—of all Canadians, regardless of age, race, ethnicity, sex, and gender identity. The formulary would also include cost-containment measures, such as a mandatory generic substitution clause and a biosimilar substitution policy.

The council also recommended that federal, provincial, and territorial governments launch National Pharmacare by offering universal coverage for a list of essential medicines by January 1, 2022. The new Canadian Drug Agency would use a combination of two lists as a starting point when creating an initial essential medicines list—The World Health Organization’s Model List of Essential Medicines (approx. 450 drugs), and The CLEAN Meds list (136 drugs) developed by clinicians and researchers at St. Michael’s Hospital in Toronto. The drugs selected for the initial formulary should also be aligned with the National Formulary’s guiding principles, as mentioned above.

A fully comprehensive National Formulary should be in place no later than January 1, 2027.

Financing National Pharmacare

Although the council recommended several points of consideration for funding a National Pharmacare program, their focus was to make recommendations on the design and implementation of National Pharmacare, and no recommendations have been put forth on how to fund the program.

It is important to note that the widely reported cost of $15.3B by 2027 is the estimated cost over and above current public plan drug spend in Canada, it does not include the costs associated with:

  • Formation of a new Canada Drug Agency
  • Ongoing studies on drug efficacy, value-based outcomes, etc.
  • Ongoing reviews of program efficacy
  • Building and maintaining a nationally integrated claims payment infrastructure
  • Data security and storage
  • The imposition of recommended new legislation for the National Pharmacare program to stand independently from the Canada Health Act