Total drug expenditure per capita by type and by source of finance in 2008. (CIHI)

Spending on drugs in Canada reached an estimated $29.8 billion, or $897 per person in 2008, according to a report released Thursday.

The report by the Canadian Institute for Health Information said drug spending last year accounted for 17.4 per cent of total health spending — nearly doubling since 1985, when it was 9.5 per cent.

Prescription medications are estimated to have accounted for 84 per cent of total drug expenditures last year.

Spending on prescription medications continued to grow faster (9.0 per cent) than spending on non-prescribed drugs (4.6 per cent).

For the third straight year, private spending on prescribed drugs grew at a faster rate than in the public sector. Private sector prescribed drug expenditures reached $12.6 billion in 2007, and is forecast to have reached $14.0 billion in 2008, according to the report.

Public-sector expenditure on prescribed drugs reached $10.5 billion in 2007, and is forecast to have hit $11.2 billion in 2008.

"The economic downturn is resulting in many Canadians losing their jobs," said Michael Hunt, manager of pharmaceutical programs at the institute.

"Since many Canadians have private health insurance through their employment it may also mean a loss of private health insurance. 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."

Drug spending continued to outpace growth in health spending by hospitals, doctors and other health professionals, Hunt said.

Spending by private insurers is estimated to have accounted for 67 per cent of private-sector drug spending in 2008, compared to 55 per cent in 1989.

Provincial differences

In 2008, prescribed drug spending per person was estimated to have ranged from $651 in Alberta and $652 in British Columbia to $841 in Quebec and $865 in Nova Scotia.

On average across Canada last year, 44 per cent of total spending on prescribed drugs was publicly financed, ranging from 32 per cent in New Brunswick to 54 per cent in Saskatchewan.

Internationally, Canada had the second-highest level of total per capita spending for prescribed and non-prescribed drugs in 2006 at $770, after the U.S. at $1,015. Belgium was third among countries in the Organization for Economic Co-operation and Development at $703.

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 per cent, compared with the OECD average of 59 per cent.