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Pharma’s share of Canadian health spend set to fall this year

World News | November 05, 2010


Lynne Taylor

Pharma’s share of Canadian health spend set to fall this year

Canada will spend C$31.1 billion on prescription drugs in 2010, an increase of 4.8% over last year, but the share of total health dollars spent on drugs will be down 0.4%, say new government figures.

Hospitals, drugs and physician services, in that order, continue to account for the largest share of spending on health in Canada, according to the latest report from the Canadian Institute for Health Information (CIHI). For the past two decades, there has been an increase in the share of spending on drugs and a fall in hospitals’ share of spending, but more recent trends show patterns may be shifting, says the report, which forecasts that in 2010, spending on hospitals and on physicians will reach C$55.3 billion and C$26.3 billion, respectively.

For the fourth year in a row, growth in physician spending has outpaced growth in hospital and drug expenditures, the report adds. This area is forecast to grow 6.9% this year, while hospitals expenditures are set to rise 6.2% and spending on drugs will be up 4.8%. As a result, the share of total health dollars spent on physicians will increase 1.5% this year while the share spent on drugs will fall 0.4%, it forecasts.

Total spending on health care in Canada is expected to reach C$191.6 billion this year, growing an estimated C$9.5 billion (5.2%) since 2009, says the report, which is entitled National Health Expenditure Trends. This growth represents an increase of C$216 per Canadian, bringing total health expenditure per capita to an estimated C$5,614. After removing the effects of inflation and population growth, health care spending per person is expected to increase by 1.4% in 2010, the lowest annual growth rate seen in 13 years.

Moreover, health care spending will reach 11.7% of Canada’s Gross Domestic Product (GDP) this year, which is a decline from its 2009 level of 11.9% in 2009, but still higher than in 2008, when it was 10.7%, the CIHI forecasts.

Canadian government health care expenditures will reach C$135.1 billion in 2010, while private-sector spending, which includes both private insurance and out-of-pocket expenses, will total an estimated C$56.6 billion, the report adds. For more than a decade, public- and private-sector health spending in Canada has been growing at about the same rate, with the public sector accounting for about 70% of the total health care bill and the private sector for 30%, it notes.

Canada is in the top fifth in terms of per capita health spending in a comparison of 26 countries with similar accounting systems which are members of the organization for Economic Cooperation and Development (OECD), according to the CIHI.

In 2008, the latest year for which data is available, per capita spending on health care remained highest in the US (US$7,538), followed by Norway (US$5,003), Switzerland (US$4,627) and Luxembourg (US$4,210), while Canada’s spending was similar to several other OECD countries including the Netherlands (US$4,063), Austria (US$3,970), Germany (US$3,737) and France (US$3,696), it says.

However another report, from Canada’s research-based pharmaceutical industry association, Rx&D, says that Canada now ranks 23rd out of 29 OECD countries in terms public plan coverage of 150 new medicines, including 33 cancer drugs.

This ranking puts Canada ahead of only Poland, New Zealand, Luxemburg, Spain, Japan and Turkey and behind Mexico, the Czech Republic and the Republic of Korea, says Rx&D.

www.cihi.ca

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