How to Prepare for Soaring Drug Costs as Babyboomers Become Seniors - C.D. Howe Institute

TORONTO, April 14 /CNW/ - The cost of provincial pharmacare is set to rise precipitously, with spending on Ontario's drug benefit plan for seniors projected to increase from about 1 percent of provincial income to a full 5 percent by 2061, according to a new C.D. Howe Institute report. To prepare for this rising spending on drugs as babyboomers age and workforce growth slows, authors Colin Busby and William Robson recommend partial prefunding of the Ontario Drug Benefit program as the best way to put the program on a stronger and more sustainable footing.

In A Social Insurance Model for Pharmacare: Ontario's Options for a More Sustainable, Cost-Effective Drug Program, Busby and Robson note that the ODB is Canada's largest drug plan, with annual spending of about $4.5 billion in 2010. With demographic pressure boosting these costs in the decades ahead, a business-as-usual approach to funding the plan, say the authors, presents a bleak prospect and amounts to wilfully passing on an exorbitant bill to future generations. An early increase in contributions to partially prefund future spending could contain the program's impact on taxes later.

For the study click http://www.cdhowe.org/pdf/Commentary_326.pdf

SOURCE C.D. Howe Institute

For further information:

William B.P. Robson, President and CEO; or
Colin Busby, Senior Policy Analyst,
C.D. Howe Institute.  416-865-1904,
email: cdhowe@cdhowe.org


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