A new expert committee report recommended that Canada implement a universal pharmacare system that provides free access to essential medicines to anyone with a health care while allowing private insurance to continue covering additional prescriptions.
The report, released Friday, calls for a single-payer model to strengthen public health coverage and reduce reliance on patchwork provincial agreements.
Navindra Persaud, chair of the advisory committee and a physician at St. Michael's Hospital in Toronto, said the program "can and should be implemented now." The committee was tasked with advising Health Minister Marjorie Michel on setting up and funding a universal pharmacare program following the Pharmacare Act, which became law in October 2024.
The report noted that the first phase of pharmacare, which covers contraceptives and diabetes medications, depends on bilateral agreements with provinces and territories. Only four agreements have been signed since the law's enactment, highlighting the inefficiency of the current approach.
The committee argued that a national essential medicines list would remove the need for such negotiations and ensure equitable access for Canadians.
From an insurance perspective, the proposed pharmacare system would preserve the role of private coverage for drugs not includes on the essential medicines list. Patients would either rely on their existing private insurance or pay out of pocket for non-esential medications. This hybrid model ensures that private insurers continue to participate in the market while shifting the financial burden for commonly prescribed, low-cost and high-need medications to the public system.
The expert committee estimated that implementing the essential medicines list would cost between $6 billion and $10 billion, though net costs to taxpayers would be closer to $3 billion due to bulk purchasing and redirected funding from existing provincial drug plans.
Insurers could see changes in claims patterns, as prescriptions for covered essential medicines would no longer generate claims, potentially reducing premium costs for group and individual plans, while increasing the focus on supplemental coverage for non-essential drugs.
Persaud highlighted that opposition to universal pharmacare often stems from potential reductions in profit for private insurers and pharmaceutical companies. Nonetheless, the report emphasized strong public support and urges the government to enshrine pharmacare in law, explicitly recognizing the “right to essential medicines.”
By doing so, Canada could provide more predictable coverage, stabilize the insurance market, and improve equity in access to critical medications.
This system would allow private insurers to complement the public plan, ensuring Canadians maintain flexibility and coverage for medications beyond the essential list while significantly reducing out-of-pocket expenses for routine prescriptions.
