Canada's wildly varying provincial drug plans are not only inefficient and oftentimes unfair, they are overly expensive, contends a new report, which offers a national pharmacare program as an alternative.

The report, prepared for the Canadian Centre for Policy Alternatives, was written by Carleton University professor and Harvard research fellow Marc-Andre Gagnon and released Monday.

It argues that with the power of bulk purchasing, a national plan could cut drug costs by more than 40 per cent -- or by $10.7 billion a year -- by adopting a policy based on market competition.

"I must say that we were a bit surprised by the results," Gagnon said at a news conference on Monday.

Currently, public drug plans in Canada cover seniors over the age of 65 and recipients of social assistance.

The rest of the country tends to depend on private plans offered through their employers or by buying into private plans. But there are as many as eight million Canadians who do not have adequate coverage for prescription drugs, according to the paper.

"People are covered according to where they live, or where they work, but not according to their medical needs," Gagnon said.

The report contends that Canada pays far too much for medication -- between 16 and 40 per cent more than other industrialized countries. In fact, Canada is the world's third most expensive country for brand name drugs, the report found.

It contends that Canadians pay too much for medications because the country deliberately inflates drug prices in order to attract more pharmaceutical investment.

"We're being played for suckers right now," said NDP health critic Megan Leslie.

"You can't negotiate as a purchaser. But as a country, united, we can negotiate prices" for pharmaceuticals, Leslie told CTV News Channel. "We need to do a variety of innovative things, like what this report is showing, and it can really reduce our costs and improve the health of Canadians."

Politicians and stakeholders have discussed the idea of a national pharmacare program for decades, but no federal government -- including this one -- has attempted to start one.

This report argues that the provinces could take it upon themselves to co-ordinate a national program, not a federal one. That would allow them to buy drugs and other medical supplies in bulk, and to agree to a common set of standards.

Even if a national program wasn't able to negotiate cheaper medication prices, the report predicts it could still offer administration savings ranging from $2.6 billion to $4.5 billion.

New Zealand, Australia, the U.K., France and Sweden all have national pharmacare programs that lower drug prices, according to the report.

Pharmaceuticals companies say that such programs only look good on paper.

"It's been proven around the world -- you're going to cause other health care costs elsewhere in the system," said Russell Williams, the president of Canada's Research-Based Pharmaceutical Companies, an industry group that represents producers such as Bayer and GlaxoSmithKline.

But in British Columbia, where an aggressive plan for buying pharmaceuticals is already in place, the provincial health minister says the government expects to save $250 million a year by 2014.

With a report CTV's Daniele Hamadjian