Who decides to reimburse drug costs?

After a new drug receives a Notice of Compliance (NOC) and Drug Identification Number (DIN) from Health Canada, a pharmaceutical company can ask provincial or territorial drug insurance plans to reimburse the cost of a new drug. Participating drug plans may also submit requests.

Here’s a look at how things work. First, it’s worth mentioning that each province and territory in Canada has its own drug reimbursement plan.

Across Canada

In all Canadian provinces and territories, except Quebec (see below), the Canadian Agency for Drugs and Technologies in Health (CADTH), through the Common Drug Review (CDR) process, decides whether or not to recommend the public reimbursement of new drug costs. (A different process is used for new cancer drugs.) This review process takes 180 days or longer.

Step 1 > A pharmaceutical company or provincial or territorial drug plan submits its request for a Common Drug Review to CADTH.

Step 2 > During the CDR process, the Canadian Drug Expert Committee (CDEC) conducts a rigorous, objective evaluation of the drug’s clinical and economic benefits and drawbacks. It then makes a recommendation to federal, provincial and territorial drug insurance plans (except Quebec) to:

  • Reimburse drug costs
  • Reimburse drug costs under specific conditions
  • Not reimburse drug costs

Step 3 > Participating drug plans in each province and territory then decide whether to include the new drug on their formulary – a master list of reimbursable drugs – based on this recommendation. However, CDR recommendations are not binding, and individual provinces and territories may decide not to list a recommended drug or, on the other hand, to list a not-recommended drug. Each province and territory makes the final decision on whether or not to cover drug costs.

Step 4 > Participating drug plans in each province and territory (except Quebec) then decide on a reimbursement strategy for the new drug. For example, will their drug plan cover all, none or a percentage of drug costs?

What you need to know

The Canadian Drug Expert Committee considers the following information when issuing recommendations and advice:

  • Patient group input
  • Clinical trial evidence for drug safety and efficacy
  • Therapeutic benefits and drawbacks
  • Cost and cost-effectiveness vs. currently accepted therapies

Learn more at https://www.cadth.ca/media/cdr/process/CDR_Procedure.pdf


The Institut national d’excellence en santé et en services sociaux (INESSS) is responsible for evaluating new drugs in Quebec. This agency recommends whether or not to list a new drug in the Quebec drug insurance plan for reimbursement. Drugs must first receive Health Canada approval and have a DIN number. This process takes about one year.

Learn more at https://www.inesss.qc.ca/en/home.html

Step 1 > A pharmaceutical company submits an application to the institute. Members of INESSS, the Comité Scientifique permanent de l’évaluation des medicaments aux fins d’inscription (Standing Scientific Committee for Medication Evaluation), and outside experts review the application.

Step 2 > The committee submits a report to the INESSS Board of Directors, which ratifies the recommendation.

Step 3 > INESSS publishes a Notice to the Minister, which lists its recommendation. This notice is sent to the Quebec Minister of Health and Social Services. It explains the reasons for recommending a drug’s acceptance or rejection for reimbursement, in accordance with Quebec law.

Step 4 > The Minister approves or rejects INESSS’ recommendation.

Step 5 > If a new drug receives the Minister’s approval, the Régie de l’assurance maladie du Québec (RAMQ) updates the List of Medications to be reimbursed by the province’s drug insurance plan.

Exceptions for drug reimbursement

Many provinces and territories, including Quebec, will consider covering the cost of a drug that has received Health Canada approval under certain circumstances. Your doctor can advise you and help to determine whether you qualify for drug reimbursement. He or she can help you to fill out a special form to apply for reimbursement if you qualify.