Drug spending estimated at $30 billion in 2008

    Spending on drugs growing at a faster rate than other major
    health-spending categories

    OTTAWA, April 16 /CNW Telbec/ - Total drug spending in Canada is
estimated to have reached $29.8 billion, or $897 per Canadian, in 2008,
according to figures released today by the Canadian Institute for Health
Information (CIHI). This represents an estimated annual growth rate of 8.3%,
an increase that exceeds other major health-spending categories, such as
hospitals and physicians. In 2008, spending on drugs accounted for 17.4% of
total health spending-nearly doubling since 1985 (9.5%). Spending on
prescribed drugs continues to grow faster (9.0%) than spending on
non-prescribed drugs (4.6%). Prescribed drugs are estimated to have accounted
for 84% of total drug spending in 2008.
    "Over the last 20 years, drugs have consistently remained one of the
major cost drivers in health care," says Michael Hunt, Manager of
Pharmaceutical Programs at CIHI. "Spending on pharmaceuticals has more than
doubled over the past 10 years, outpacing growth in health spending by
hospitals, physicians and other health professionals."

    Spending on prescribed drugs growing faster in the private sector

    For the third consecutive year, private-sector spending on prescribed
drugs grew at a faster rate than that in the public sector. Private-sector
prescribed drug expenditure reached $12.6 billion in 2007, and is forecast to
have reached $14.0 billion in 2008, representing annual growth rates of 11.4%
and 11.0%, respectively. Public-sector expenditure on prescribed drugs reached
$10.5 billion in 2007, and is forecast to have hit $11.2 billion in 2008,
representing annual growth rates of 7.6% and 6.7%, respectively.
    The public-private split for total prescribed drug spending remained
relatively stable over the past 20 years, with approximately 45% financed by
the public sector and 55% financed by the private sector. However, among
private-sector spending on prescribed drugs, the share of spending shifted
from out-of-pocket spending to private insurers. Spending by private insurers
is estimated to have accounted for 67% of private-sector drug spending in
2008, compared to 55% in 1989.
    "The economic downturn is resulting in many Canadians losing their jobs.
Since many Canadians have private health insurance through their employment it
may also mean a loss of private health insurance," says Hunt. "In light of
this situation, it will be important to document what the impact will be on
both the public sector as well as out-of-pocket drug spending over the next
few years."

    Variation among provinces on prescribed drug spending

    Prescribed drug expenditure per person varies across Canada. In 2008,
prescribed drug spending per person is estimated to have ranged from $651 in
Alberta and $652 in British Columbia to $841 in Quebec and $865 in Nova
    There is also variation among the provinces in terms of the source of
funding for drugs. On average across Canada in 2008, 44% of total spending on
prescribed drugs was publicly financed. The proportion of public spending on
prescribed drugs ranged from 32% in New Brunswick and 34% in Prince Edward
Island to 50% in Quebec and 54% in Saskatchewan. Public-sector spending per
person on prescribed drugs ranged from $236 in B.C. and $253 in P.E.I. to $377
in Saskatchewan and $420 in Quebec.

    International comparison in drug spending

    When comparing 23 countries in the Organisation for Economic Co-operation
and Development (OECD) with similar health-reporting systems as Canada's in
2006 (latest available information), Canada had the second-highest level of
total per capita drug spending (including prescribed and non-prescribed
drugs). The United States had the highest level of 2006 per capita spending
($1,015) followed by Canada ($770) and Belgium ($703)-the position of Canada
has been stable over the past few years.
    In 2006, Canada was below the OECD median in terms of what proportion of
total drug spending was publicly financed. The public share of total drug
spending in Canada was 39%, compared to the OECD median of 59%. Among the 23
OECD comparator countries, the share of total drug spending funded by the
public sector ranged from 15% in Mexico to 84% in Luxembourg.

    About Drug Expenditure in Canada, 1985 to 2008

    Drug Expenditure in Canada, 1985 to 2008 provides a descriptive overview
of Canadian drug expenditure trends from 1985 to 2006 and includes estimates
for 2007 and 2008. Drug expenditure consists of prescribed drugs and
non-prescribed products purchased outside hospitals and other health care
institutions. The report draws upon data compiled from CIHI's National Health
Expenditure Database, Canada's most comprehensive source of information on
health care financing and spending, as well as Statistics Canada and the OECD.

    About CIHI

    The Canadian Institute for Health Information (CIHI) collects and
analyzes information on health and health care in Canada and makes it publicly
available. Canada's federal, provincial and territorial governments created
CIHI as a not-for-profit, independent organization dedicated to forging a
common approach to Canadian health information. CIHI's goal: to provide
timely, accurate and comparable information. CIHI's data and reports inform
health policies, support the effective delivery of health services and raise
awareness among Canadians of the factors that contribute to good health.

    The report, as well as the following figures and tables, is available
    from CIHI's website at www.cihi.ca.

    Figure 1 Total Drug Expenditure as a Percentage of Total Health
             Expenditure, Canada, 1985 to 2008 (Figure 1 in the report)
    Figure 2 Annual Growth Rate for Prescribed Drug Expenditure by Source of
             Finance, Canada, 1985 to 2008 (Figure 9 in the report)
    Figure 3 Total Drug Expenditure per Capita by Type and by Source of
             Finance,  by Province/Territory and Canada, 2008 (Figure 13 in
             the report)
    Table 1  Drug Expenditure Summary, by Province/Territory and Canada, 2008
             (Table 2 in the report)
    Table 2  Public Expenditure on Pharmaceutical Goods per Capita and as a
             Percentage of Total Expenditure on Pharmaceutical Goods,
             Reporting OECD Comparator Countries, 2006 (adapted from Table 4
             in the report)

For further information:

For further information: Leona Hollingsworth, (416) 481-2002 ext. 5251,
Cell: (416) 459-6855, lhollingsworth@cihi.ca; Jennie Hoekstra, (613) 241-7860
ext. 6331, Cell: (613) 725-4097, jhoekstra@cihi.ca

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