of the Advisory Council on the Implementation of National Pharmacare Recommendations

Final Report of the Advisory Council on the Implementation of National Pharmacare Recommendations

Retirement and Benefits

Issue 19-14
August 21, 2019


Over the past 12 months, the Advisory Council on the Implementation of National Pharmacare has examined several models of pharmacare insurance that are in place in Canada and abroad. The Advisory Council has travelled to every province and territory and has spoken and listened to hundreds of Canadians from all walks of life. All this work has allowed the Advisory Council to take a position and make several recommendations in its Final Report of the Advisory Council on the Implementation of a National Pharmacare Plan, published in June 2019. 

This report includes a list of 60 recommendations that outline all the elements the new national drug plan should respect to ensure its success and sustainability. The main recommendations are: 

The National Pharmacare Plan’s core principles 

The report recommends that the five main principles of Medicare listed in the Canada Health Act should be applied to the National Pharmacare Plan. These principles are: 

  • Universality: equal access for all residents of Canada.
  • Comprehensiveness: Providing a wide range of safe, effective and evidence-based treatments.
  • Accessibility: access based on medical need and not ability to pay.
  • Portability: benefits that are transferable from one province or territory to another.
  • Public administration: funded and administered by the government.

Creating a Canadian drug agency and developing a National formulary of Insured Drugs. 

The report recommends the creation of a new independent Canadian agency to oversee the national drug plan. The main functions of this agency would be: 

  • Evaluating the clinical effectiveness and cost-effectiveness of drugs compared to other treatment options.
  • Deciding which drugs the National formulary should contain based on evaluations and evidence.
  • Developing a national strategy on expensive drugs for the treatment of rare diseases.
  • Developing and maintaining drug management policies that appear on the formulary to ensure the sustainability of the National drug plan.
  • Negotiating prices and supply agreements with manufacturers.
  • Developing and implementing an appropriate national prescribing strategy to support prescribers and help patients better understand the pharmaceutical treatment options available to them.
  • Developing mandatory substitution policies for brand-name drugs by generics or biosimilars.

Coverage Terms 

The National formulary of insured drugs developed by the Canadian Drug Agency would become the minimum coverage available to all Canadian residents. However, the report also recommends that provinces and territories be able to offer more generous coverage. Private insurance supplementing the National drug plan coverage could also be available, which would include co-payments and drugs not listed on the National formulary of insured drugs. 

The report also recommends the following repayment parameters: 

  • $2 copayment for essential drugs.
  • Maximum contribution of $5 for other drugs.
  • Annual maximum of $100 per household per year.

Note that it is also recommended that persons receiving social assistance, government disability benefits or the federal Guaranteed Income Supplement be exempt from co-payments. 

Funding the National Pharmacare Plan 

In terms of funding the National drug plan, the report recommends that the Federal Government provide provinces and territories with adequate and predictable long-term funding to cover the additional costs of this plan. 

It is recommended that the National drug plan be funded from the general revenues of the Federal Government as is currently the case for the health insurance plan. 

Other considerations 

Several other recommendations are made in this report, including the required collaboration between Governments, Aboriginal participation, information technology systems and data collection, legislative changes, and the transition to this proposed new model. 

For more information on these recommendations, we invite you to consult the full report at the following link: https://www.canada.ca/content/dam/hc-sc/images/corporate/about-health-canada/public-engagement/external-advisory-bodies/implementation-national-pharmacare/final-report/final-report.pdf 

What we need to know 

The final report of the Advisory Council on the Implementation of National Pharmacare recommends a significant restructuring of the current system. Prescription drugs are an essential part of health care and the Advisory Council recognizes that currently Canadians do not have the same level of accessibility, the same ability to pay and the same protection. The proposed solution is to put in place a universal single-payer public drug plan. 

Such a plan would allow all private drug plan beneficiaries to reduce their premiums due to a transfer of drugs from their private plan to the National formulary. However, it is still far too early to know the potential financial impact of the proposed solution on private plans.  

Furthermore, the debate on establishing such a public plan persists, which risks in becoming an important electoral issue during the next federal election scheduled for the fall of 2019. The election outcome may risk influencing the next phase, which we will closely monitor for our clients.  

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