The financial burden of out of pocket prescription drug expenses in Canada

Abstract

Pharmaceutical expenditures account for approximately 15.9 % of total health expenditures in Canada. Unlike hospital and physician services, in which costs are universally covered, most pharmacological therapy does not fall under the umbrella of ‘medically necessary’ services set out by the Canada Health Act, and therefore is funded through a mix of public and private plans. Little is known about the actual financial burden experienced by Canadians from out-of-pocket drug expenditures (OOPDE). This paper examines the burden of OOPDE in Canada. 1.1 % of Canadian households exceed our catastrophic threshold (9 %) of the drug budget share. Additionally, 2.6 and 8.2 % of households exceed lower thresholds of 6 and 3 % respectively. We find an inverse relationship between household income and the burden of OPPDE. Low-income households have the highest likelihood of being in the ‘catastrophic’ drug expenditure category. This finding suggests that a vulnerable population of ‘working poor’ are likely to be experiencing disproportionate financial burden because they are not eligible for public assistance programs. Seniors experience the highest burden of OPPDE when compared to other age groups. We also find that there is significant interprovincial variation in the burden of OOPDE, which partly reflects different provincial government drug coverage policies.

Appendix

See Table 5.

Table 5 Distribution of any expenditure on out-of-pocket prescription medicine in Canada, 2009