Canada shouldn’t adopt New Zealand’s national pharmacare system, a new study from the Canadian Health Policy Institute argues.

The study by the think-tank examined prices for 248 drugs in nine clinical categories and found 74 per cent were approved for marketing in New Zealand, compared to 90 per cent in Canada. New Zealand also has a lower benefit listing rate — the number of the approved drugs that made it onto the national formulary — than seven of the 10 Canadian provinces.

Read: Canadians divided on benefits of a universal drug program: report

The study also found several drugs that once had marketing approval in New Zealand that no longer do. Nigel Rawson, the study’s author and an affiliated scholar with the Canadian Health Policy Institute in Oakville, Ont., thinks that’s because pharmaceutical companies that aren’t listed on the national formulary aren’t making enough money and therefore don’t bother applying for a renewal. And that means New Zealanders have less choice when it comes to their medication, he suggests.

“My main concern [in adopting a New Zealand-style pharmacare system] is there will be decisions to not approve, not fund new, expensive drugs or just to cut back on the formularies . . .,” says Rawson.

Read: Employers want to be heard on national healthcare

Rawson doesn’t propose an alternative plan but recommends involving all parties, including patients, physicians and private payers, in the conversation.

“I think it’s not going to be the comprehensive plan if they [private payers] are excluded or if people like seniors and social assistance recipients can still only get a basic plan and people with employment who have private insurance are going to get a superior grade plan,” he says.

The study also cautions reduced access to drugs could lead to more hospitalizations that would increase the burden on the health-care system.

Read: Private insurers want in on national bulk-buying deal for drugs

But that argument doesn’t hold water, says Marc-André Gagnon, an associate professor at Carleton University’s school of public policy and administration in Ottawa.

“What we know is that lack of good coverage or . . . copayments . . . creates cost-related non-adherence: people not adhering to treatments because of financial reasons,” he says. “This is where it leads to massive amounts of hospitalization. . . . I think a good pharmacare system covering everyone is the best way to reduce hospitalization.”

Read: 4 ways to improve Canadian healthcare

Gagnon also takes issue with other elements in the study, including the fact that Canadian Health Policy Institute research papers aren’t subject to peer review, and with its basic premise that access to more medications leads better population health.

“You can make it very clear to everyone in your population that . . . every dollar we spend is a dollar we’re not spending somewhere else,” he says, suggesting countries may want to decline to cover a brand-name drug if it doesn’t provide additional value in comparison to a generic equivalent.

Read: Universal drug plan could cut spending by $7.3 billion

Gagnon also points out that while some drugs may not be on New Zealand’s formulary, it doesn’t mean patients who need them are out of luck.

“If your doctor considers for medical reasons, you need to have a different drug in this category than the one that is covered, yes, the country will cover this drug . . .,” he says, adding those who still want a more expensive drug would have to pay the difference in price if there was no medical justification.

Copyright © 2021 Transcontinental Media G.P. Originally published on

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required