Canada’s public Medicare health programme should cover prescription medicines - its current failure to do so increases costs and reduces quality, says the Organisation for Economic Coooperation and Development (OECD).

Generic drug prices are unusually high in Canada, adds the OECD, which recommends that generics makers which challenge brand-name patents in expensive court cases should be rewarded with higher initial prices.

At the same time, Canada must reduce growth in health care spending from an average of around 8% a year for the past decade to 4%, according to the OECD’s Economic Survey for Canada, released this week.

The Survey praises Medicare for offering Canadians “top-notch care for legislatively-defined essential services, without charge to all residents, but adds that “in the longer run, the soundness of Canada’s public finances will likely be largely determined by the decisions taken regarding the health care system.”

The nation’s spending on public health and long-term care spending will nearly double by 2050, from 7.3% of Gross Domestic Product (GDP) in 2005 to 13.5%, the report forecasts, and it recommends that one way of tackling this challenge would be to bring the costs of pharmaceuticals and home care into the Medicare programme.

“Canada is very unusual in not requiring any form of patient payment whatsoever for core services. Some form of pricing could be introduced in order to better reveal and ration demand,” the Survey says.

Meantime, another new report published this week estimates that a universal public “pharmacare” plan could save Canada as much as C$10.7 billion a year on prescription drugs.

The study, by Carleton University professor and Harvard research fellow Marc-André Gagnon, says that Canadians could save 10%-42% of total current drug expenditures, depending on the choice of industrial policies related to drug costs.

Canada cannot afford not to have universal pharmacare, says Mr Gagnon, who describes the country’s pharmaceutical policies as “a total failure. Many Canadians do not have equitable access to medicines, the lack of coverage makes some treatments inefficient and the whole system is unsustainable because we currently cannot control the growth of drug costs,” he says.

According to the report, which is published by the Canadian Centre for Policy Alternatives (CCPA), Canada is the world’s third or fourth most expensive country for brand-name drugs - after the US, Switzerland and Germany - because it deliberately inflates drug prices in order to attract pharmaceutical investment.

“The cost of such policies far exceed the benefits to Canadians from having a domestic pharmaceutical industry,” says Mr Gagnon.