OTTAWA - Spending on prescribed and over-the-counter drugs in Canada outpaced overall health spending last year, and grew faster than the rate of inflation, new figures show.
The Canadian Institute for Health Information reported Thursday that drug spending reached an estimated $27 billion in 2007. That's up 7.2 per cent from the $25 billion spent the previous year.
In comparison, total health spending last year rose 6.6 per cent, to $160 billion from $150 billion in 2006. Inflation hovered around two per cent.
The institute cites increased volume of drug use and the entry of new drugs into the market, which are typically introduced at higher prices, as reasons for the soaring drug costs.
However, the rate of growth for drug spending has slowed from an average annual rate of 9.5 per cent between 1985 and 2005.
The institute says that's likely because pharmaceutical companies are making fewer "blockbuster" drugs geared to the general population in favour of pricier niche products.
"I think what we're seeing now is really a focus on more expensive drugs for smaller populations," said Michael Hunt, the institute's manager of pharmaceutical programs.
"Whether or not that continues I think will depend a little bit on what we see coming to the market, and the focus of where those newer drugs that will hit the market will go."
Health Minister Tony Clement said he hadn't seen the institute's figures, but wasn't surprised that drug costs rose last year.
"Usually the drug costs go up somewhere between eight and 12 per cent per annum, so that would not surprise me," he said as he left a Commons health committee meeting.
Canadians spent far more on prescription drugs than non-prescription drugs. Prescribed drugs accounted for $22.5 billion, or 84 per cent of drug spending in 2007.
There were provincial variations in how much of the tab the government picked up for prescription drugs.
In New Brunswick, the public sector paid for 32 per cent of prescriptions, while Manitoba paid 53 per cent and Quebec paid 52 per cent.
Overall, the public sector covers 38.7 per cent of total drug expenditure in Canada.
Canada trails only the United States in highest total per-capita drug spending out of 20 countries with the Organization for Economic Co-operation and Development (OECD).
Per-capita drug expenditures varied across the country, with New Brunswick showing the highest spending, at $910, and the Northwest Territories the lowest, at $476. The national average was $818 per person.
Newfoundland and Labrador and Saskatchewan had the highest estimated yearly increases in drug spending, with 11.7 per cent and 9.3 per cent, respectively.
The Northwest Territories, Yukon and Nunavut are expected to have the lowest.
The institute is a not-for-profit organization that tracks data provided by hospitals, regional health authorities, doctors and governments.
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