Taxpayers Federation: new report shows government pharmacare could cost far more than promised
- New report suggests annual cost of government pharmacare plan could be $10 billion more than projected
- Analysis suggests existing projections underestimate demand spike for drugs while overestimating single-buyer cost savings
OTTAWA, ON: The Canadian Taxpayers Federation today released the Universal Pharmacare Risk Analysis Report prepared by RSM Canada, which concludes that a federal government pharmacare program for prescription drugs is likely to cost far more than projected.
“Proponents of government pharmacare simply assert that it will save Canadians money, but the bottom line is that it probably won’t, and is just as likely to see overall costs increase,” said CTF Federal Director Aaron Wudrick. “In their rush to cheerlead for a massive new government program, it turns out pharmacare fans have been making some very optimistic assumptions.”
RSM Canada’s risk analysis, building upon estimates produced by both the Advisory Council on the Implementation of National Pharmacare and the Parliamentary Budget Officer, focuses on two key variables, namely the anticipated demand spike in prescription drug use resulting from reduced out-of-pocket costs, and the anticipated savings resulting from the single-buyer negotiation of lower drug prices.
“What this report suggests is that existing projections are likely underestimating the resulting spike in demand for prescription drugs, while at the same time overestimating the prospective cost savings resulting from a single buyer,” said Wudrick.
In terms of total costs, the report concludes that there is a 50 per cent likelihood that government pharmacare will actually lead to higher, rather than lower, total costs to Canadians.
“We have seen this movie countless times before: a big new government program that is supposed to save us money, but actually ends up costing us more,” said Wudrick. “When it comes to completely overhauling a system that already works well for 80 to 90 per cent of Canadians, it’s fair to ask whether such a gamble is worth the risk.”