The federal government’s latest budget sets aside $1.5 billion to implement pharmacare — a major financial commitment with the potential for a wide-ranging impact on the country’s health-care system.

The program, long demanded by the government’s supply-and-confidence partners in the NDP, will start small by covering just two categories of drugs.

For the program to get off the ground, the provinces and territories also will have to be on board.

Ottawa has made a commitment to expand pharmacare — it’s standing up a panel of experts to provide advice on how best to implement a universal, single-payer program sometime in the future.

CBC News has received a number of questions about the program. Here are some answers.

What is pharmacare?

The Pharmacare Act proposes a publicly-funded, nationwide health-care insurance program to subsidize the cost of prescription drugs in Canada.

The stated purpose of the act is to improve the accessibility and affordability of prescription drugs for all Canadians, with a goal of eventually introducing a national, universal pharmacare program.

Canada is the only country in the developed world with a universal health-care program that does not include universal coverage for prescription drugs. Instead, we have a mix of private, public and out-of-pocket insurance plans.

According to the Parliamentary Budget Office (PBO), total prescription drug spending in Canada in 2021-22 amounted to roughly $36.6 billion. Of that total, 46 per cent was covered by public sources, 40 per cent was covered by private insurance, and 14 per cent was paid for out-of-pocket.

Legislation has been laying the groundwork a pharmacare-type program for decades.

The Medical Care Act, passed into law in 1966 but not fully implemented until 1972, established a cost-sharing arrangement between the federal government and the provinces to ensure universal public health insurance for hospitals and physician services.

The Canada Health Act, passed in 1984, enshrined in law the core principles of the public health-care system — that it be publicly administered, comprehensive, universal, portable and accessible to all.

The missing piece — universal prescription drug coverage — is what pharmacare is meant to provide.

What’s in Bill C-64, the Pharmacare Act?

In its current form, the proposed legislation would provide universal access to a wide variety of contraceptives and diabetes medication. 

If C-64 passes Parliament, Health Minister Mark Holland will begin negotiating with the provinces and territories on a funding commitment that would cover the cost of providing these medications to people for free.

According to Health Canada, nearly 10 per cent of the population lives with diagnosed diabetes. A quarter of those diabetics say their treatment plans are affected by the cost of drugs.

Bill C-64 would subsidize access to diabetes medications that lower blood glucose levels, such as insulin and metformin.

The full list of diabetes medications the government is suggesting will be covered can be found here. They include Glulisine, Detemir, Saxagliptin and metformin, among others.

The bill also would cover access to contraceptives for roughly nine million Canadians of reproductive age. The federal government says the coverage will reduce unplanned pregnancies and lower costs for health-care systems nationwide.

The full list of contraceptives to be covered can be found here. They include a variety of oral birth control pills, copper and hormonal IUDs and emergency contraceptives.

That’s it for now. The federal government says it’s planning to introduce universal pharmacare incrementally. This first phase will be evaluated before the government looks to expand to a nationwide single-payer model.

When will Canadians get access to pharmacare?

The short answer is … it depends.

Holland has said he hopes to have the first phase implemented with the provinces by the end of the year. That timeline depends on the federal government reaching agreements with the provinces.

That means residents of some provinces might have access to pharmacare sooner than others.

If the bill passes, the Canadian Drug Agency will then develop a national purchasing plan and a national formulary of prescription drugs.

It’s not clear how this process might affect the federal government’s timeline.

What are the provinces saying?

So far, both Alberta and Quebec have said they plan to opt out of pharmacare if it’s enacted. Both provinces say they want to invest their share of the program’s funding in their own health systems.

The Ontario government has yet to commit and has said it wants to see more details before backing the legislation. The government of B.C. has reacted favourably to the legislation.

The other provinces and territories have signalled they are open to taking part in the program but want to see more details before committing.

The pharmacare pitch comes after the federal government last year offered the provinces and territories $196 billion over 10 years for their health systems.

How much is this going to cost?

Federal officials have yet to confirm the exact cost of the first phase of the pharmacare program.

Without finalized agreements with the provinces, it’s hard to say exactly how much the program will cost. Estimates released in the federal budget indicate that the first phase will cost $1.5 billion over five years.

The cost of a fully implemented, universal, nationwide, single-payer prescription drug program is estimated at $33.2 billion in fiscal 2024-25, climbing to $38.9 billion in fiscal 2027-28, according to the PBO.

The projected cost to the federal government would range from $11.2 billion in 2024-25 to $13.4 billion in 2027-28.

Despite expected growth in prescription drug use, the PBO predicts that lower drug prices would help contribute to economy-wide savings of about $1.4 billion in 2024-25, incrementally rising to $2.2 billion in 2027-28.

What are pro-pharmacare advocates saying?

According to Statistics Canada data, one in five Canadians “remain uninsured and pay out-of-pocket for prescription medications.”

Pharmacare advocates also note that Canadians pay some of the highest individual prescription drug prices among OECD countries.

Nikolas Barry-Shaw of the Council of Canadians, an independent progressive advocacy group, said the cost of the “status quo” is more than the cost of a national universal prescription drug program.

Barry-Shaw said that such a program would help reduce the strain on hospitals — because if more people have access to prescription drugs, fewer of them are likely to be hospitalized.

What are others saying?

Critics of pharmacare claim the program would reduce the variety of drugs available to Canadians and say the funding could be put to better use elsewhere in the health-care system.

Dr. Bettina Hamelin, president of Innovative Medicines Canada — which represents pharmaceutical companies — said that “moving provinces and territories towards a single-payer pharmacare system would ultimately reduce the quality of drug coverage for most Canadians.”

Opponents of the legislation point to the wide range of coverage already available to the vast majority of Canadians. Roughly 88 per cent of Canadians already have comprehensive prescription drug coverage.

The Canadian Association of Pharmacists, which represents over 45,000 pharmacists across Canada, is calling for a mixed-payer model that builds on public and private insurance programs.

What does the future look like?

Assuming the bill passes through Parliament, much depends on whether the federal government can get enough support from the provinces. And there’s a federal election coming next year.

Conservative Leader Pierre Poilievre has not said whether he would scrap pharmacare. He has criticized the idea by suggesting that it would “ban” private insurance plans. (The proposed legislation would not ban private plans.)

Poilievre also has hammered the Liberals over their deficit spending, casting doubt on the future of new Liberal social programs under a government led by him.

“It is imperative for this to get rolled out as quickly as possible,” said Barry-Shaw.