Drug spending growth slows in Canada

Growth in drug spending is slowing, but is estimated to have reached $31.1 billion in 2010, according to a new report.

Growth in drug spending in Canada is slowing, but is estimated to have reached $31.1 billion in 2010, according to a new report.

The total increase in expenditure is $1.4 billion, or 4.8 per cent, since 2009, the Canadian Institute for Health Information said Thursday in its report, Drug Expenditure in Canada, 1985 to 2010.

 In comparison, the average annual growth rate in drug spending was nearly twice as high between 2000 and 2005, at 8.9 per cent. 

"From a consumer perspective, I think I'm always quite surprised at the actual amount of expenditure on drugs when you consider the whole health-care system," said Michael Hunt, the institute's director of pharmaceuticals and health workforce information in Ottawa.

Canadians may think of hospitals and physicians as being expensive, yet drugs are second in terms of overall expenditures, he added.

The potential good news for governments in the short term is that the slowdown in growth of drug expenditures may offer opportunities for longer-term planning on how to fund this part of health care, Hunt said.

Two forces may be driving the downward spending trend, the researchers said:

  • The dawning era of lower-priced generic drugs for blockbuster treatments for high cholesterol and hypertension.
  • Lower pricing for generics by governments in British Columbia and Ontario.

B.C. and Ontario had the lowest estimated annual growth in per capita spending on prescribed drugs at 1.8 per cent and 2.3 per cent, respectively.

Quebec saw higher annual growth rates at 5.4 per cent, as did Newfoundland and Labrador at 6.2 per cent.


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The data in the report points to a trend of not increasing pharmacare despite repeated calls for governments "to do a better job of helping Canadians pay for their medicine," said Steve Morgan, associate director of the Centre for Health Services and Policy Research at the University of British Columbia.

"The literature on access to medicines and the use of prescription drugs suggest that even at very low cost, financial barriers to medicines do exist. So even if it is available as a cheap generic, Canadians would probably be better off if they had some level of coverage so it was available to them basically free or at a very nominal co-payment charge," Morgan said.

The slowing growth in spending costs is a double-edge sword, Morgan said. It offers a more realistic opportunity for affordable pharmacare. At the same time, if available drugs are cheaper then the need for Canadians to be insured doesn't seem as stark.