HealthcarePapers 4(3) April 2004 : 10-20.doi:10.12927/hcpap..16871
Invited Essay

Post-Romanow Pharmacare: Last-Dollar First … First-Dollar Lost?

Steven G. Morgan and Donald J. Willison


Canada's public-private mix in coverage for pharmaceuticals has long created variation across provinces in access to needed treatments and has contributed to persistent cost growth in both the private and public sectors. Among the recommendations of the 2002 Romanow Commission was a proposed national standard for "last-dollar" pharmacare that would cover any household's drug costs beyond a high annual deductible. Such a program contrasts with the "first-dollar" pharmacare programs currently available for vulnerable populations (e.g., seniors and social assistance recipients) in most provinces. While last-dollar coverage may be a valuable set toward broadening public pharmacare in Canada, there is a risk that provincial governments may interpret the coverage of catastrophic costs as the new pharmacare ideal and therefore reduce or eliminate existing programs that currently offer first-dollar benefits.

This paper describes the merits of both first-dollar and last-dollar coverage for pharmaceuticals. The authors highlight the fact that the insurance-model of pharmacare cannot be used to devise sound policy because drug benefits do more than simply protect individuals against unpredictable misfortune. Broader policy goals of equity and efficiency goals must be considered in pharmacare design. The argument is made that, with federal support, a universal last-dollar pharmacare system will improve financial equity by alleviating the most glaring intra- and inter-provincial disparities in coverage. Because the maintenance of targeted drug benefits for vulnerable populations and building new programs to meet disease management needs with evidence-based care would improve efficiencies in the broader healthcare sector, they should be considered as the next steps for pharmacare policy, facilitated through new injections of federal funding for the last-dollar pharmacare programs. Finally, the policy and research communities should work together to explore how the data generated by universal pharmacare programs can be used to measure and monitor the performance of products and policies in the system.



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