Some blockbuster drugs like Lipitor are set to come off patent in the next few years, which could further slow the rate of spending on pharmaceuticals. ((Mel Evans/Associated Press))

Spending on prescription and non-prescription drugs in Canada reached an estimated $30 billion, or $836 per person, last year, but the rate of increase is slowing significantly, according to a report.

The Canadian Institute for Health Information said total spending in 2009 rose by about $1.5 billion over the previous year, but that 5.1 per cent increase was "the lowest annual growth rate observed in more than a decade."

The institute's annual report on drug expenditure lists spending trends for prescribed and non-prescribed drugs by province and territory and whether the spending was by government-paid drug plans or private sources. It also includes international comparisons.

In 2009, drugs accounted for the second-largest share of total health care after hospitals — 16.4 per cent of the country's total $183-billion health-care bill, or about $30 billion. Hospitals consumed about $50 billion.

"We spend a lot of money on drugs; $30 billion is a lot of money," said Michael Hunt, director of pharmaceuticals and health workforce at CIHI. "Even when we see increases slowing, we're still increasing by more than a billion a year."

Of total drug spending, 85 per cent country-wide was on prescriptions. The reminder was non-prescribed, discretionary drug purchases such as Aspirin and Gravol.

$4.5-billion difference

The most up-to-date international comparisons with OECD countries were for 2007. Canada was second behind the U.S., which spends $1,062 per capita.

"The U.S. and Canada are conspicuous outliers in that they spend the most on medicines of all these countries," said Steve Morgan. an associate professor at the Centre for Health Services and Policy Research at the University of British Columbia, commenting on the report.

"Because they express these things in per capita terms, you think, 'Oh well, what's the difference between say $711 spent in France versus the $836 spent in Canada?' That may not seem like a particularly big difference until you realize that translated to the Canadian population, that's a $4.5-billion difference. It's real money."

The highest per capita spending on prescribed drugs was in Newfoundland and Labrador at an estimated $908, followed by Nova Scotia at $903 and Quebec at $879. The national average was $756. The lowest per capita spending was in British Columbia at $596.

Ways to save

In Atlantic Canada, public plans have opened up, Hunt noted, while Ontario has been reigning in costs on public spending for several years.

Last year in Ontario, public spending on prescribed drugs actually decreased by 0.8 per cent, according to the report.

Few new blockbuster pharmaceutical drugs have come on the market in the past few years, which could be in part why growth in spending has fallen for the third straight year, Hunt said.

Another reason spending growth is slowing is that existing blockbuster selling drugs are also set to come off patent in the next year or two, and some have already, Hunt and Morgan noted.  

To achieve more savings without a national pharmacare program, another approach would be common price negotiation, Morgan suggested.

"Can we find mechanisms to actually combine the purchasing power of all of the payers in this country — the private sector, the public sector and the different provinces — through some mechanism that actually negotiated on the collective behalf?" he said.

Such an approach could apply savings not just to the public plan but to everyone, Morgan said, adding it would not be easy.