05/03/2012 04:05 EDT | Updated 07/03/2012 05:12 EDT

Drug spending growth lowest in 15 years

Drug spending by Canadians in the public and private sectors slowed in 2011, reaching an estimated $32 billion, according to a new report.

The Canadian Institute for Health Information's report, Drug expenditure in Canada, 1985 to 2011, showed drug spending is still increasing but the annual rate of increase is the lowest in 15 years.

The slowing in spending may reflect recent patent expiries of blockbuster brand name drugs used to treat high cholesterol and high blood pressure, said Michael Hunt, the institute’s director of pharmaceutical and health workforce information services.

The share of total health dollars spent on drugs was an estimated 16 per cent last year, the same as 10 years ago.

Spending per person on prescribed drugs ranged from lows of $576 in British Columbia to a high of $985 in Nova Scotia. Growth was slowest in British Columbia and Ontario, which both introduced generic pricing policies.

The patent expiry on blockbuster drugs and the provincial policy changes for generic pricing go hand in hand, said Steve Morgan, associate director of the Centre for Health Services and Policy Research at the University of British Columbia.

"The slow rate of growth is noteworthy," Morgan said in an interview. "But it's somewhat surprising to those of us who are analysts of the sector because many of us, including myself, would have been predicting that drug spending would have been flat or negative."

The fact that CIHI forecasts growth in spending reflects how much is going on beneath the surface, Morgan said.

As the era of blockbuster drugs ends, a new era of specialized medicine for serious conditions like cancer is driving unprecedented prices.

The change raises new challenges both in terms of deciding how much is a fair price to pay and how to decide what should be covered for individuals compared with populations, Morgan said.