Prescription drugs and medications

Are prescription drugs and medications CRA eligible in Canada?

Yes. Prescription drugs and medications are eligible medical expenses under the CRA's Medical Expense Tax Credit (METC) when two distinct conditions are met under ITA subparagraphs 118.2(2)(n)(i) and (ii):

1. The drug must be prescribed by a medical practitioner, and
2. The drug must be recorded by a pharmacist.

In addition, the drug must be one that "can lawfully be obtained for use by the person only if prescribed by a medical practitioner or dentist." This means the medication itself must legally require a prescription to obtain — a doctor writing a prescription for a drug that is otherwise available over the counter does not make it eligible.

Because an HSA reimburses METC-eligible expenses, prescription medications that meet both requirements are reimbursable through a Health Spending Account.

What Qualifies

• Any drug or medication that can lawfully be obtained only with a prescription, prescribed by a medical practitioner and recorded by a pharmacist
• Brand-name and generic prescription medications
• Compounded medications prepared by a pharmacist on a physician's prescription
• Dispensing fees charged by the pharmacist when filling a valid prescription

What Does Not Qualify

• Over-the-counter medications, even if prescribed by a medical practitioner — the CRA explicitly states that OTC medications are not eligible "even if prescribed by a medical practitioner," because they can lawfully be obtained without a prescription
• Medications purchased without a valid prescription from a medical practitioner
• Drugs that were not recorded by a pharmacist

Frequently Asked Questions

Are prescription drugs CRA eligible?

Yes. Prescription drugs qualify under ITA subparagraphs 118.2(2)(n)(i) and (ii) when prescribed by a medical practitioner and recorded by a pharmacist, and the drug itself legally requires a prescription to obtain.

Can I claim prescription medications through my HSA?

Yes. The cost of prescription medications, including dispensing fees, is reimbursable through a Health Spending Account, provided both the prescription and pharmacist recording requirements are met.

Source

Based on the CRA's official eligible medical expenses list and Income Tax Folio S1-F1-C1, "Drugs, medicaments and other preparations or substances".