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Strong Rise in Canadian Drug Bill in 2004

April 11, 2005

According to a study carried out by Canada's Institute for Health Information, the country's drug bill increased 8.8% last year to CAD21.80bn (US$17.75bn), implying a rise in per capita spending to CAD681. Further, drugs are now the country's fastest-growing sector of health provision, now accounting for approximately 17% of total health spending, second only to hospitals. Roughly 83% of Canada's annual drug spending is now estimated to be on prescription products.

However, despite or because of Canada's system of socialised medicine, the survey notes that the public sector's share of the country's overall spending on pharmaceuticals is the second lowest in the OECD group of nations, at 37.6%. Further, the total drug bill conceals a wide variation in provincial spending levels.

The latest indications that Canada's drug spending continues to rise strongly will no doubt be cause for concern for health authorities, although it is unlikely to be much of a surprise. In line with trends in many developed markets, factors including a fast-ageing population have driven increased consumption of drugs, and the ongoing replacement of older drugs with newer therapies also continues to drive up spending.