National Pharmacare: More Questions Than Answers
Among the policy challenges faced by new Health Minister Marjorie Michel is the future of national pharmacare. Enacted in the final months of the last Parliament, the Pharmacare Act sets out the principles guiding the federal policy to work towards “the implementation of national universal pharmacare” and to authorize federal transfers to provinces and territories (PTs) for selected medicines in the first phase.
Implementation has begun and the political direction, such as it is, is to “stay the course.” But many important questions remain about how national pharmacare will actually work in practice, how it will impact federal and provincial budgets, how it will impact existing coverage for patients, and whether or how it may be expanded and funded in future.
What We Know
Federal Budget 2024 allocated $1.5 billion over five years beginning in 2024-25 to “expand and enhance, rather than replace,” existing PT spending on selected drugs for diabetes and contraception. The eligible drugs listed by Health Canada largely include generic (and biosimilar) versions apparently based on an essential medicines list developed by St. Michael’s Hospital in Toronto. Each bilateral agreement will list the specific drugs that are to be covered in that jurisdiction.
The policy objective, as grounded in the legislation, is to provide universal, single-payer, first-dollar coverage for the listed contraception and diabetes prescription drugs and related products. The agreements to date provide that patients with a valid prescription and Provincial health card will receive the listed drugs free of charge at a pharmacy. If a patient is prescribed a more expensive version of the drug, they will be required to pay the difference. For someone with private coverage, the public plan will apparently supersede and displace the private plan with no coordination of benefits.
To date, the federal government has entered into bilateral agreements with four jurisdictions and coverage has commenced in two: Manitoba (April 15, 2025)1; PEI (May 1, 2025)2; Yukon (date to be determined between October 10, 2025 and January 30, 2026; and British Columbia (March 1, 2026).
During the 2025 election the Liberals (and to a limited extent, the Conservatives) pledged to maintain the existing federal pharmacare policy but were silent on future plans. Despite a much reduced Parliamentary caucus and the loss of official party status, the NDP can be expected to continue to push for further expansion.
What Don’t We Know
The cost of National Pharmacare.
Budget 2024 allocated $1.5 billion in federal funding for this initiative over five years.3 But the four bilateral agreements announced to date have already committed $928.5 million, or 62% of the total funding envelope. As the participating jurisdictions only represent 18% of the Canadian population, this raises essential and immediate questions: Has the government given up on including many of the remaining jurisdictions, or does it anticipate returning to Parliament to seek additional funding? Have the jurisdictions calculated if their bilateral agreements will result in any net added costs for their spending on medicines?
At the current moment there is no guarantee of federal funding past 2030.
Implications for existing drug plan design and coverage.
Federal legislation was always going to have to account for existing public programs and practices. Notably, the design of the existing Manitoba and B.C. pharmacare plans lines up more closely than other jurisdictions with the criteria in the Pharmacare Act.
But others, including the key provinces of Ontario, Québec and Alberta offer very different approaches to coverage that would require major restructuring. Québec in particular has already indicated it will not participate in the federal plan as currently construed but will no doubt seek equivalent and unfettered financial compensation. How easy will it be for the outstanding jurisdictions to accommodate the federal criteria, and at what cost?
Impact on patients.
One of the objectives of national pharmacare is to improve the affordability and accessibility of prescription drugs for diabetes and contraception. Most Canadians currently have coverage under public and private plans. The more appropriately precise set of questions are how many Canadians fall into each of these categories:
- Currently uninsured and eligible for coverage under national pharmacare;
- With private coverage and will be switched to public coverage; and
- Of those, the number who will be required to either switch to a listed medicine or pay the difference in cost to remain on prior therapy?
It is unclear whether existing private plans will now cover this difference and fill what will become new “gaps” in coverage.
Impact on private insurance.
Under National Pharmacare, public plans will replace private coverage for the listed medicines. But no government at any level has provided data to show how significant the impact will be. To what extent will the new public expenditures provide coverage for uninsured persons versus simply replacing private coverage? What will be the impact on private insurers? What is the risk of follow-on impacts on the remaining business of private insurers?
Further Roll-out.
The Speech from the Throne on May 27 said that the government will “protect” existing programs, including pharmacare. What is the expected schedule for additional bilateral agreements? Are there plans to expand pharmacare to more therapeutic categories? How will such decisions be made?
Conclusion
The federal pharmacare legislation was rapidly adopted with lofty goals and optimism. But legislation was adopted without a clearly-defined strategy for implementation.
Rather than reducing the patchwork nature of pharmaceuticals coverage in Canada, it appears it may create more complexity and uncertainty, and possibly open up new coverage “gaps” while creating financial challenges for Provinces and even Ottawa itself.
Footnotes
- The Manitoba Enhanced Pharmacare Program (MEPP), effective April 15, 2015 is available to holders of a Manitoba Health card without coverage under another public drug program. In addition to the listed drugs for diabetes and contraception, it also covers HIV drugs and hormone replacement therapy. https://www.gov.mb.ca/health/pharmacare/mepp.html#covered
- In PEI, the “National Pharmacare Plan” came into effect May 1, 2025. In PEI, it also covers blood glucose test strips. https://www.princeedwardisland.ca/en/information/health-and-wellness/national-pharmacare-program
- https://www.budget.canada.ca/2024/report-rapport/toc-tdm-en.html