A pharmacare program operated by the government of Canada may cost more than initially thought, according to a report released Tuesday.
The Universal Pharmacare Risk Analysis Report suggests that the annual cost of operating a federal prescription drug program may cost $10 billion more than initially anticipated. The report was commissioned by the Canadian Taxpayers Federation (CTF) and prepared by RSM Canada.
Aaron Wudrick, the CTF's federal director, said he believes any such program may not be as advertised.
"Proponents of government pharmacare simply assert that it will save Canadians money, but the bottom line is that it probably won’t, and is just as likely to see overall costs increase," said Wudrick. "In their rush to cheerlead for a massive new government program, it turns out pharmacare fans have been making some very optimistic assumptions."
The Parliamentary Budget Officer had estimated in the fall of 2017 that the net cost of a national pharmacare program would be $19.3 billion. This figure comes after accounting for consumption and price adjustments and estimated revenues from co-pays. However, the CTF report focused on two variables. One is the anticipated increase in demand for prescription drugs thanks to decreased out-of-pocket costs. The other is the expected savings resulting from the single-buyer negotiation of lower drug prices.
When figuring total costs, the CTF report stated that there is a 50 per cent chance that the program will cost Canadians more for prescription drugs, rather than less.
"We have seen this movie countless times before, a big new government program that is supposed to save us money, but actually ends up costing us more," said Wudrick. "When it comes to completely overhauling a system that already works well for 80 to 90 per cent of Canadians, it’s fair to ask whether such a gamble is worth the risk."
According to the federal government's Advisory Council on the Implementation of National Pharmacare, a national pharmacare system would replace a patchwork of thousands of plans across Canada. Twenty per cent of Canadians do not have the drug coverage they need. The council is chaired by Dr. Eric Hoskins, the former Ontario Minister of Health.
The entire report can be read by going to the official CTF website.
