Larger portion of Canada’s public drug dollars spent on high-cost drugs

December 17, 2019

Toronto — Figures released by the Canadian Institute for Health Information (CIHI) show that high-cost drugs continue to account for an increasing proportion of Canada’s public drug spending.

In 2018, 40% of public drug dollars were spent on just 2% of beneficiaries. 3 out of 5 of these individuals used a drug therapy that cost $10,000 or more per year, most often an antiviral to treat hepatitis or a biologic to treat conditions like rheumatoid arthritis and Crohn’s disease.

“The proportion of public drug dollars being spent on high-cost drugs continues to grow. While new drugs and higher use of drugs can increase spending, factors like drug pricing policies and further uptake of biosimilars could lead to savings,” said Michael Gaucher, Director, Pharmaceuticals and Health Workforce Information Services at CIHI, in a press release. “It will be important to monitor these trends going forward. It is equally important to remember that increases in drug spending can lead to savings in other areas of health spending.

Spending increasing overall, but not for all drug classes

Public drug spending reached $14.5 billion in 2018 — a 7% increase over the previous year. About half of this growth was a result of changes to Ontario’s drug program. In January 2018, the Ontario government extended drug coverage to all Ontarians age 24 and younger. Excluding those new Ontario beneficiaries, spending across the country increased by about 3%.

Protein kinase inhibitors — a class of drugs commonly used to treat various forms of cancer — saw the highest increase, with spending reaching $421.7 million in 2018. Over the previous 5 years, spending on these drugs almost tripled. The top 3 increases were all for drug classes with average annual costs of $10,000 or more.

Savings from generic drugs and price reductions negotiated through the pan-Canadian Pharmaceutical Alliance (pCPA) continued to offset some of the growth. Commonly used drugs like those used to treat high blood pressure, heart failure, high cholesterol and gastroesophageal reflux disease all saw significant decreases in spending.

Generic drug uptake remained high. However, uptake of biosimilars was much lower, accounting for only 12% of use when available.  Biosimilars are highly similar versions of biologic drugs that come to market after the patent for the biologic product has expired.  To date, the uptake of biosimilars has been slower in Canada than in other Organisation for Economic Co-operation and Development (OECD) countries.

Other drug spending highlights

  • In 2018, 28% of Canadians received benefits from a public drug program, including 79% of seniors.
  • 1 out of 4 individuals for whom a drug program paid $10,000 or more were taking 15 or more classes of drugs.
  • Spending on drugs used to treat conditions like rheumatoid arthritis and Crohn’s disease accounted for the highest proportion of drug spending (8%) for the seventh consecutive year, followed by antivirals to treat hepatitis C (5%).
  • Spending on all opioids decreased from $281.1 million in 2017 to $265.2 million in 2018.  This is due in large part to fewer people starting on opioids, and fewer people taking opioids on a long-term basis.

Written by CIHI staff.


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