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CLHIA responds to Parliamentary Budget Office’s cost estimate of a single-payer universal drug plan

News Release

Release Date: 10/12/2023
Staff Reference: Kevin Dorse

(Toronto, October 12, 2023) Today the Parliamentary Budget Office (PBO) confirmed the insurance industry’s projection that a single-payer model of national pharmacare program will cost $40 billion annually as a result of shifting over $14 billion in private insurance coverage onto the government’s books. Such a program will also result in millions of Canadians having less drug coverage than they do today. 

The PBO’s revised costing demonstrates that a single-payer model would cost government a total of $38.9 billion in 2027-28. 

In 2022, insurers paid $14.3 billion in drug costs under workplace health benefit plans – accounting for over a third of prescription drug spending in Canada. Under a single-payer plan, this entire cost – which grew at eight per cent last year - would shift to government balance sheets. 

In addition, 27 million Canadians may lose coverage for drugs they can access today through workplace benefits plans. The estimate released today is based on the national application of Quebec’s drug formulary. While the province’s list is considered among the best of any public plan, it still covers about 7,000 fewer drugs than most private drug plans, including drugs that treat conditions like cancer and diabetes. The estimate does not consider who will carry the cost for these necessary medications. 

“A single-payer program will spend unnecessary billions to disrupt existing workplace health benefit plans that are already making a larger number of prescription drugs more affordable for millions,” said Stephen Frank, President and CEO of the Canadian Life and Health Insurance Association. “A $40 billion pharmacare program will shift costs to the government, and cause disruption as people find their medication is no longer covered, and employers consider dropping plans or reducing coverage.” 
The CLHIA supports a three-point plan to achieve universal drug coverage for Canadians, reduce costs and improve drug coverage overall, without disrupting plans that 27 million working Canadians rely on: 

  • A national formulary, which could include a list of essential medications that all Canadians must be able to access through both public or private plans.
  • Financial support to provinces and territories so that all jurisdictions can deliver all medications on the national formulary through their public plans.
  • Public and private plans to work together to ensure that Canadians can benefit from lower prices on medications. 

About the CLHIA 
The CLHIA is a voluntary association whose member companies account for 99 per cent of Canada's life and health insurance business. These insurers provide financial security products including life insurance, annuities (including RRSPs, RRIFs and pensions) and supplementary health insurance to over 29 million Canadians. They hold over $1 trillion in assets in Canada and employ more than 170,000 Canadians.  

For more information: 
Kevin Dorse 
Assistant Vice President, Strategic Communications and Public Affairs 
(613) 691-6001 /