Canadians are now spending less on prescription drugs for the first time since World War II, but this break will be short-lived, say health economists.

Adjusted for inflation and despite an aging population, Canada’s prescription drug spending fell 1% from 2007-8 to 2012-13, when it totaled C$23 billion, or C$650 per capita, says the latest edition of the Canadian Rx Atlas, produced by health economists at the University of British Columbia (UBC).

“The good news is we’re spending far less than historic trends would predict, but tectonic changes are mounting beneath the calm surface,” says study lead author Steven Morgan, a professor with the Centre for Health Services and Policy Research at UCB’s School of School of Population and Public Health.

For example, spending on drugs for high blood pressure, high cholesterol, heartburn and depression fell from C$8.7 billion in 2007-8 to C$6.7 billion in 2012-13, mainly due to patent expiries on brand-name drugs and the subsequent availability of cheaper generic versions.

But most savings from the genericisation of these high-volume blockbusters have already been quashed by big spending hikes on specialised brand-name drugs to treat conditions such as cancer, HIV and multiple sclerosis, says Prof Morgan. And over a third of drugs currently in R&D are such “niche” products that will come to market at considerable cost, he adds.

Spending on specialty drug treatments doubled from C$1.4 billion in 2007-9 to C$3 billion in 2012-13, while for inflammatory conditions such as rheumatoid arthritis, the drugs bill more than tripled, from C$600 million to C$1.9 billion.

And the average cost per prescription for hypertension drugs was C$26.80 over the five-year period, while for specialised inflammatory drugs the average cost was C$2,166.90.

“The pharmaceutical industry is moving towards a new revenue model – we see tell-tale signs of things to come from this Rx Atlas,” says Prof Morgan.

The latest study also finds that Canadian spending on drugs to treat depression has increased beyond factors such as population growth and aging, from C$1.3 billion in 2007-8 to C$1.4 billion in 2912-13.

“Studies in the US have shown that many people prescribed antidepressants do not have a psychiatric diagnosis, and that this is why antidepressant use is so common. The volume of use we’re seeing across Canada suggests that the same thing may be happening here,” says Barbara Mintzes, an assistant professor at the UCB School.