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The financial burden of out of pocket prescription drug expenses in Canada

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  • Sam Caldbick
  • Xiaojing Wu
  • Tom Lynch
  • Naser Al-Khatib
  • Mustafa Andkhoie
  • Marwa Farag

Abstract

Pharmaceutical expenditures account for approximately 15.9 % of total health expenditures in Canada. Unlike hospital and physician services, in which costs are universally covered, most pharmacological therapy does not fall under the umbrella of ‘medically necessary’ services set out by the Canada Health Act, and therefore is funded through a mix of public and private plans. Little is known about the actual financial burden experienced by Canadians from out-of-pocket drug expenditures (OOPDE). This paper examines the burden of OOPDE in Canada. 1.1 % of Canadian households exceed our catastrophic threshold (9 %) of the drug budget share. Additionally, 2.6 and 8.2 % of households exceed lower thresholds of 6 and 3 % respectively. We find an inverse relationship between household income and the burden of OPPDE. Low-income households have the highest likelihood of being in the ‘catastrophic’ drug expenditure category. This finding suggests that a vulnerable population of ‘working poor’ are likely to be experiencing disproportionate financial burden because they are not eligible for public assistance programs. Seniors experience the highest burden of OPPDE when compared to other age groups. We also find that there is significant interprovincial variation in the burden of OOPDE, which partly reflects different provincial government drug coverage policies. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Sam Caldbick & Xiaojing Wu & Tom Lynch & Naser Al-Khatib & Mustafa Andkhoie & Marwa Farag, 2015. "The financial burden of out of pocket prescription drug expenses in Canada," International Journal of Health Economics and Management, Springer, vol. 15(3), pages 329-338, September.
    • Handle: RePEc:kap:ijhcfe:v:15:y:2015:i:3:p:329-338
    DOI: 10.1007/s10754-015-9171-3
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    References listed on IDEAS

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    1. Kapur, Vishnu & Basu, Kisalaya, 2005. "Drug coverage in Canada: who is at risk?," Health Policy, Elsevier, vol. 71(2), pages 181-193, February.
    2. Alan, Sule & Crossley, Thomas F. & Grootendorst, Paul & Veall, Michael R., 2002. "The effects of drug subsidies on out-of-pocket prescription drug expenditures by seniors: regional evidence from Canada," Journal of Health Economics, Elsevier, vol. 21(5), pages 805-826, September.
    3. Sule Alan & Thomas Crossley & Paul Grootendorst & Michael Veall, 2005. "Distributional effects of `general population' prescription drug programs in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 128-148, February.
    4. Łuczak, Julita & García-Gómez, Pilar, 2012. "Financial burden of drug expenditures in Poland," Health Policy, Elsevier, vol. 105(2), pages 256-264.
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    Cited by:

    1. Veronika Kočiš Krůtilová, 2021. "The out‐of‐pocket medication burden: Which health problems impact the Czech population aged 50+?," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(6), pages 2129-2144, November.
    2. Sterling Edmonds & Mohammad Hajizadeh, 2019. "Assessing progressivity and catastrophic effect of out-of-pocket payments for healthcare in Canada: 2010–2015," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 1001-1011, September.
    3. Hajizadeh, Mohammad & Pandey, Sujita & Pulok, Mohammad Habibullah, 2023. "Decomposition of socioeconomic inequalities in catastrophic out-of-pocket expenditure for healthcare in Canada," Health Policy, Elsevier, vol. 127(C), pages 51-59.
    4. Mat'uv{s} Maciak & Ostap Okhrin & Michal Pev{s}ta, 2019. "Infinitely Stochastic Micro Forecasting," Papers 1908.10636, arXiv.org, revised Sep 2019.

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