Expert committee demands federal takeover as bilateral talks collapse
A federal expert committee is recommending a sweeping restructure of Canada's fragmented drug coverage system—one that would bypass private insurers and provincial negotiations entirely, potentially reshaping how employers fund employee benefits.
According to the National Pharmacare Committee of Experts, the federal government should implement a universal, single-payer pharmacare model funded entirely at the federal level and delivered through existing provincial health card systems.
The shift would create a public first-payer system for essential medicines while allowing private insurance to operate as supplementary coverage.
The committee's push for federal-only funding sidesteps the bilateral agreement approach that has stalled for two years.
Navindra Persaud, chair of the advisory committee, said only four jurisdictions—British Columbia, Manitoba, Prince Edward Island and Yukon—have signed deals since the Pharmacare Act came into force in October 2024, leaving the program severely underfunded and fragmented.
According to the Canadian Press, the previous government allocated $1.5bn over five years for pharmacare, but more than 60 percent of that money is already committed to just three provinces and one territory.
The most recent federal budget included zero new funding to expand coverage.
This funding crisis triggered the committee's recommendation for full federal responsibility.
According to the report, only four of 13 Canadian jurisdictions have reached agreements to provide access to just two medicine classes—contraceptives and diabetes treatments—and even those agreements contain inconsistencies in coverage and pricing.
The committee explicitly rejected the "fill-the-gaps" model that pharmaceutical and insurance industry representatives championed in September, as reported by the Canadian Press.
That approach would have limited pharmacare to uninsured populations, preserving private insurers' market share.
Instead, the committee anchored its recommendations in universal coverage—a decision that threatens the $61bn private health insurance market.
The report said that private drug plans account for $15bn (or 32 percent) of the $48bn in annual insurance claims, with medicines making up a substantial portion of employer benefit costs.
The federal government currently subsidizes private plans to the tune of $5bn annually through tax exemptions for employer contributions to extended health benefits, according to the report.
The committee flagged this as inequitable, noting that these subsidies benefit only higher-income workers with access to employer plans.
The committee estimates the public cost of universal pharmacare at $6bn to $10bn, with the actual taxpayer burden closer to $3bn once bulk purchasing savings and redirected provincial funding are factored in, as per Persaud.
The federal government should establish an independent body to maintain the essential medicines list—drawing from World Health Organization guidance to include low-cost generics such as antibiotics, heart disease and diabetes medications, and HIV treatments, according to the report.
Critically, the committee called on provinces and territories to reinvest any savings from pharmacare into primary health care and pharmacy services.
This requirement reflects recognition that free drugs mean little without prescriber and pharmacy access, particularly in rural and remote communities.
Support for universal pharmacare runs deep: according to the report, more than 80 percent of Canadians back the model.
Yet implementation stalls because, as Persaud told the Canadian Press, “each dollar that pharmacare saves is a dollar less in potential profit for private insurance companies and pharmaceutical companies.”
The federal NDP—whose confidence-and-supply agreement with the previous Liberal government birthed the pharmacare legislation—expressed frustration.
According to the Canadian Press, NDP health critic Gord Johns stated the absence of new funding signals the government isn't truly committed to expansion.
Only 17 percent of Canadians currently have coverage under the existing four bilateral deals, CBC News reported.
Meanwhile, provinces remain uncommitted.
According to CBC News, when the network contacted remaining jurisdictions, none reported active negotiations with Ottawa.
Alberta cited “serious concerns” about long-term sustainability, while Quebec and Ontario said they were waiting for federal direction.
