Despite recently breaking its agreement with the Liberal Party of Canada, the New Democratic Party has achieved its goal: after weeks of Senate review, the Pharmacare Act, establishing a national and universal federal drug insurance program, received Royal Assent on October 10, with the first phase immediately coming into force. 

The bill was introduced in the House of Commons in February 2024. Since then, it has been scrutinized by MPs and senators, and after eight months of work and consultations, it is still unclear whether private insurers will continue to cover prescription drugs. Justin Trudeau’s government remains committed to a “single-payer” system, leaving ambiguity regarding the continued role of private insurers. 

Initially, the federal Health Minister, Mark Holland, was ambivalent about the program, insisting that Canadians would still have a choice between private and public plans, Conservative Senator Don Plet reminded the Senate on October 10, just before the bill was passed. But ultimately, at the last minute, the truth came out when Minister Holland revealed that the political objective of Bill C-64 was to strip Canadians of their private health coverage, he said. 

Bill C-64 is actually a Trojan horse, he added. Minister Holland officially confirmed in writing to the committee that the bill's ultimate goal is for the federal government to cover all prescription drugs in Canada, which would effectively eliminate private health care for millions of Canadians, he contended. 

The Act mandates that the newly established Canada's Drug Agency must, within one year of its enactment, develop and present a list of essential prescription drugs and related products. This list will serve as the foundation for creating a national formulary. 

Contraceptives and diabetes medications as first priorities 

The first phase of the program will focus on women and people living with diabetes. The program will provide medications to 3.7 million Canadians with diabetes and offer free contraception to more than 9 million women across the country. According to researchers from the University of British Columbia, contraceptives can cost a woman over $19,000 during her lifetime. 

In a submission, the Canadian Life and Health Insurance Association (CLHIA) highlighted that in 2023, workplace group insurance plans reimbursed around $1.7 billion in diabetes-related medications. Based on their analysis, 85 per cent of these costs would not be covered by the federal plan, according to a briefing from Health Canada

Advocating for the role of private insurers 

The October 10 press release from Health Canada made no mention of the role or contributions of private insurers in covering prescription drugs. 

During the Senate’s final reading of the bill, Senator Judith G. Seidman defended the importance of private insurers. She reminded her colleagues that many countries in the Organisation for Economic Co-operation and Development (OECD) have adopted multi-payer insurance systems. 

  • France, for instance, has a universal insurance system, but over 90 per cent of French citizens contribute to a voluntary private supplemental insurance plan. 
  • In Germany, while there is a universal system, individuals earning more than $90,000 annually can choose to join a private health insurance scheme instead. 
  • The Netherlands also has a universal system, but over 80 per cent of Dutch citizens voluntarily contribute to a private supplemental insurance plan. 

A universal system does not mean a single-payer system, Seidman pointed out. Many countries comparable to Canada have implemented legislated, multi-payer drug insurance systems that more closely resemble Quebec’s model than the one proposed in Bill C-64. 

Concerns from the pharmaceutical sector 

Seidman also highlighted warnings from key stakeholders in the pharmaceutical industry regarding the potential negative impacts of excluding private insurers from drug coverage. 

Benoit Morin, president of the Association québécoise des pharmaciens propriétaires (Quebec Association of pharmacy owners), believes that some Quebec pharmacies may not survive if they can only charge a single dispensing fee set by the province or territory, which is lower than what insurers currently pay. 

Dr. Shelita Dattani, representing the Neighbourhood Pharmacy Association of Canada (NPAC), said that an unintended consequence of a single-payer drug plan could be a reduction in pharmaceutical services and access to medications. 

Laura Syron, President and CEO of Diabetes Canada, fears that the removal of private coverage could negatively affect patients. If private insurance stops covering drugs that were previously reimbursed but are not included in the federal plan, patients may have to pay out-of-pocket, she warns.