Financial Burden of Household Out-of-Pocket Expenditures for Prescription Drugs: Cross-sectional analysis based on national survey data

Logan McLeod, Basil G. Bereza, Minsup Shim, Paul Grootendorst
Research Summary: 

Commentaries on the adequacy of insurance coverage for prescription drugs available to Canadians have emphasized differences in the coverage provided by different provincial governments. Less is known about the actual financial burden of prescription drug spending and how this burden varies by province of residence, affluence and source of primary drug coverage.

We used data from a nationally representative household expenditure survey to analyze the financial burden of prescription drugs. We focused on the drug budget share (defined as the share of the household budget spent on prescription drugs), considering how it varied by province, total household budget and likely primary source of drug insurance coverage (i.e., provincial government plan for senior citizens, social assistance plan or private coverage). We examined both “typical” households (at the median of the distribution of the drug budget share) and households with relatively large shares (in the top 5%). Finally, we estimated the percentage of households with catastrophic drug expenditures (defined as a drug budget share of 10% or more) and the average catastrophic drug expenditures.

Senior, social assistance and general population households accounted for 21.1%, 8.9% and 69.9% of the sample of 14 430 respondents to the 2006 Survey of Household Spending, respectively. The median drug budget share in Canada was 1.1% for senior households (range 0.4% [Ontario] to 3.6% [Saskatchewan]) and 0.1% for both social assistance households and general population households, with little appreciable variation across provinces for these latter 2 categories. The 95th percentile drug budget share in Canada was 7.4% for senior households (range 3.5% [Ontario] to 12.7% [Saskatchewan]), 5.4% for social assistance households (range 2.3% [British Columbia] to 13.0% [Prince Edward Island]) and 2.6% for general population households (range 2.1% [Ontario] to 5.4% [Prince Edward Island]). The interprovincial range of the 95th percentile drug budget share was 10.7 percentage points for social assistance households, 9.2 percentage points for senior households and 3.3 percentage points for general population households.

For most households, the financial burden of prescription drug expenditures appeared to be relatively small, with little interprovincial variation. However, a small number of households incurred catastrophic drug costs. These households were concentrated in the groups that traditionally benefit from provincial government drug plans. It is likely that some households did not purchase needed prescription drugs because of the expense, so our estimates of the financial burden of catastrophic prescription drug expenditures therefore represent a lower bound.