Canada’s Drug Spending Growth Outpaces That for Hospitals and Doctors

Canada is expected to spend $33.7 billion on prescribed drugs in 2018, according to the Canadian Institute for Health Information (CIHI). This marks an estimated annual increase of 4.2% for drugs, compared with 4.0% and 3.1% for hospitals and doctors, respectively. 

In 2018, $14.4 billion (42.7%) of prescribed drug spending is expected to be financed by the public sector, while the remainder will be financed by private insurance and individuals paying out of pocket. Drug spending is just part of the expected $253.5 billion in total health spending in Canada this year. 

Biologics used to treat conditions like rheumatoid arthritis and Crohn’s disease will account for the highest proportion of public drug spending (8.2%) for the sixth consecutive year, while antiviral drugs to treat hepatitis C will account for the second-highest proportion (5.0%).

Looking back to 2017 spending, about 1 in 4 Canadians received a benefit from a public drug program, with people living in low-income and rural/remote areas more likely to receive a benefit. In addition, people with high drug costs ($10,000 or more) represented only 2.3% of beneficiaries but accounted for over one-third (36.6%) of public drug spending last year. 

Other health spending highlights for 2018:

• Total health expenditure is expected to rise by 4.2% to reach $6,839 per person in 2018.
• Provincial per capita health expenditures will continue to vary, from $7,552 in Alberta and $7,443 in Newfoundland and Labrador to $6,597 in British Columbia and $6,584 in Ontario.
• Hospitals (28.3%), drugs (15.7%) and physician services (15.1%) are expected to continue to account for the largest shares of health dollars (close to 60% of total health spending). The remaining 41% will be spent on other health care goods and services, including long-term care facilities and allied health professionals.

National Health Expenditure Trends, 1975 to 2018 provides an overview of how much is spent on health care annually, in what areas money is spent and on whom, and where the money comes from. It features comparative expenditure data at the provincial/territorial and international levels, as well as health spending trends from 1975 to 2018.

Prescribed Drug Spending in Canada, 2018: A Focus on Public Drug Programs includes drug claims from all provinces and Yukon, plus 1 federal program administered by the First Nations and Inuit Health Branch (FNIHB). For the first time ever, Quebec data is included.

“Drug spending is increasing more than the other major areas of health spending — with a large proportion of drug spending going toward high-cost drugs for a small number of individuals. Examining recent trends in drug spending is helpful as Canada contemplates policies like international trade agreements, such as the United States–Mexico–Canada Agreement (USMCA), and national pharmacare. Opportunities to benefit from life-changing drugs have never been greater; but at the same time, spending on drugs through public drug programs has never been higher.”  — Brent Diverty, Vice President, Programs, Canadian Institute for Health Information

The Canadian Institute for Health Information (CIHI) is an independent, not-for-profit organization that provides essential information on Canada’s health systems and the health of Canadians. 

We provide comparable and actionable data and information that are used to accelerate improvements in health care, health system performance and population health across Canada. Our stakeholders use our broad range of health system databases, measurements and standards, together with our evidence-based reports and analyses, in their decision-making processes. We protect the privacy of Canadians by ensuring the confidentiality and integrity of the health care information we provide.