The Drug Business in the Context of Canadian Health Care Programs

Abstract

Outpatient prescription drugs are one of the few health benefits for which Canadians must usually pay out-of-pocket. Prescription drug insurance is becoming a popular fringe benefit in collective agreements, and some provinces are moving toward the inclusion of prescription costs in public medical care programs even in the absence of federal cost sharing. The drug business in Canada is characterized by oligopoly and imperfect competition, but government intervention in quality control and in retail pricing practices has proven effective; the total amount of money involved is trivial compared with the overall cost of health services; the issue is not particularly contentious at the present time; outpatient prescription drugs are likely to become a benefit under federal-provincial cost-shared health care programs at some future date.