A new analysis of prescription drug expenditures found that total prescription drug purchases in Canada in 2020 reached $32.7 billion, an increase of 4.3% from the previous year. Additionally, over the past 20 years this spending has grown at an average annual rate of 6%, three times the average inflation rate.
The peer-reviewed analysis, published today in CADTH’s Canadian Journal of Health Technologies, examined drug purchases between 2001 and 2020 in the retail and hospital sectors using the IQVIA Canadian Drugstore and Hospital Purchases Audit. As part of this analysis, the authors also forecasted future drug costs and conducted an environmental scan to look for head and tail winds that may impact future spending. This makes the article among the first to offer an expansive view of Canada’s drug spending ecosystem, including spending in the hospital sector and public and private spending in the retail sector. The researchers found that total spending on hospital-administered drugs increased from $1.3 billion in 2001 to $4.9 billion in 2020, representing a growth of 264%. Meanwhile, total drug expenditure in the retail sector grew from $10.5 billion in 2001 to $27.8 billion in 2020, an increase of 165%.
The researchers also identified the top 25 medications with the highest total purchases in 2020 in both the retail and hospital sectors. The top drugs by overall spending in the retail sector included the biological therapies infliximab, adalimumab, and ustekinumab, which are immunosuppressants. In comparison, the top drugs in hospitals included cancer drugs such as pembrolizumab, nivolumab, and daratumumab. The authors noted that in both the retail and hospital sectors, these drugs accounted for a large proportion of total purchases, 26% and 53%, respectively.
Looking ahead, the authors forecast continued growth in Canadian drug spending. They predict moderate levels of growth in spending in the outpatient sector (3% to 4%) but higher growth (7% to 8%) in the hospital setting. Some of the factors that may increase overall drug spending include a large pipeline of products, new drugs for prevalent diseases like cancer and diabetes, broader indications for some drugs that may drive up utilization, and expensive drugs for rare diseases. However, emerging generic formulations of frequently used drugs could help drive down costs. An analysis of the therapies that are anticipated to have the highest impact on drug budgets is also discussed.
This national group of experts from across Canada aims to conduct this forecast annually.
The Canadian Journal of Health Technologies is the open-access, scientific and policy journal of CADTH — the Canadian Agency for Drugs and Technologies in Health. Journal articles are published as soon as they are ready and issues are published monthly.
The Canadian Journal of Health Technologies publishes the work of CADTH, including its horizon scans, reimbursement reviews, and health technology assessments. Articles include clinical and cost-effectiveness research, patient perspectives, as well as legal, social, environmental, and implementation reviews. Topics covered are relevant to health policy decision-makers, clinicians, patients, caregivers, the pharmaceutical and medical device industry, and the Canadian and global health technology assessment community.
CADTH is funded by Canada’s federal, provincial, and territorial governments, except for Quebec. All views and opinions expressed in the Canadian Journal of Health Technologies are those of the authors and do not necessarily reflect those of CADTH’s funders.
CADTH is an independent, not-for-profit agency funded by Canadian federal, provincial, and territorial governments to provide credible, impartial advice and evidence-based information about the effectiveness of drugs and other health technologies to Canadian health care decision-makers.