Medication Costs in Canada Lowest in Decades

March 12, 2014 Updated: March 12, 2014

A new report on prescription drug spending confirms that the growth of medication costs in Canada has slowed to its lowest in two decades, due to license expirations and a recent policy adopted by the provinces. 

“The two things we have seen that started three or four years ago was the expiry of some patents on some pretty widely used chemicals,” said Jordon Hunt, manager of pharmaceuticals information for the Canadian Institute for Health Information, which released the report. 

“On top of that the provinces have also introduced policies that reduce the prices that they are willing to pay for generic medication. They have also worked together to get some purchasing agreements again for generic brands and that has resulted in some savings,” adds Hunt. 

The report estimates that spending on prescription drugs in Canada reached $29.3 billion last year. Accounting for most spending is a mix of common drugs such as proton-pump inhibitors used for conditions like acid reflux. 

One of the highest expenditures was for inflammation and macular degeneration drugs—an age-related condition that reduces a person’s eyesight to the point of blindness in some cases—accounting for 54.8 percent of public drug spending between 2007 and 2012. 

“For macular degeneration there is a newer drug. When a new drug comes on and is found to be effective you tend to see an uptake in that drug,” said Hunt. 

“I think we are seeing slower growth than what we have seen in the last couple of years. In terms of what is going to happen in the future it is difficult to say because things can change so quickly.”

The report estimates that 40 percent of prescribed drugs were covered by the public sector. Seniors accounted for 61.5 percent of provincial and territorial spending for 2012. The change in the availability of generic drugs has also altered insurance expenditures. 

“Generally, we are benefiting from the same things as the public side,” said Steven Frank, Vice President, Policy Development and Health, Canadian Life and Health Insurance Association. 

“We have had the same decline in the growth of costs. I think it is across the board.” 

Kaven Baker-Voakes is a freelance reporter based in Ottawa.