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Advisory Council releases interim report on national pharmacare

The Advisory Council on the Implementation of National Pharmacare (the Advisory Council) released an interim report (the Interim Report) on March 6, 2019, which was reflected in the 2019 federal budget. The Interim Report sets the stage for further announcements on the federal government’s intentions with respect to pharmacare.


The establishment of the Advisory Council was announced in the 2018 federal budget. The Advisory Council released a discussion paper in June 2018, and has been reviewing public input and developing recommendations since that time. The Advisory Council is considering three key questions regarding the implementation of national pharmacare: who will be covered and under what circumstances, what drugs will be covered, and how it will be funded.

The Interim Report includes a description of major prescription challenges, initial recommendations, and core principles that should underpin the approach to national pharmacare.

Major prescription drug challenges

The Interim Report identifies three major challenges facing Canada with respect to prescription drug coverage:

  1. Too many Canadians cannot afford the prescription drugs they need;
  2. Access to prescription drug coverage is inconsistent across jurisdictions and populations; and
  3. Canada’s spending on prescription drugs is unsustainable.

Core principles of national pharmacare

The Interim Report identifies core principles to be considered in the Advisory Council’s final report. According to the Interim Report, the federal government’s approach to national pharmacare should:

  1. Ensure that all Canadian residents have access to prescription drugs based on medical need, without financial or other barriers to access;
  2. Ensure that coverage is portable and consistent across all jurisdictions;
  3. Provide access to a comprehensive, evidencebased formulary, with special consideration for drugs for rare diseases;
  4. Be designed and delivered in partnership with patients and citizens;
  5. Be founded on strong partnership between federal, provincial and territorial governments and Indigenous peoples; and
  6. Include a robust pharmaceutical management system that promotes safety, innovation, value-for-money and the sustainability of prescription drug costs.

Initial recommendations

Regardless of which approach to national pharmacare is recommended, the Advisory Council believes the following foundational elements, which can be implemented immediately, are the building blocks to ensure the successful implementation of national pharmacare:

1. National drug agency

The Advisory Council recommends the establishment of an arms-length agency to manage and oversee national pharmacare. This national drug agency’s responsibilities would include conducting health technology assessments to evaluate the clinical evidence and value-for-money proposition of prescription drugs, conducting negotiations with manufacturers on drug prices and terms of listing,
developing and managing a national formulary, and supporting prescribers and patients to maximize best practices and improve health outcomes.

2. Develop a comprehensive, evidence-based national formulary

The Advisory Council recommends the federal government, in partnership with provinces and territories, Indigenous peoples, patients/citizens, and clinical and other experts, begin development of a comprehensive, evidence-based national formulary.

3. Invest in drug data and information technology systems

The Advisory Council recommends the federal government invest the financial and other resources necessary to enable federal, provincial and territorial governments to strengthen drug data collection and enhance their drug-related information technology systems to meet the goals and objectives of national pharmacare.

2019 Federal Budget

As mentioned in the March 2019 News & Views, the 2019 federal budget proposes to create a Canadian Drug Agency to review drug efficacy and negotiate drug prices. The Canadian Drug Agency is mandated to develop a national drug formulary in partnership with provinces, territories and other stakeholders.

In light of the creation of the Canadian Drug Agency, the role of the pan-Canadian Pharmaceutical Alliance (pCPA) is unclear going forward. For the past number of years, the pCPA has negotiated prescription drug prices on behalf of the federal, provincial, and territorial governments. Although private insurance companies, who underwrite and administer most private plans, have not been included in the pCPA, plan sponsors have benefited indirectly to some degree from negotiated cost savings.

The federal budget also promises a national strategy for high-cost drugs for rare diseases. The budget proposes new funding of up to $1 billion for two years for drugs that treat rare diseases beginning in 2022-2023, and up to $500 million per year thereafter.


The Advisory Council’s interim report stops well short of recommending universal, single-payer coverage and does not discuss how funding would occur. The initial recommendations are broad enough that they are compatible with many different potential forms of national pharmacare. The Advisory Council’s final report will be submitted later this spring and is expected to include a recommendation on a particular model for national pharmacare, along with details on how such a plan would be implemented, managed, and funded.

Private plans have been managing prescription drug costs rising at a rate well above inflation for years. For private plan sponsors, a national pharmacare program could offset or reduce costs but some form of funding for the government program could be mandated for employers.

Though many questions remain regarding national pharmacare, these announcements are an opportunity for private plan sponsors to reassess their plan offering. While many plans have already implemented proactive prescription drug management strategies, many other plans still feature dated, ineffective provisions. Along with reviewing prescription drug plans, leading organizations are increasingly focusing on prevention of health problems and overall employee well being. Many plans also have not been refreshed and modernized to consider the growing younger workforce try to address evolving employee needs. A Morneau Shepell consultant can assist organizations in optimizing their plan and programs for employees.

News & Views - April 2019 (PDF)