Research Project

Project Team

  • Contact: Steve Morgan
  • Gillian Hanley
  • Hude Quan, University of Calgary

Research Areas

Income-Based Drug Coverage: Lessons from British Columbia’s Fair PharmaCare Program

Methods

Through interviews with policy makers and key government officials involved with BC PharmaCare, CHSPR researchers identified the major objectives that motivated the implementation of income-based benefits. Then, using information about drug use, private and public expenditure and household income for all residents of BC (1996 to 2004), the research team evaluated the impact of Fair PharmaCare on drug expenditures, utilization and sources of payment for seniors and non-seniors of different income levels.

Findings

  • In the immediate term, Fair PharmaCare met many of its policy goals. Government spending was reduced. Access to medicines was maintained—though not enhanced. The distributions of private and public expenditures were brought more in line with income distribution.
  • The long-run impact of the policy will depend largely on how the government’s reduced role in pharmacare financing affects costs, access to medicines and financial equity. Reducing government’s stake in drug coverage may well reduce its ability to manage the drivers of drug expenditure.
  • As drug costs continue to increase more quickly than household incomes, financial equity across and within income groups may deteriorate.
  • A new national standard should be set for pharmacare that increases, not decreases, the share of publicly covered spending. The federal government could play a key role in this by helping provinces achieve a goal closer to 60 per cent public funding for prescription drugs, rather than the current provincial average of 40 per cent.
  • Fair PharmaCare did not have a significant impact on initial access to treatment or on continuation of treatment within two of the largest categories of drug treatment—anti-hypertension drugs and cholesterol reducing agents.
  • By decreasing the level of public subsidy to wealthy seniors and slightly increasing subsidy for low-income non-seniors, the allocation of private drug costs and of public drug costs was made slightly more progressive.
  • The implementation of Fair PharmaCare is estimated to have resulted in a direct transfer of roughly $134 million from the public side of the financial ledger to the private side.

Funding and Support

  • Canadian Institutes of Health Research
  • BC Ministry of Health