Canadians are expected to spend $21.8 billion on prescription and non-prescription drugs in 2004, up nearly nine per cent from the previous year, a new report shows.

The Canadian Institute for Health Information released the report on total drug expenditures per person on Tuesday.

The amount for last year was expected to reach $681 per capita, although final numbers for 2003-04 are still being added up.

Drugs continue to be the fastest-growing category of health-care spending.

The report confirms the amount Canadians spend both privately and publicly on prescription and non-prescription drugs is increasing.

Prescription drug spending is projected to increase by 10 per cent over one year to $18 billion in 2004.

Drug spending is rising because:

• The country's aging population is taking more drugs.
• Newer drugs for conditions like cancer and rheumatoid arthritis are increasingly expensive.
• Older drugs are being prescribed for new indications.

Spending on drugs is now five times the amount spent in 1985, said the report, titled The Drug Expenditure in Canada, 1985-2004.

Public drug coverage varies across the country, with total drug expenditure per person ranging from a high of $732 in Ontario to $615 in Saskatchewan and $542 in British Columbia.

Drugs continue to be the fastest-growing type of health-care spending, and the second-largest category of spending after hospitals.

Spending on physicians, the third-biggest category, is expected to be $16.9 billion, or 12.9 per cent of total health expenditure in 2004.

In 2002, Canada ranked fifth among 11 countries for drug spending as a percentage of total health spending, according to the Organization for Economic Co-operation and Development.