Free medications produce overall health-care savings in Ontario trial, new study suggests

Results from an experimental program that provides free prescription drugs to hundreds of people in Ontario suggest covering the cost of medication produces overall savings for the health-care system, according to a new study. (Shutterstock - image credit)
Results from an experimental program that provides free prescription drugs to hundreds of people in Ontario suggest covering the cost of medication produces overall savings for the health-care system, according to a new study. (Shutterstock - image credit)

Results from an experimental program that provides free prescription drugs to hundreds of people in Ontario suggest covering the cost of medication produces overall savings for the health-care system, according to a new study.

The research, published Friday in the journal JAMA Health Forum, tracked a total of 747 patients who reported that the high cost of drugs has forced them to leave prescriptions unfilled or stretch out the time between doses. About half were randomly selected to have their drugs fully covered.

After three years, the researchers found that providing prescriptions free of charge to these patients saved the public health-care system an average of $1,488 per patient per year, by helping to prevent such things as unexpected trips to the hospital.

"I was surprised by the magnitude of the savings," said Dr. Nav Persaud, one of the study's authors, a Canada Research Chair in Health Justice and a staff physician at St. Michael's Hospital in Toronto.

"It seems like eliminating medication costs both saves money in avoided hospitalizations, avoided emergency room visits, makes people healthier and addresses health inequities — it makes access to health more fair."

The study comes as Canadians wait to see if legislation enabling a universal pharmacare plan will be tabled by the end of 2023, as promised under the confidence-and-supply agreement between the federal Liberals and New Democrats.

Craig Chivers/CBC
Craig Chivers/CBC

The 128 medications included in the research are some of the most commonly prescribed in Canada and are used for treating conditions ranging from diabetes and high blood pressure to depression and schizophrenia. Persaud said these prescriptions usually cost anywhere from about a penny a day to more than $1,000 a treatment, with the typical patient paying $30 to $40 a month.

Health-care costs for the patients involved were calculated using administrative data from the Ontario system, tallying expenses including doctors' visits, trips to the emergency room and lab testing.

"This study adds to at least a hill, maybe a mountain, of existing evidence that providing people with free access to medicines makes sense," Persaud said.

Millions don't fill prescriptions because of cost

The U.K., Australia and New Zealand all provide universal coverage of pharmaceuticals through a public plan. A number of European countries, including France, Germany and the Netherlands, offer universal coverage through mandatory insurance enrolment.

Currently in Canada, limited pharmaceutical expenses are covered through provincial plans, which are mostly income-based and focused on people with exceptionally high drug costs.

But according to the federal government's advisory council on pharmacare, three million Canadians don't fill their prescriptions because of the cost, and another one million cut spending on food and heat to afford medication.

WATCH | The National's report on the free prescription drug study

The council noted in its 2019 report that Canadians currently pay more per capita for prescription medications than residents of any other country except for the United States and Switzerland.

"Sadly, far too many Canadians die prematurely or endure terrible suffering, illness or poor quality of life because modern medicines are out of reach for them," the report says.

"This is unacceptable."


Joshua Timm, 38, who works in the parts department of a truck dealership, said he has to scramble for cash every time he has to pay for the diabetes medications and devices he needs to stay alive.

"I've got to stay on top of my bank account, monitor weekly, to see what I can scrounge up ... just to see if I can get by," the resident of Pitt Meadows, B.C., told CBC News.

With a mortgage to pay, unexpected vehicle expenses and the high cost of groceries related to his celiac disease, Timm said he often has to turn to his parents for help.

The average diabetes patient pays about $25 a day to cover insulin, continuous glucose monitors and insulin pumps, according to the B.C. Diabetes Foundation.

In British Columbia, some of that is covered by the provincial pharmacare plan, but it's subject to a deductible that means a patient earning the median family income would first have to pay at least $2,500 out of pocket.

At the moment, Timm is using a continuous glucose monitoring (CGM) device, which tracks his glucose levels every few minutes, sensing dangerous drops even when he's asleep. These devices are covered under B.C.'s pharmacare plan in certain circumstances, and are subject to deductibles.

But the CGM sensor that Timm is using will expire next week, and the $300 cost for a new one will likely be too steep for his budget.

He said he would be "ecstatic" to have his drug costs fully covered under a national pharmacare plan so that he can afford a CGM.

Critics say universal pharmacare too expensive

There was no mention of the promised pharmacare bill in the 2023 federal budget, even though the NDP's deadline for tabling one expires this year.

Health Minister Jean-Yves Duclos said Friday that meeting the deadline is still part of the government's plan. He described the results of the Ontario study as "not surprising," and said it aligns with the bulk of the research on the topic.

"When people are not able to afford or to access essential drugs, they end up being in worse health conditions, conditions that are more difficult, more costly to to treat in in the future," he told CBC News.

Some of those who have opposed universal public pharmacare, including the Fraser Institute and the Canadian Taxpayers Federation, argue that a publicly funded universal pharmacare plan would be too expensive to be worthwhile and say most Canadians already have good drug coverage through their jobs or provincial programs.

But even Fraser Institute fellow Nigel Rawson, a Saskatoon pharmacoepidemiologist, said the new Ontario study demonstrates the importance of developing some sort of national pharmacare plan.

"There are expensive drugs that basically nobody can afford, whether they have a good income or a lower income," he said. "We need some way of getting those drugs to people who need them."

Rawson said he understands why his colleagues at the Fraser Institute generally oppose universal pharmacare, and he's "not a keen advocate" either. An effective plan, he said, might top up coverage for people who already have private insurance and provide full coverage for those who don't.

"It won't be cheap, don't get me wrong," Rawson said. "It boils down to, basically, what's a life worth?"


A 2017 report from the parliamentary budget officer pegged the gross cost of a universal pharmacare plan at $23.7 billion by 2021 but said the increased purchasing power created through a national plan would bring down drug costs by an estimated $4.2 billion every year.

Other research from a University of British Columbia and University of Toronto team suggested those savings could be even higher, at more than $7 billion each year.

Aidan Hollis, an economics professor at the University of Calgary, said the Ontario research on the health-care savings from providing free medications should put pressure on the federal government to act.

He described universal drug coverage as a key element of preventative care.

"Looking after people is very much like looking after a house. You've got to deal with all the maintenance, and if you don't, you end up with huge expenses which you weren't planning on," he said.

"If your concern was that you'd be paying for free medicines for somebody else who should be paying for them themselves, the thing is that if they don't get those medicines, they're going to end up in hospital — and then you're going to be paying even more."