New CIHI Report Shows that New Medicines are not the Cost Driver in Canadian Health Care

OTTAWA, May 6 /CNW/ - The following is a statement by Russell Williams President of Canada's Research-Based Pharmaceutical Companies (Rx&D) regarding the report entitled Drug Expenditure in Canada, 1985 to 2010, released by the Canadian Institute for Health Information (CIHI).

"The CIHI report indicating that growth in drug spending in Canada is at its lowest level in 14 years should put to rest the myth that new medicines are a threat to the sustainability of Canada's health care system.

"Total spending on prescription and non-prescription drugs increased by an estimated at 4.8% between 2009 and 2010. This is about half of the rate of increase between 2000 and 2005 and the lowest rate since 1996. This indicates that drugs are no longer the fastest growing component of spending on health care and the level of increases in drug budgets continues to fall despite our aging population.

"New medicines and vaccines represent one of most cost-effective health interventions in the prevention and treatment of disease. They help reduce wait times and can keep people out of emergency rooms and hospitals allowing patients to live healthier, longer and more productive lives.

"CIHI defines pharmaceutical expenditures as prescribed and non-prescribed medicines, which includes personal health supplies, over the counter drugs, dispensing fees, markups and appropriate taxes. We acknowledge that CIHI has begun to break out private non-prescription and private prescription spending in its report. We would urge them to provide more clarity in breaking down the components of public prescription drug spending as it currently includes non-drug health products. Canadians would also be better informed if CIHI could also break out growth in spending for brand and generic drugs because we know that growth in brand spending has slowed more dramatically than overall drug spending.

"Although the report states that total drug expenditures make up 16.3 per cent of total health expenditures, this should be further broken down to tell Canadians how much brand and generic drugs make up of total public expenditures on health.

"The CIHI report shows public spending on drugs in Canada as a total of drug expenditures was 38.4% which was the second lowest of the 26 OECD countries studied. Only the U.S has a lower percentage of public spending.

"As drug spending continues to level off, governments have an opportunity to invest in the new scientific discoveries so that Canadians have access to the right medication at the right time.

"The Rx&D International Report on Access to Medicines found that Canadians who rely on public drug plans do not have the same level of coverage for new medicines as those in other OECD countries, nor do they have access to the same level of coverage as those who have private insurance through their employers. In fact, Canada ranked 23rd out of 29 countries in terms of coverage of new treatments for cancer, diabetes and other diseases.

"The research based pharmaceutical community also contributes to better managing health costs by supporting chronic disease management and appropriate utilization programs. Our industry generates 60,000 jobs in the overall economy and funds 27% of all health science research and development in Canada."

About Rx&D
Rx&D is the association of leading research-based pharmaceutical companies dedicated to improving the health of Canadians through the discovery and development of new medicines and vaccines. Our community represents 15,000 men and women working for 50 member companies and invests more than $1 billion in research and development each year to fuel Canada's knowledge-based economy. Guided by our Code of Ethical Practices, our membership is committed to working in partnership with governments, healthcare professionals and stakeholders in a highly ethical manner.


For further information:

Mike Murphy, Communications
Telephone: 613.236.0455

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