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National pharmacare plan could save up to $10.7 billion a year - study

Private drug plans do poorly in comparison with public.

Canadians cannot afford not to have universal pharmacare - CCPA.OTTAWA, September 13, 2010: A universal public pharmacare plan could generate savings of up to $10.7 billion on prescription drugs, says a new study released today by the Canadian Centre for Policy Alternatives (CCPA) and Institut de recherche et d'informations socio-economiques (IRIS).

The study, by Carleton University professor and Harvard research fellow, Marc-André Gagnon finds Canadians could save between 10% and 42%-up to $10.7 billion-of total drug expenditures, depending on the choice of industrial policies related to drug costs.

"Canadians cannot afford not to have universal pharmacare," says Gagnon. "Canada's pharmaceutical policies are a total failure: many Canadians do not have equitable access to medicines; the lack of coverage makes some treatments inefficient; and the whole system is unsustainable because we currently cannot control the growth of drug costs."

The study compares various provincial drug plans, identifies problems with the status quo, shows how private drug plans are inefficient, and calculates the savings that could be achieved through a publicly-funded universal drug plan providing first-dollar coverage.

According to the report, Canada is the world's third most expensive country for brand name drugs because Canada deliberately inflates drug prices in order to attract pharmaceutical investment.

"The cost of such policies far exceed the benefits to Canadians from having a domestic pharmaceutical industry," says Gagnon.

A national pharmacare program will have to find a balanced approach to ensure coherence across the country while respecting provincial health jurisdictions. But a clear policy backed by real political will would give all Canadians equal access to the best drug treatments available, while generating substantial savings over existing plans.

"The only hindrance to establishing a fair, effective drug insurance program is political apathy, not economic cost constraints," Gagnon concludes.

Posted: September 13, 2010

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