Understanding the Reality of High-Cost Drugs in Canada

by | Jul 11, 2023 | Benefits Alliance Pulse

Plus, Gender Differences in Healthcare Usage Due to Drug Cost.

The reality of high-cost drugs in Canada is a pressing issue that demands comprehensive analysis and understanding. As drug expenses keep on rising, the effects are broad-reaching, influencing not just individual patients yet additionally healthcare suppliers, protection counsellors and entrepreneurs.

This week’s Benefits Alliance Pulse looks at the complexities surrounding patent laws and drug evaluation processes that contribute to these high costs. It sheds light on how Canadians are impacted by these prices and explores the financial constraints imposed by expensive medication.

We will further discuss new regulations aimed at lowering prescription drug costs in Canada and Benefits Alliance’s recent submission for the future. The intricate relationship between public and private insurance amidst this reality of high-cost drugs will be examined alongside potential savings from secret rebate negotiations.


Financial Constraints Caused by Sky-High Medication Prices


High medication prices in Canada are causing financial hardship for many individuals. These costs often force patients to make tough choices, like sacrificing basic necessities or seeking additional healthcare services.


Patients’ Out-of-Pocket Expenses


Even with public and private insurance coverage, out-of-pocket expenses remain a major headache. Around one million Canadians admitted to cutting back on food and heat to afford their prescription medications. Talk about a prescription for financial disaster.

And guess what? Some populations experience more extreme monetary difficulties in terms of managing to pay for their required medicines. Some groups face bigger financial hurdles when it comes to affording their much-needed meds.


Gender Differences in Healthcare Usage Due to Drug Costs


A study by the Women’s Health Research Institute at UBC revealed that women are more likely than men to rely on healthcare services due to the financial burden of high-cost medications. It’s a gender gap that’s hard to swallow; women bear the brunt of prescription price pain.

This disparity can be attributed to factors like lower average income levels among women and a higher likelihood of chronic illnesses requiring ongoing treatment.


Potential Solutions & Considerations


  • National Pharmacare: A national pharmacare program could help ease the pain, but it needs careful planning and execution.
  • Fair Pricing Policies: Governments must ensure fair pricing policies that consider people’s ability to pay, not just market forces.
  • Better Coverage Plans: Insurers can offer great coverage plans for drugs with no maximums but one high-cost drug claimant can make claims way higher than the premium and drive cost up. It’s not a matter of offering coverage for expensive drugs – they do offer it. The impact over the long term is putting pressure on the sustainability of the business owner affording the plan.


In a nutshell, there’s no easy fix for this complex issue. It’s clear that all stakeholders need to take action to lighten the load on individuals and families struggling to afford their prescribed treatments. By employing the proper tactics, it is our expectation that access to essential drugs will become stable and reasonably priced for everyone, without regard to their socioeconomic status or gender.

Key Takeaway: High drug prices in Canada are causing financial strain for many Canadians, forcing them to make difficult choices and cut back on basic necessities. Women are particularly affected by the high cost of medications, as they have lower incomes on average and a higher likelihood of chronic illnesses requiring ongoing treatment. Potential solutions include implementing a national pharmacare program, fair pricing policies, and improved coverage plans from private insurers.


New Regulations Aimed at Lowering Prescription Drug Costs


High drug costs in Canada? Not for long. The Canadian government is taking decisive steps to reduce the cost of medications in Canada. Starting July 1st, 2023, new regulations are in place to bring down prescription drug prices across the board.


Government Response to Soaring Drug Costs


The Canadian government has a plan to make medications more affordable and accessible. They’re increasing transparency and flexing their negotiation muscles with pharmaceutical companies.

To shed light on the murky world of drug pricing, manufacturers now have to spill the beans on any secret discounts they give to the Federal Drug Price Regulator. This move will not only cut medication expenses but also expose the hidden tricks of the pharmaceutical trade.


Transparency is Key


Before these changes, drug discounts were kept hush-hush, leaving Canadians in the dark about how their meds were priced.

  • Federal oversight: The government is keeping an eye on discount negotiations to make sure the savings go to consumers, not corporations.
  • Pricing benchmarks: When setting maximum allowable prices, regulatory bodies will now look at prices in countries where drugs are cheaper.
  • Affordability assessment: New guidelines require evaluating whether Canadians can actually afford new patented medicines before they hit the market.


These reforms aim to level the playing field and rein in the skyrocketing costs of high-priced prescription drugs. It’s a move in the correct course, yet there is still more to be done.


Challenges Surrounding Expensive Prescribed Treatments


Canada’s universal health insurance system is like a superhero, but even superheroes have their weaknesses. In this case, it’s the high cost of prescribed treatments that’s causing a headache. Cue the discussions about “universal pharmacare”.


Universal Health Insurance System Vs Reality Of High-Cost Drugs


Despite its lauded healthcare system, Canada falls short when it comes to prescription drugs, with many having to be paid for out-of-pocket. While hospitals and doctors are covered, prescription drugs are often an out-of-pocket expense. Ouch.

And it gets worse when you look at the price tags on specialty drugs for complex or rare conditions. These meds are like unicorns – rare and expensive.


Public And Private Insurances – A Complex Mix


Trying to navigate the world of drug coverage in Canada is like solving a Rubik’s Cube. Navigating the Canadian drug coverage landscape is like untangling a jumbled ball of yarn – it’s an intricate blend of public and private insurance plans, with variations from region to region. Some offer drug benefit plans for seniors or low-income folks, while others only cover specific diseases. It’s a patchwork quilt of confusion.

And get this – about two-thirds of Canadians rely on private insurance plans, usually from their employers, to cover their medication costs. It’s like playing a game of “Will my insurance cover this?” every time you need a prescription filled.

According to Statistics Canada, about 23% of Canadian households had to shell out their own money for prescription meds in 2017. That’s a lot of loonies.


The Voice of the Industry


Benefits Alliance recently submitted an open letter to Federal Government leaders on behalf of their members and the companies they represent to share a perspective that handles many pharmacare claims each day. Even with a lot of news surrounding the topic, no formal decision has been made. In the meantime, you can read the open letter here and stay tuned for more updates.


FAQs in Relation to the Reality of High-Cost Drugs in Canada


Why are drugs so expensive in Canada? The high cost of drugs in Canada can be attributed to the country’s patent laws, drug evaluation processes, and lack of competition. For more information on this topic, you can visit Health Canada.

Does Canada control drug prices? Yes, through the Patented Medicine Prices Review Board (PMPRB), which ensures that prices for patented medicines sold in Canada are not excessive.

Why are drugs more expensive in the US than in Canada? In contrast to the U.S., the Canadian government regulates medicine prices leading to lower costs. This difference is explained further by NCBI research.


How are drug prices set in Canada? The PMPRB sets maximum price ceilings for new patented medications entering the market based on a comparison with seven other countries. The process is detailed on the PMPRB Guidelines page.