The redistributive effect of the move from age-based to income-based prescription drug coverage in British Columbia, Canada


Related Publications

Smolina K, Weymann D, Morgan S, Ross C, Carleton B. Association between regulatory advisories and codeine prescribing to postpartum women. Journal of the American Medical Association. 2015;313(18):1861-2.
Suter E, Misfeldt R, Mallinson S, Wilhelm A, Boakye O, Marchildon G, et al. Comparative Review of the Policy Landscape of Team-based Primary Health Care Service Delivery in Western Canada. Alberta Health Services; 2014.
Laberge M, Pang J, Walker K, Wong ST, Hogg W, Wodchis WP. QUALICOPC (Quality and Costs of Primary Care) Canada: A focus on the aspects of primary care most highly rated by current patients of primary care practices. Ottawa, ON: Canadian Foundation for Healthcare Improvement; 2014.
McGregor MJ, Abu-Laban RB, Ronald L, McGrail KM, Andrusiek D, Baumbusch J, et al. Nursing Home Characteristics Associated with Resident Transfers to Emergency Department. Canadian Journal on Aging. 2012;33(1):38-48.

Publication Topics

The redistributive effect of the move from age-based to income-based prescription drug coverage in British Columbia, Canada

Publication TypeJournal Article
Year of Publication2011
AuthorsHanley GE, Morgan SG, Barer ML, Reid RJ
JournalHealth policy (Amsterdam, Netherlands)Health Policy
Pages185 - 194
Date Published2011
KeywordsAge Factors, British Columbia, Databases, Factual, Financing, Personal/trends, Humans, Income, Insurance Coverage/legislation & jurisprudence/organization & administration, Insurance, Pharmaceutical Services/economics/legislation & jurisprudence, Models, Statistical, National Health Programs/legislation & jurisprudence, Policy, Prescription Drugs/economics
AbstractOBJECTIVES: To explore the redistributive impact of two different pharmaceutical financing policies (age-based versus income-based pharmacare) on the distribution of income in British Columbia (B.C.), Canada. METHODS: Using household-level data on all payments that are used to finance prescription drugs in B.C. (including taxation and private payments), we performed a redistributive analysis to indicate how much income inequality in the province changed as a result of payments made for prescription drugs. We also illustrated changes in vertical equity (different treatment according to ability-to-pay) and horizontal equity (equals, according to ability-to-pay, being treated equally) between the two years separately through a pre-post policy examination. RESULTS: We found that payments made to finance prescription drugs increased overall income inequality in the province. This negative impact was larger after the move to income-based pharmacare. Our results also show increasing horizontal inequity after the policy change, and suggest that the increased reliance on out-of-pocket payments was a major source of the negative impact on the B.C.'s overall income distribution. We also show that the consequences of the move to income-based pharmacare would have been less severe had the level of public financing not decreased substantially between the two years. CONCLUSIONS: The increase in income inequality in B.C. following the policy change was an unintended consequence of the move to income-based pharmacare. This finding is worth consideration as countries and jurisdictions weigh pharmaceutical policy alternatives.
Citation Key363