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Canadian Rx atlas maps billions in savings – for now

Dec 12, 2013 |

Canadians are spending less on prescription drugs for the first time since World War II, according to the latest edition of the Canadian Rx Atlas, but University of British Columbia health economists predict the break will be short-lived.

Canadians spent almost $23 billion on prescription drugs in 2012/13, or $650 per capita. After adjusting for inflation, however, drug spending has decreased by approximately one per cent, despite the aging population.


Dr. Steve Morgan

“The good news is we’re spending far less than historic trends would predict, but tectonic changes are mounting beneath the calm surface,” says the Rx Atlas’s lead author Steve Morgan, a professor with the Centre for Health Services and Policy Research at UBC’s School of Population and Public Health, who analyzed drug spending data from 2007-2013 for the 3rd edition of the Rx Atlas.

For example, spending on drugs for high blood pressure, high cholesterol, heartburn and depression fell from $8.7 billion in 2007/08 to $6.7 billion in 2012/13, mainly due to the expiration of brand-name patents and the subsequent availability of low-cost, generic forms of the same drugs. (See other key findings in the Background.)

“But the bulk of the savings from the ‘genericization’ of these high-volume, ‘blockbuster’ drugs has already been quashed by big spending hikes on brand-name drugs that treat serious conditions such as cancer, HIV and multiple sclerosis.”

Morgan says that more than a third of drugs currently being developed by the pharmaceutical industry are specialized, or “niche,” drugs that will come to market at considerable cost. “The pharmaceutical industry is moving towards a new revenue model – we see tell-tale signs of things to come from this Rx Atlas,” Morgan adds. “Policymakers must act now to ensure fair pricing and equitable access before spending gets out of hand again.”

The 3rd edition of the Canadian Rx Atlas is available at http://www.chspr.ubc.ca/pubs/atlas/canadian-rx-atlas-3rd-edition.

BACKGROUND | Canadian Rx Atlas

Key findings:

Generic “blockbuster” vs. specialty “niche” drugs

In 2007/08, $8.7 billion, or 40 per cent of all pharmaceutical spending, was on drugs to treat high blood pressure, high cholesterol, heartburn and depression. High prescription volume made up for the relatively low-cost of these “blockbuster” drugs.

As patents expired in the past five years, the “genericization” of these commonly used drugs translated into $2 billion in savings for Canadians. Meanwhile, spending on various speciality drug groups (Rheumatoid arthritis, HIV, Cancer, Macular degeneration, and MS) doubled from $1.4-billion in 2007/08 to $3.0-billion in 2012/13. Spending on drugs for rheumatoid arthritis and other inflammatory conditions more than tripled from $600 million in 2007/08 to $1.9 billion in 2012/13.

While not as widely used, speciality drugs are much more expensive: the average cost per prescription for hypertension drugs was $26.80 over the five year period while average cost per prescription for specialized inflammatory drugs (rheumatoid, psoriasis, etc.) was $2,166.90.

Continuous surge of depression drugs

Spending on depression drugs increased beyond factors such as population growth and aging – from $1.3 billion in 2007/08 to $1.4 billion in 2012/13.

“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,” says Barbara Mintzes, an assistant professor at UBC’s School of Population and Public Health. “The volume of use we’re seeing across Canada suggests that the same thing may also be happening here.”

Gender gap

The Rx Atlas revealed major differences in prescription drug spending along gender lines. Spending per capita for antidepressants taken by women was double that of men. In the 40-64 age group, $550 million is spent annually on antidepressants for Canadian women and just $270-million for men.

Among children and adolescents aged 0-18, the Rx Atlas revealed unusually high spending on ADHD and asthma drugs for boys.

In both cases, the research team suggests further research is needed to determine if social factors and overprescribing might be at play.