Patent expiries and generic pricing policies may be factors in slower
OTTAWA, May 5 /CNW/ - Although drugs remain an important cost driver in
Canada's health system, growth in spending has slowed to its lowest
rate in 14 years, according to a new report released today by the Canadian Institute for Health Information (CIHI). Total drug expenditure is estimated to have reached $31.1
billion in 2010, an increase of $1.4 billion, or 4.8% since 2009. In
comparison, the average annual growth rate in drug spending was nearly
twice as high between 2000 and 2005, at 8.9%.
"Spending on drugs used to be the fastest growing category of health
spending in Canada, but has slowed down considerably over the past five
years," says Michael Hunt, CIHI's Director of Pharmaceuticals and
Health Workforce Information Services. "Consumers have been hearing
lately that a number of blockbuster brand name drugs—including some
used to treat high cholesterol and hypertension—have just come off
patent, allowing for lower-priced, generic alternatives to enter the
marketplace. The implementation of generic pricing policies by some
provincial drug programs may also be contributing to the slowdown in
Drug Expenditure in Canada, 1985 to 2010 is Canada's most comprehensive report on spending trends in prescribed
and non-prescribed drugs, including breakdowns by province and
territory, source of funds (public versus private), as well as
CIHI's report shows that spending on drugs (prescribed and
non-prescribed) is forecast to reach $912 per Canadian in 2010.
Prescribed drugs continue to account for the vast majority of total
drug spending, representing an estimated $26.1 billion, or almost 84%
of the total.
Growth in spending on prescribed drugs varies widely across the
CIHI's report shows total per capita spending (public and private) on
prescribed drugs ranged from lows of $574 in British Columbia and $619
in Alberta, to highs of $838 in Nova Scotia and $883 in Quebec.
Variations in spending are influenced by a number of factors, including
differences in provincial, territorial and federal drug subsidy
programs, variations in the health of the population and differences in
health care delivery across jurisdictions.
Annual growth in spending was found to be increasing more quickly in
some parts of the country than in others. The estimated annual growth
in per capita spending on prescribed drugs was lowest in British
Columbia and Ontario, at 1.8% and 2.3%, respectively. Higher annual
growth rates were seen in Quebec (5.4%) and Newfoundland and Labrador
"While the governments of Ontario and British Columbia have taken
measures to control spending on medicines—most notably by lowering the
prices paid for generic drugs—more research is needed to understand why
growth in overall spending has been so much slower there than in other
provinces," explains Steve Morgan, Associate Director, Centre for
Health Services and Policy Research at the University of British
Columbia. "Linkage of health and pharmaceutical datasets across Canada
would go a long way toward answering such important questions."
The public sector's share of total prescribed drug spending varies
depending on where you live in Canada. Public drug spending ranged from
highs of 56% in Saskatchewan and 52% in Quebec to lows of 37% in
Newfoundland and Labrador and 33% in New Brunswick. Nationally, 47% of
spending on prescribed drugs is publicly financed.
Drug prices in Canada among the highest
The latest information available shows that in 2008, Canada's level of
total drug spending per person was second only to the United States,
compared with 25 other countries in the Organisation for Economic
Co-operation and Development (OECD) with similar accounting systems.
Among the top three spending countries, per capita drug expenditure
totalled $1,104 in the United States, followed by Canada at $863 and
France at $747.
In 2007, the last year for which international data is available, Canada
had, on average, the highest prices of generic drugs among OECD
countries where data was available. Only the U.S. had higher average
prices for patented drugs, while Germany's patented prices were similar
to Canada's. Some changes in Canadian generic prices are anticipated,
given the recent policy changes.
About Drug Expenditure in Canada, 1985 to 2010
Drug Expenditure in Canada, 1985 to 2010 updates trends in drug spending in Canada between 1985 and 2010,
primarily from retail establishments, in total, by public and private
payers and by type of drug (prescribed and non-prescribed). Provincial
and territorial comparisons are included. International trends are
updated based on data from the OECD.
The following tables and figures are available on our website at www.cihi.ca:
Total Drug Expenditure as a Percentage of Total Health Expenditure,
Canada, 1985 to 2010 (Figure 1 in the report)
Annual Growth Rate for Total Drug Expenditure and Total Health
Expenditure, Canada, 1985 to 2010 (Figure 2 in the report)
Annual Growth Rate for Prescribed Drug Expenditure, by Source of
Finance, Canada, 1985 to 2010 (Figure 9 in the report)
Total Drug Expenditure per Capita, by Type and by Source of Finance, by
Province/Territory and Canada, 2010 (Figure 13 in the report)
Drug Expenditure Summary, by Province/Territory and Canada, 2010 (Table
2 in the report)
Public Expenditure on Pharmaceutical Goods per Capita and as a
Percentage of Total Expenditure on Pharmaceutical Goods, Reporting OECD
Comparator Countries, 2008 (Table 4 in the report)
Average Foreign-to-Canadian Price Ratios, Generic and Patented Products,
SOURCE CANADIAN INSTITUTE FOR HEALTH INFORMATION
For further information: