Spending on prescription and non-prescription drugs in Canada reached $26.9 billion last year, an increase of 7.2 per cent over 2006, according to data released Thursday.

Canada has the second-highest level of total per-capita drug spending out of 20 countries with the Organisation for Economic Co-operation and Development (OECD).

According to figures from the Canadian Institute for Health Information, total drug spending rose by $2 billion between 2006 and 2007.

Spending on prescribed drugs was higher than for non-prescribed drugs, according to the report.

"Spending on pharmaceuticals has become a major component of total health expenditure over the last 20 years," said Michael Hunt, manager of pharmaceutical programs at CIHI, in a release.

"With an aging population, increased use of drug therapies and new drugs entering the market, spending on drugs continues to rise at a higher rate than overall health spending and faster than inflation."

Prescription drugs are estimated to account for 16.8 per cent of total health spending, a percentage that has grown steadily since 1985.

N.B., Ont. lead per-person spending

Across the country, drug spending per person varied considerably in 2007. New Brunswick led with $910 per person, followed by Ontario at $878.

Newfoundland and Labrador, and Saskatchewan had the highest estimated growth rates in drug spending per person at 11.7 per cent and 9.3 per cent, respectively. The Northwest Territories (three per cent), Yukon (3.5 per cent) and Nunavut (4.8 per cent) had the lowest.

In terms of public spending on prescribed drugs, coverage also varied across Canada. For example, while in New Brunswick this coverage stood at 32 per cent, in Manitoba it was 53 per cent.

Overall, the public sector covers 38.7 per cent of total drug expenditure in Canada.