ontario has the largest number of people without help to pay for prescription drugs

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it's a common belief in other parts of the world that everything health care related in canada is covered, but there's also a lot we pay for out of our own pockets.

by helen stevenson

published nov 24, 2022

last updated feb 21, 2025

6 minute read

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6 minute read

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public and private health plans help ease the burden of drug costs

many canadians are covered by private plans, including employees of federal and provincial governments, hospitals, and universities. getty

although it’s a common belief in other parts of the world that everything health-care related is paid for in canada by the government, there are many things that canadians pay out-of-pocket for when it comes to managing their health. this combination of public (roughly 70 per cent paid for by taxpayers) and private health care (roughly 30 per cent paid through private insurance or out-of-pocket) makes for a complex system that is not always easy to navigate.

what constitutes a private plan?

many canadians are covered by private plans, including employees of federal and provincial governments, hospitals, and universities — for example, public sector employees may be covered by the employer, association or union through a private plan. employee benefit plans offered by employers, unions, or associations are sponsored by the employer who may share costs with employees through a plan premium, deductible and co-pay (the portion of the cost that is the employee’s responsibility).

public plans are funded by provincial and federal governments and paid for through our taxes. each public plan has different criteria that determines a person’s eligibility which depends on the province or plan. examples of public plans include the ontario drug benefit (odb) program, bc pharmacare, the régie de l’assurance maladie du québec (ramq), among others.

what determines the number of drugs covered on the formulary (drug list)?

the number of drugs covered depends on the type of plan. public plans cover an average of 5,000 drugs. for example, the ontario drug benefit (odb) covers the cost of about 5,000 drugs, while quebec (ramq) covers the most, at around 8,000.

private plans tend to fund more drugs than public plans — between 10,000 and 14,000, and most rely on insurance companies to provide the list of drugs covered (the formulary).

how are drug plans able to provide coverage for drugs?

with about 14,000 drugs on the canadian market, some of which cost $3 million per person per year, it is important to consider different strategies to manage the formulary in order to be able to continue to provide drug coverage. this includes deciding which drugs to add to a plan and whether they will be in addition to therapies that are already covered, or replace existing ones.

another strategy to keep plans sustainable is called “step therapy.” for more high-cost or specialized drugs, plans may require claimants to have tried other therapies first, often referred to as first-, second- or third-line therapies. for example, before paying for medications like ozempic (semaglutide) which treats type 2 diabetes, plans may require patients to try metformin — which is considered a first-line therapy — and one other therapy such as sulfonylureas.

sometimes step therapy is required as part of a special authorization (sa) or exceptional access program (eap), which requires a patient to meet certain criteria in order to be eligible for coverage of a drug — often this criteria includes serious or life-threatening conditions where conventional treatments have failed or are not a good fit with the patient’s needs.

in ontario, the odb formulary uses a special code, known as a limited use (lu) code, which indicates that a patient meets specific criteria for coverage. for example, for the blood thinner eliquis (apixaban), patients are covered if after two months of using warfarin — commonly used to prevent blood clots — it’s shown not to be effective, or contraindicated (would cause harm to the patient) or its use isn’t possible. however, patients are not covered if they have impaired kidney function, are over age 75 without stable kidney function, among other criteria.

what does it mean to have a co-pay?

a co-pay is also known as a co-payment or co-insurance. it is a fixed cost that is shared with the sponsor of the benefit plan. while this can be a percentage, for example, 80/20 — the patient pays 20 per cent of the medication cost and the plan pays 80 per cent. or it can be a fixed dollar value: odb seniors have a fixed co-pay of $4.11 per prescription.

are there limits to how much a plan will cover?

a plan may enforce a dollar limit on prescription drug claims; however, this is more common with private plans. there can be a lifetime maximum — for instance, fertility drugs may have a maximum of $5,000 per lifetime. the maximum could also be yearly, say, a maximum of $5,000 worth of claims are covered each year. limits can also be based on the number of claims or the duration of treatment: for example, odb will limit coverage to 12 weeks or 168 tablets per 365 days that a patient uses smoking cessation agent varenicline, also known as champix.

who is covered by private plans in canada compared to public plans?

private coverage can be offered a few ways, including a group benefits plan that is part of employment, membership with associations, and affiliation with post-secondary programs. individual coverage is paid by those who want drug coverage, but do not have access to a group benefit plan.

about two-thirds of canadians are covered by private plans — the remaining third get coverage through public plans (with eligibility depending on the province). in british columbia and quebec, residents have “universal coverage” which allows everyone some extent of coverage for medications.

as for who is covered by a public plan, it depends, since each province has its own criteria for coverage. for example, in british columbia, anyone with public health insurance and who gives pharmacare permission to check their income with the canada revenue agency (cra), can access drug coverage through bc pharmacare. in quebec, however, ramq stipulates that anyone without private coverage through employment must apply for coverage through the public plan. and in ontario, everyone below the age of 25, age 65 and up, are automatically covered under odb; other groups, such as those who have high prescription drug costs in relation to their net household income, must apply and be approved for coverage. still, ontario remains the province in which there is the largest number of people without access to prescription drug coverage.

the non-insured health benefits (nihb) program also provides eligible first nations and inuit people with coverage for health benefits not taken care of by private insurance plans, or provincial or territorial health insurance, while the interim federal health program (ifhp) provides basic, supplemental and prescription drug coverage to refugees, victims of human trafficking, immigration detainees.

clearly, there are significant differences in drug coverage between public and private plans, most obviously in the number of drugs covered, the restrictions on access and the amount a plan member is responsible for in terms of co-pays or plan limits. the complex nature of drug coverage makes it critical for drug benefit plans to be managed proactively, and this benefits members in two key ways. the first is by ensuring that new therapies and treatments are reviewed by experts with a timely decision on whether to add the drug to the plan or not. this helps to ensure timely access to new, effective therapies. and second, the proactive management of drug benefit plans allows decisions to be made on whether older, more expensive therapies should be replaced by newer treatments that are safe and more cost-effective, which contributes to drug plan sustainability.

helen stevenson is ceo of reformulary group, a toronto-based health technology company that helps canadians navigate drug coverage.

do you have a question about drug coverage? have you had a situation in which you were unable to get the treatment you needed because you couldn’t afford it? send your question to info@healthing.ca and we will answer it in an upcoming story.

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ontario has the largest number of people without help to pay for prescription drugs

it's a common belief in other parts of the world that everything health care related in canada is covered, but there's also a lot we pay for out of our own pockets.

what constitutes a private plan?

machado: how is it that we live in a world where people are denied the medications they need to survive?

drug access 101: what does a formulary have to do with getting your medication paid for?

what determines the number of drugs covered on the formulary (drug list)?

how are drug plans able to provide coverage for drugs?

what does it mean to have a co-pay?

are there limits to how much a plan will cover?

who is covered by private plans in canada compared to public plans?

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ontario has the largest number of people without help to pay for prescription drugs

it's a common belief in other parts of the world that everything health care related in canada is covered, but there's also a lot we pay for out of our own pockets.

what constitutes a private plan?

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what determines the number of drugs covered on the formulary (drug list)?

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are there limits to how much a plan will cover?

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