Authors
Mark Rovere (Ph.D. candidate), Brett J Skinner (Ph.D.)
Introduction
There are proposals currently being advanced to replace private drug plans in Canada with a government-run monopoly public drug plan known as Pharmacare.
Objective
This study compares the quality of coverage for new drugs under public versus private drug plans in Canada.
Data
Data were obtained from Health Canada and IMS Health Canada Inc. covering the period from January 1, 2004 to January 31, 2015.
Results
Private drug plans covered far more new drugs than did public drug plans. Private drug plans also covered new drugs far more rapidly than public drug plans.
Conclusions
The quality of drug coverage is far better in private than in public drug plans in Canada. Government-run drug plans tend to deprive patients of access to the most advanced medicines available. Competition between private drug plans drives a socially beneficial “race to the top” to provide the best possible access to the most advanced treatments available. Universal drug insurance is best achieved by subsidizing low-income individuals so they can afford private coverage. A drug insurance system that expands access to private drug coverage and enhances competition between drug plans will produce the highest level of benefits for Canadians. The findings of this report are strongly indicative of the low generosity of benefits that can be expected from a government-run Pharmacare program, and confirm that greater benefits tend to accrue to patients from a competitive market for drug insurance in Canada.
