Estimated effects of adding universal public coverage of an essential medicines list to existing public drug plans in Canada

Steven G. Morgan, Winny Li, Brandon Yau, Nav Persaud

Canada's universal health care system does not include universal coverage of prescription drugs. We sought to estimate the effects of adding universal public coverage of an essential medicines list to existing public drug plans in Canada. We used administrative and market research data to estimate the 2015 shares of the volume and cost of prescriptions filled in the community setting that were for 117 drugs on a model list of essential medicines for Canada. We compared prices of these essential medicines in Canada with prices in the United States, Sweden and New Zealand. We estimated the cost of adding universal public drug coverage of these essential medicines based on anticipated effects on medication use and pricing. The 117 essential medicines on the model list accounted for 44% of all prescriptions and 30% of total prescription drug expenditures in 2015. Average prices of generic essential medicines were 47% lower in the US, 60% lower in Sweden and 84% lower in New Zealand; brand-name drugs were priced 43% lower in the US. Estimated savings from universal public coverage of these essential medicines was $4.27 billion per year (range $2.72 billion to $5.83 billion; 28% reduction) for patients and private drug plan sponsors, at an incremental government cost of $1.23 billion per year (range $373 million to $1.98 billion; 11% reduction). Our analysis showed that adding universal public coverage of essential medicines to the existing public drug plans in Canada could address most of Canadians' pharmaceutical needs and save billions of dollars annually. Doing so may be a pragmatic step forward while more comprehensive pharmacare reforms are planned.