Canada spends more on prescription drugs per capita than nearly every other country with universal healthcare, yet it remains one of the few that does not include outpatient medications in its public coverage framework. The numbers tell the story plainly. Total prescribed drug spending climbed from $34 billion in 2019 to $44 billion in 2024, a 29% increase in just five years.
Where the Money Goes
Prescription drug costs in Canada are split across public drug plans, private insurance, and out-of-pocket payments. Approximately 40% of spending flows through public plans administered by provinces and territories. Private insurance covers another 35%, and the remaining 25% comes directly from patients.
The growth in spending reflects several converging factors: an aging population, the approval of high-cost specialty drugs, increased utilization of GLP-1 receptor agonists, and inflation across the pharmaceutical supply chain. Biologics and biosimilars now represent a growing share of drug plan budgets, with some treatments costing tens of thousands of dollars per patient annually.
PMPRB Guidelines: A Shift Toward Industry
The Patented Medicine Prices Review Board (PMPRB) plays a central role in regulating drug prices in Canada. In its latest guidelines, the PMPRB moved away from using therapeutic value as a primary factor in pricing decisions. Previously, the board assessed whether a new drug offered meaningful clinical improvement over existing treatments and priced accordingly.
The revised approach has drawn criticism from patient advocates and health economists who view it as more favorable to the pharmaceutical industry. By de-emphasizing therapeutic value, the guidelines may allow manufacturers to set higher launch prices for drugs that offer marginal clinical benefits over existing options. Critics argue this shift undermines the original purpose of the PMPRB and will accelerate spending growth.
Trade Tensions Add Uncertainty
The Trump-era tariff threats against Canada introduced a new dimension to the drug pricing conversation. While prescription medications were not directly targeted by proposed tariffs, the broader US-Canada trade tensions created uncertainty across the pharmaceutical supply chain. Canada imports a significant portion of its finished drug products and active pharmaceutical ingredients from or through the United States.
If trade relations deteriorate further, the cost of importing medications could rise. Currency fluctuations driven by trade disputes also affect pricing, since many drug purchases are denominated in US dollars. For a national pharmacare program, these external pressures could significantly increase the projected cost of universal coverage.
The Pharmacare Argument
Advocates for national pharmacare point to the $44 billion spending figure as evidence that the current system is unsustainable. A 2019 advisory council report estimated that a universal, single-payer pharmacare program could save the healthcare system $5 billion annually through bulk purchasing power and administrative efficiency.
The federal government took a step forward with the Pharmacare Act in 2024, initially covering diabetes medications and contraceptives. However, the legislation represents a narrow starting point rather than the comprehensive program that researchers and advocacy groups have called for over the past two decades.
Provinces remain divided. Some view federal pharmacare as an intrusion into provincial jurisdiction over healthcare delivery. Others welcome the potential for cost savings but want assurances about sustained federal funding. The patchwork of existing provincial drug plans, each with different formularies, co-payments, and eligibility criteria, creates inequities that a national program could address.
What Patients Experience
Behind the billions in aggregate spending are individual Canadians making difficult choices. An estimated one in five Canadians reports not filling a prescription due to cost. Those without private insurance and who do not qualify for provincial drug plans face the highest burden. Part-time workers, gig economy participants, and recent immigrants are disproportionately affected.
Even patients with coverage encounter gaps. Many private plans cap annual drug benefits, leaving patients with chronic conditions to cover the excess. Provincial plans often require patients to try lower-cost alternatives before approving coverage for the prescribed medication, a process that can delay effective treatment.
The Path Forward
The $44 billion question is not whether Canada can afford pharmacare but whether it can afford to continue without it. Every year of delay means higher costs, more patients skipping medications, and a growing gap between Canada and its peer nations.
At PlusVirtual, we believe accessible, affordable pharmacy services are foundational to better health outcomes. We support policies that reduce barriers between patients and the medications they need.