Prescription drug spending in Canada is continuing to rise, but overall annual growth slowed last year to the lowest rate in 15 years, according to new figures.

Total spending on medicines is estimated to have reached C$32 billion in 2011, an increase of 4% over 2010 and equivalent to C$929 per Canadian for the year, says the report, from the Canadian Institute for Health Information (CIHI).

The share of total Canadian health dollars spent on medicines last year is put at 16%, the same percentage which was spent on drugs 10 years ago, the report notes.

During the late 1990s and early 2000s, Canada's spending on prescribed drugs experienced double-digit increases but spending is now slowing down, says Michael Hunt, director of pharmaceuticals and health workforce information services at CIHI. This "may reflect recent patent expirations of blockbuster brand-name drugs used to treat common ailments like high cholesterol and hypertension. We've also seen the implementation of generic pricing policies by provincial drug programmes," he adds.

The latter half of the last decade also saw slower growth in the use of antihypertensive drugs and cholesterol-lowerers in Canada, the report notes.

Medicines account for the second-largest share of the nation’s total health care spending, after hospital expenditures, and prescribed drugs represent almost 85% of the nation's total drug spending, reaching an estimated C$27.2 billion in 2011 and increasing by an estimated 4.7% over the previous year, the CIHI report shows.

It also finds that the public-private split for prescribed drug spending has remained relatively stable over the last 10 years, with an estimated 45% of prescribed medicines being financed by the public sector and the remaining 55% by the private sector. In 2011, public-sector spending on prescribed medications is estimated to have reached C$12.1 billion, up 2.2% on the previous year, while private-sector spending increased 6.8% to reach a total of C$15.1 billion.

The report also shows significant variations in spending on prescribed drugs across Canada's provinces last year, with per capita spending ranging from lows of C$576 in British Columbia and C$710 in Manitoba to highs of C$937 in New Brunswick and C$985 in Nova Scotia. CIHI estimates that annual growth in per capita spending on prescribed drugs for the year varied from lows of 1.4% in British Columbia and 2% in Ontario to highs of 7.4% in Saskatchewan and 9.4% in Newfoundland and Labrador.

"While prescribed drug spending is influenced by many factors, slower growth in Ontario and British Columba suggests that their earlier implement of generic pricing policies may be having an impact," comments Michael Gaucher, manager, pharmaceuticals, at CIHI. He goes on to caution, however, that "further research will be needed to assess the effects of generic pricing policies."

Moreover, the study finds Canada to have the second-highest drug spending per capita among eight comparator nations, all members of the Organisation for Economic Cooperation and Development (OECD). Based on 2009 OECD data - the most recent year for which figures are available - the US had the highest per capital total drug spending, at C$1,145, followed by Canada at C$890 and France at C$767.

Of the eight comparator countries, Canada had the second-lowest share of total drug expenditure financed by the public sector in 2009, at 38.8% of the total, compared with a high of 84.7% in the UK, CIHI reports.