Parliamentary Budget Officer Yves Giroux waits to appear before appearing at the Senate Committee on National Finance, Tuesday, October 25, 2022 in Ottawa. The parliamentary budget officer says a single-payer universal drug plan would cost the federal and provincial governments an additional $11.2 billion in the first year, and $13.4 billion in five years. THE CANADIAN PRESS/Adrian Wyld
OTTAWA – The parliamentary budget officer says a single-payer universal drug plan would cost federal and provincial governments $11.2 billion in the first year, and $13.4 billion in five years.
The PBO’s report, released on Thursday, provides an estimate for the cost of a pharmacare program between 2024-25 and 2027-28.
It calculates the incremental cost of the program, taking into account current spending by governments on public drug plans as well as revenue that would be generated from co-pays under a pharmacare plan.
The Liberals have promised to table pharmacare legislation this fall as part of the supply-and-confidence deal the government struck with the NDP.
The report finds that a single-payer universal drug plan would lead to economy-wide savings, despite the fact it estimates that the use of prescription drugs would rise by 13.5 per cent.
That’s because the report assumes that the implementation of a single-payer universal plan would allow for better price negotiations, leading to lower drug prices.
The PBO estimates cost savings on drug expenditures of $1.4 billion in 2024-25, with that figure increasing to $2.2 billion by 2027-28.
The report also looks at alternative coverage plans, as the federal government continues to work on what form a pharmacare program could take.
A plan that only covers catastrophic medicines, a term used to describe expensive drugs that could cause financial hardship, would cost governments an additional $400 million in the first year and $2 billion in five years.
Meanwhile, a plan that covers only essential medicines, which refers to medicines that address the priority health-care needs of a population, would cost an additional $2.4 billion in the first year and $12.1 billion in five years.
This report by The Canadian Press was first published Oct. 12, 2023.
