What you need to know about a universal prescription drug plan

Canadians should have access to prescription drugs free of charge, a panel tasked with examining the need for pharmacare in Canada has recommended.

The Citizens’ Reference Panel on Pharmacare in Canada report calls on the federal government to adopt a national, publicly funded pharmacare plan, as part of Canada’s universal healthcare system.

A pharmacare program would see prescription drugs covered through a publicly funded system, rather than individuals paying for drugs out of pocket.

Here’s what you need to know about Canada’s current system, compared with national pharmacare.

Canada’s current system

Canada is the only developed country in the world with a universal healthcare program that doesn’t include prescription drugs, according to the Wellesley Institute. Canadians also pay some of the highest prices for prescription drugs.

Right now, Canada has a patchwork of public and private drug coverage, leaving gaps that some individuals needing prescription drugs struggle to fill.

A quarter of Canadians without insurance can’t afford the drugs they need, a 2012 study found, and 10 per cent of people with insurance struggle to pay for their prescription drugs.

What drugs are covered can vary province-by-province.

READ MORE: How the prices of life-saving drugs skyrocket overnight

Traditionally, provinces would strike deals with drug companies individually, missing out on opportunities to buy in bulk, at a lower price, as a whole nation. In recent years the provinces have formed an alliance to leverage better deals.

As of April, the pan-Canadian Pharmaceutical Alliance had completed 95 joint negotiations for buying brand-name drugs, saving $712 million in the process; as of late October, 125 joint negotiations had been completed.

READ MORE: Some Canadian patients struggling to pay for cancer treatments

How much pharmacare would cost

National pharmacare could save Canada $7.3 billion per year, a 2015 study found. Researchers from UBC and the University of Toronto found that a national drug program would save citizens and corporations more than $8 billion annually, and cost the government about $1 billion per year.

“Universal public drug coverage would likely yield substantial savings to the private sector with comparatively little increase in costs to government,” the study stated.

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The reasearchers factored in an increase in prescription drug use, due to those currently not being able to afford their prescriptions gaining access.

READ MORE: Universal drug plan? Docs say it would save money, help Canadians

Increasing the use of generic drugs, coupled with the purchasing power of buying in bulk nationally, would add up to “significant savings.”

Also of note but not factored into their findings, Canadians having access to the drugs they need could decrease demand — and spending — on Canada’s health-care system.

A report from the Canadian Federation of Nurses Unions, cited by the Liberals ahead of the 2015 federal election, indicated a national pharmacare program could save Canadian taxpayers as much as $11.4 billion annually.

Panel’s recommendations

All Canadians should be covered under a universal prescription drug plan, the panel said.

“Providing universal coverage to everyone will address the fact that millions of Canadians are currently uninsured or underinsured,” the report states.

“All essential, medically necessary drugs will be covered for all Canadians under the public system.”

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As a first step, the federal government should immediately identify and provide full access to a list of basic, frequently prescribed drugs.

READ MORE: How much do cancer drugs cost Canadians?

The drugs would be funded through “modest” tax increases for corporations and individuals, the panel wrote.

What the Liberals say

The Liberals have put their focus on reducing the costs of prescription drugs, rather than introducing a national pharmacare program.

“The focus of our platform is around reducing costs, and I think this is a really responsible approach,” Health Minister Jane Philpott told Global News shortly after the 2015 federal election.

WATCH: Jane Philpott discusses pharmaceutical prices in Canada

She acknowledged that people not being able to afford their medication places a toll on the health-care system, Philpott said.

“If we can make sure that people can afford those basic medications, there’s a ton of savings down the road, if we make sure those chronic conditions are well treated so that further conditions don’t deteriorate to the point that people require expensive hospital care,” said Philpott.

In January, the Liberals announced they were joining the provinces and territories in the pan-Canadian Pharmaceutical Alliance.

Global News has reached out the health minister for comment on the panel recommendations, but did not hear back by time of publication.

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— With a file from Carmen Chai