CHP Canada Says OTC Drugs Should Qualify for METCBy Andrew Rickard | August 20 2015 08:58AM
A report from Consumer Health Products Canada (CHP Canada) suggests that the current health system is punishing those who do not have benefit plans at work, and says that over-the-counter (OTC) drugs should be made exempt from the HST/GST and qualify for the Medical Expense Tax Credit (METC).
In order to save a few dollars on their medications, CHP Canada says that people with drug plans are more likely to head to the doctor's office instead of the drug store; survey data released on Aug. 18 shows that Canadians with drug plans were 66% more likely to see a doctor for a minor ailment than those who do not have coverage. On the other hand, those who are without drug coverage have to pay out-of-pocket for non-prescription medicines.
The association of OTC medication manufacturers says the current system rewards visits to doctors for prescription renewal, meaning that people who have drug plans are clogging up physicians' offices with minor aches and sniffles.
Gerry Harrington, vice president of policy at CHP Canada, believes that the current tax system for OTC drugs is counter-intuitive. "The less education and lower the income Canadians have, the less likely they are to have a drug plan, so the more HST/GST they are paying to treat their family's minor ailments when they buy non-prescription cough medicine, headache relievers or allergy medicine," he says. "At the same time, taxing all OTCs and excluding them from the METC drives wealthier Canadians with drug plans to visit the doctor for minor ailments, when approved, evidence-based, responsible self-care options are readily available in the aisles of their local pharmacy."
In a position paper issued last week, CHP Canada argues that making certain consumer health products eligible for the METC or exempting them from the GST would help to make the Canadian healthcare system more sustainable. "Canadians who practice responsible self-care for minor ailments are less likely to visit a doctor for these minor ailments, freeing up space in the health system for those who need it most," reads the report.