Canada’s drug spend costs are not increasing as fast as previous years, says the Canadian Institute for Health Information.
The rate of change of the country’s annual total drug expenditure is at its lowest since 1996, and average annual growth in the past 10 years has been lower than growth over any other 10-year period dating back to 1985, according to the report Drug Expenditure in Canada, 1985 to 2012.
Total drug expenditure reached $32.0 billion in 2011 and $33.0 billion in 2012, representing annual growth rates of 4.0% and 3.3%, respectively.
This trend is due, in part, to expiration on patents of blockbuster brand name drugs and the subsequent entry of lower-priced generic drugs used to treat common ailments—such as high cholesterol and hypertension—as well as the implementation of generic pricing policies by provincial drug programs.
What’s drug spend being used on?
Unsurprisingly, prescribed drugs make up most of the spend. The report says it’s responsible for 84.1% and 84.0% of total drug expenditure in 2011 and 2012, respectively. Expenditure on prescribed drugs reached $26.9 billion in 2011 and $27.7 billion in 2012, representing annual growth rates of 3.8% and 3.2%, respectively.
Expenditure on non-prescribed drugs reached $5.1 billion in 2011 and $5.3 billion in 2012, representing annual increases of 4.7% and 4.4%, respectively.
Who is paying?
In the private sector—which includes private insurers as well as households and individuals—spending on prescribed drugs reached $15.4 billion in 2012, representing an annual growth rate of 4.1%.
The public sector (i.e., provincial/territorial and federal drug subsidy programs and social security funds) financed an estimated $12.3 billion (44.5% of prescribed drug spending) in 2012, representing an annual growth rate of 1.9% (the lowest growth rate since 1996).
How did drug expenditure vary provincially in 2012?
Total drug expenditure per capita ranged from $736 in British Columbia and $873 in Alberta, to $1,110 in New Brunswick and $1,160 in Nova Scotia.
Annual growth in total drug expenditure ranged from 2.3% in Prince Edward Island and 2.4% in Ontario, to 4.1% in Alberta and 6.8% in Newfoundland and Labrador.
The proportion of prescribed drugs financed by the public sector varied across the provinces. It ranged from 32.5% in New Brunswick and 34.5% in Newfoundland and Labrador, to 49.3% in both Alberta and Saskatchewan.