A government-run pharmacare monopoly would do more harm than good
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As nearly a decade of the Trudeau government comes to an end, it seems Ottawa still has at least one more fight it wants to pick with the provinces. Provincial jurisdictions be damned, Health Minister Mark Holland wants to impose his national pharmacare scheme.
Despite vocal resistance from several provinces, the Trudeau government pushed through its pharmacare bill in October, calling it the foundation for an expanded national program. Ultimately, the goal is a government-run monopoly on prescription drug coverage. Now, with the government’s time running out, Holland is scrambling to lock down deals with other provinces.
His concern is that a Poilievre government will undo these efforts—and it should.
Provinces are not raising concerns just to protect their jurisdiction. Their opposition highlights serious practical issues with the program. While the goal of ensuring Canadians can access the prescription medication they need is laudable, the current plan would harm millions of people.
Although the initial deals focus only on birth control and diabetes medications, Ottawa has made its ultimate objective clear: a single-payer pharmacare program under federal control.
For many Canadians, this would mean worse coverage, not better. On average, private plans cover 51 per cent more unique drugs than government-run plans. Forcing everyone onto a government plan would shrink the list of covered medications, leading to lower-quality coverage.
Even if the public plan mirrored Quebec’s system—which is the most extensive public drug plan in Canada—21.5 million Canadians would still lose access to more generous private insurance. Many would face a difficult choice: switch medications or pay out of pocket. That’s hardly an improvement.
There’s another major issue. Coverage under at least one insurance plan is a key factor pharmaceutical companies consider when deciding whether to distribute medication in a given country.
Like it or not, drug manufacturers aren’t eager to file mountains of paperwork and navigate Canadian regulations unless they see a large enough market to justify the cost. If Ottawa replaces private coverage with a government monopoly, companies may decide not to offer certain medications here at all. That means some patients may not even have the option to pay for their treatment themselves.
Approval delays for newer medications would also become a bigger problem.
- In the private sector, it takes an average of 226 days for an insurer to decide whether to cover a new drug after Health Canada approves it.
- In the public system, that decision takes more than three times as long—an average of 732 days.
These extra 500 days—almost a year and a half—are an unnecessary burden on Canadians who need cutting-edge treatments. Expanding these delays to 21.5 million more people would only make the problem worse. Not every patient can afford to wait that long.
This isn’t to say that Canada’s current mix of public and private drug insurance is perfect. It provides medication access to nearly 90 per cent of Canadians, but 4.9 million still lack coverage for various reasons. Some don’t need it, some lack information, and others simply can’t afford it.
Among them, 1.1 million Canadians are completely ineligible for prescription drug insurance. That means even if they had the money and wanted to buy coverage, they wouldn’t be able to.
If Canada truly wants to improve access to medication, the government should target its efforts at these groups.
Quebec has already taken this approach. Its government-run plan acts as a mandatory backstop for those who don’t have private insurance. The system ensures a minimum level of coverage while still allowing patients to choose between public and private options.
Before Holland rushes to finalize more deals, he should look at what the provinces already know. A federal monopoly on drug insurance would force millions of Canadians into worse coverage, longer delays, and fewer choices.
Emmanuelle B. Faubert is an economist at the Montreal Economic Institute, a think-tank with offices in Montreal, Calgary and Ottawa.
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