Prescription Market in Canada is confusing and complicated. The Un-insured pay the price.

Jason P. is 50 years old and worked for the same employer for over 25 years. During his employment he developed some health conditions that commonly occur with aging. Jason has hypertension, high cholesterol and deals with a mental health disorder. To control these chronic conditions, he takes 4 medications every day, two for hypertension (Ramipril and Hydrochlorothiazide), one for treating his cholesterol (Rosuvastatin), and one for his mental health (Escitalopram). Jason’s factory shut down just before the COVID-19 pandemic began, and he has struggled to find other work since. His benefit plan had covered most of his prescription costs while he worked. When he lost his job, he lost his health benefits. Jason had no idea how much his prescriptions actually cost until he lost his insurance.

Marlene J. is 43 years old, works in the service industry, and had been with the same employer for 12 years. Marlene was working full time with lots of overtime which qualified her for employment benefits from her employer. She felt very fortunate to have benefits when most of her colleagues in the service industry work for employers who do not provide any benefits, and was thankful because she has been controlling her diabetes for 20 years. Marlene is on 8 different medications for her diabetes and a depressive disorder that had surfaced over the past few years. Marlene lost her job during the first Pandemic wave, but was able to find new employment within the service sector and this employer also provides health benefits. However, the new insurance provider excluded her medications from coverage because the medical conditions were determined to be ‘pre-existing’. The full cost of her 8 prescriptions plus diabetic supplies have been her fiscal responsibility for over 2 years, and is now affecting her family budget. She had no real understanding of how much her medications cost until she lost her benefit support. Buying individual health benefits is not a solution for Marlene because of similar pre-existing condition exclusions, or out-of-reach monthly premiums.

Millions of Canadians cannot afford their prescriptions including many who admit they will skip refills or ration medications because of affordability. (1,2) These are primarily the un-insured. This un-insured cohort has been increasing over the past decade for a number of reasons, including growth in part- time, contractual, and gig work. Benefit insurance cost increases have forced some employers to reduce or drop benefits completely. The COVID-19 Pandemic also increased this cohort with additional layoffs and reduced work in many sectors. Jason and Marlene are common examples of this population.

Prescription drug affordability is a pervasive problem, especially for those who live with multiple chronic conditions and who do not have access to prescription coverage. Complex and confusing pricing underpins our prescription system, placing significant burdens on these consumers, and on retailers. Consumers take a prescription to their pharmacy and pay the full cost of the prescription. There is no supplemental support and no insurance co-pay as a reduction in the cost. They pay full price.  The market calls it a cash sale from a cash-payor.

A typical Canadian patient may have a diagnosis of hypertension, high-cholesterol, and perhaps also suffers from a mental health condition.  High blood pressure, high cholesterol and mental health disorders are amongst three very common diagnosed conditions in Canada. (3)

A diabetic patient could take up to 8 different medications just to control that condition, and unfortunately, diagnosis of diabetes is growing quickly. (4)

Another issue is prescription pricing. Insurance companies and provincial governments make price-capping deals with both retail pharmacy and with pharmaceutical manufacturers, essentially placing a pricing ‘maximum’ on virtually every prescription. They will not reimburse higher than the cap, thus all insurance or pharmacare reimbursed prescriptions are capped at that level.  There is no such agreement for non-insured.  Retail pharmacy is free to charge any price they feel appropriate for these same prescriptions.  A medication with an insurance price capped at $27.00 could be sold to an un-insured customer for $35.00.  Although many retail pharmacies in Canada tend to match the insurance price for the un-insured, some do not…and charge more. This means there are potentially two prices for the same prescription.

The cost of a prescription is made up of a number of factors – the medication cost, the dispensing fee, and store markup. Insurance and governments cap the dispensing fee in each province to a maximum allowed. Each province is slightly different (no real reason why that is not nationally aligned), along with slightly different markup caps. The medication cost is similar nation-wide, as they mostly all originate from global pharmaceutical manufacturers.

There are also pricing differences between retail pharmacy providers. Some pharmacies are positioned as ‘low-cost’ such as the big box or large department stores, who tend to keep their dispensing fees and markups lower than the market. A prescription could have different pricing depending upon the retail pharmacy provider.

Canada has different prescription pricing depending upon the provincial fee/markup caps.

Canada has different prescription pricing within each province depending upon the retail pharmacy provider and their pricing model.

Canada has different prescription pricing depending upon the patient’s payment method. Insurance and pharmacare have capped pricing. Un-insured have no caps.

Formulary coverage affects affordable access for medications. A ‘formulary’ is a list of medications. Provincial government pharmacare programs all have formularies of medications and dosage that are ‘covered’ or approved for coverage.

Insurance companies and drug plans all have formularies of ‘covered’ or approved medications.

Many medications are covered, but a number are not. And because of increasing costs and usage of some medications (like expensive biologic and cancer medications) and the type of medications (like lifestyle medications) the list of ‘non-formulary’ or non-covered medications seems to be growing.

Each provincial pharmacare program, insurance plan, and insurance provider has different formulary coverage lists. These are based upon many criteria….cost being a significant factor for formulary coverage.

The un-insured do not have to be concerned about formulary coverage.  Cost is the major factor for them, as all their prescriptions have no supplemental support. If it is too expensive…then a serious decision must be made by the patient.

Clearly, an insured or pharmacare patient has the advantage. So let’s return to the millions of Canadians without any coverage. What do they end up doing?

  • Decide about taking the medication(s) depending upon household monthly budget.
  • Decide about where to fill prescriptions (which pharmacy) based on pricing. (5)

The discussion about creating a comprehensive (extensive formulary) single payor, national pharmacare program to look after all these people is attractive, but extremely cumbersome to create and deliver, especially when looking to align all the current programs and formularies and pricing models in each province. There are millions of people in Canada who already have coverage of some sort…and it would be disruptive to them.  Additionally, provinces are constitutionally responsible for providing health care, like prescription drugs. Securing alignment from all 10 provinces and 3 territories to administer a program that everyone agrees on will also be a challenge.

How do we support these uninsured people today? Many are not taking their prescribed medication at all. (1) This leads to untold negative health outcomes. The Canadian Federation of Nurses Unions states that non-adherence to cardiac medications actually kills people in Canada every year. (2) Non-adherence to medication also affects home life and work places, as sufferers of chronic health conditions do not stay controlled, may feel unwell, and are absent from work.(5)

Solutions need to be created immediately. The pricing of prescriptions in Canada needs a reset. There are new solutions that gather and coordinate the large cohort of un-insured.  By grouping together these individuals, leveraging their collective numbers and buying power, market dynamics could be changed. These new approaches are quickly growing, and Canadian based.

A National Plan could be an answer, but until there is a working program, the growing number of un-insured Canadians and families will continue to struggle to afford their necessary prescriptions. This is a growing health and social issue.




1.The consequences of patient charges for prescription drugs in Canada: a cross-sectional survey Michael R. Law, Lucy Cheng, Ashra Kolhatkar, Laurie J.Goldsmith, Steven G. Morgan, Anne M. Holbrook and Irfan A. Dhalla .February 13, 2018 6 (1) E63-E70; DOI:

  1. Body Count. The Human Cost of Financial Barriers to Prescription Medications. Ruth Lopert, Elizabeth Docteur, Steve Morgan. May 2018. Canadian Federation of Nurses Union.
  2. Top 10 Reasons For Physician Visits in Canada 2018 IQVIA.
  3. The Burden of Out-of-Pocket Costs for Canadians With Diabetes. Canadian Diabetes Association.
  4. As Canadians Age, Struggles Over Access to Health Care Extend to Prescription Drugs. Angus Reid Institute, 2019.