Canadian spending on medications — both prescription and non-prescription — hit the $30-billion mark last year, rising $1.5 billion from the previous year, a new report estimates.
The increase of 5.1 per cent is the lowest annual growth rate seen in a decade, says the detailed 158-page report released Thursday by the Canadian Institute for Health Information.
It’s been a nearly 20-year run of “extraordinarily fast growth in spending,” said Steve Morgan, an associate professor at the Centre for Health Services and Policy Research at the University of British Columbia.
But in the last couple of years, growth has been slower and it’s expected to continue to slow for at least three or four years, Morgan said from Vancouver.
“It doesn’t have anything to do with sort of the downturn of the economy or population aging,” he explained.
“It has to do with the fact that the big blockbuster drugs that actually drove all that spending for the last 20 years are all coming off patent. If you’re a shareholder of pharmaceutical stocks, this is bad. If you’re a payer for medicines, it is good.”
Generic medicines are often significantly lower in price.
Prescribed drugs account for 85 per cent of total drug spending in Canada.
Michael Hunt, director of pharmaceuticals and health workforce information at the institute, said the rate of growth for prescribed drugs was 5.6 per cent, down from higher rates of growth like nine per cent in 2006 and 14 per cent in 2000.
“We see in about the last three years that prescribed drug expenditure is now coming in line (with) what we’ve seen in terms of growth in overall health expenditures,” he said from Ottawa.
“Prior to 2006, prescribed drug expenditure in general always exceeded overall health expenditure increases.”
Drugs comprise about 16.4 per cent of total health expenditures.
Although the report doesn’t lay out possible reasons for the lower rate of growth in drug costs, Hunt surmised that health promotion efforts to counter obesity and limit smoking, for instance, might have had an effect on whether people need medications.
Or, he suggested, there may be cases in which symptoms are controlled through surgery rather than drugs.
And he too noted the absence of major new drugs on the market.
“We also haven’t seen a lot of new blockbusters like lipid-lowering agents and those sorts of things in the last few years that would have an impact on large numbers of the population for common diseases,” Hunt said.
Growth in private-sector spending on prescribed drugs outpaced growth in public-sector spending, the report said.
There are “many reasons for that, but partly we would see sort of a focus of the public drug plans on controlling expenditures with their own policies,” Hunt said.
Spending per capita on prescribed drugs was highest in Newfoundland and Labrador ($908), and lowest in Alberta ($633) and British Columbia ($596).
The data are obtained from provincial accounts, surveys, third-party drug insurance companies and Statistics Canada information on household spending, Hunt said.
In terms of the international community, the report said Canada’s per capita drug spending in 2007 — the latest year for which comparison figures were available — was $836, with only the United States spending more per capita among the 23 countries of the Organization for Economic Co-operation and Development.
Morgan said the United States and Canada are alone in the western developed world in not having a universal system for financing medicines.