Income-Based Drug Coverage in British Columbia: The Impact on the Distribution of Financial Burden

Abstract

[2001][2002][2003][2004]. These data were then graphed to assess (using concentration curves) changes in the progressivity of private and public pharmaceutical financing. Results: Overall, the move to Fair PharmaCare resulted in larger but slightly less regressive private payments and smaller but slightly more progressive public subsidies. Because total drug spending increased while the total subsidy available decreased, average private household spending as a proportion of household income increased across virtually all age and income levels. Discussion: The PharmaCare Program redistributed public subsidies in a manner that was more progressive than previous programs; this reduced the regressivity of private pharmaceutical payments. However, total public subsidy decreased, and private spending increased by a commensurate amount. This makes the program' s overall financial impact on BC households somewhat ambiguous. Income-based pharmacare could improve financial equity unambiguously if public shares of drug spending are expanded.

Income-Based Drug Coverage in British Columbia: Lessons for BC and the Rest of Canada

“…This level of public subsidy would facilitate cost control and maintenance of access to medicines. Moreover, our simulated results suggest that it would unambiguously increase the progressivity of both public and private payments for prescription drugs (Hanley et al 2006).…”

“…Public spending was reduced through the reorganization of the terms of coverage offered by BC PharmaCare. The share of total prescription drug expenditure covered from the provincial government budget fell from a range of 51% to 53% over the period of 1996 to 2001, to 47% in 2002 and 43% in 2003 and 2004; logically, the privately financed portion of expenditure increased commensurately (Hanley et al 2006;Morgan and Yan 2006).…”

“…Our empirical analysis of the financial equity of Fair PharmaCare generated conflicting findings (Hanley et al 2006). Given continued increases in per capita prescription drug costs, the near-freeze in BC PharmaCare spending during 2002 and 2003 resulted in increased private payments for prescription medicines (as a proportion of household income) for British Columbians of all ages and incomes.…”

“…Through a series of papers, we have sought to describe the major impacts of the changes to BC PharmaCare using population-based analyses of a comprehensive drug claims dataset (see Caetano et al 2006;Hanley et al 2006;Morgan and Yan 2006). The choice of the empirical studies conducted was guided by input received from policy makers (Morgan and Coombes,page 92).…”

The redistributive effect of the move from age-based to income-based prescription drug coverage in British Columbia, Canada

“…The 2003 changes in the rules governing drug cost subsidies in B.C., in conjunction with the rich prescription drug use/cost databases available, provide an opportunity to assess the impact of such a policy change on equity within and across age groups before and after the policy change, thus shedding light on the potential consequences of policies that target subsidies by income. While vertical equity in the financing system before and after the introduction of Fair Pharmacare has been studied [10,11], the overall redistributive effect, the effect of both vertical and horizontal equity, has received no attention. This is an important omission.…”