Canada's Research-Based Pharmaceutical Companies

Canada's Research-Based Pharmaceutical Companies

November 21, 2013 11:03 ET

Latest Research shows cost of medicines covered by employee benefit plans will be sustainable

OTTAWA, ONTARIO--(Marketwired - Nov. 21, 2013) - One of the most rigorous and detailed forecasts ever conducted for the Canadian private drug plan market shows that drug cost growth within private plans will be in the low single digit range in the coming 5-year period. This news is important for Canadian employers who offer drug coverage to their employees as part of their health benefit plans. These results show that, at a market level, the private drug plan system growth will be sustainable.

Rx&D commissioned IMS Brogan, the Canadian business unit of IMS Health a global leader in healthcare market insights, to conduct a forecast of private drug plan drug costs for 2013-2017. The IMS Brogan Private Drug Plan Drug Forecast shows that the Compounded Annual Growth Rate (CAGR) of private market drug costs, at an overall market level, will be in the range of 1.6% to 2.8 % over the five-year forecast period.

"Individual Canadians, employers, healthcare providers and industry all want the same thing - affordable and predictable drug coverage that allows for access to the right treatment at the right time," said Russell Williams, President, Rx&D. "We believe this new information sheds light on questions of affordability and the value that innovative medicines contribute to individual well-being and workplace health and productivity."

This Forecast of drug cost is important because more than 20 million Canadians rely upon private drug plans to remain healthy and productive both at home and at work (PRISM 2012).

Concerns have been expressed in the private market about the potential costs of specialty and biologic medicines and the impact of an aging population and a rapidly changing business environment. The key findings observed by Rx&D, based on the IMS Brogan Forecast, include:

  • At an overall market level, drug costs in private drug plans will experience low single digit year-over-year growth during the forecast period.
  • Brand patent loss and generic pricing reform will have largest the impact on private plan drug costs, offsetting the incremental cost of new medicines entering the market and impact of aging.
  • The impact of new medicines entering the market is partly offset by the displacement of previous therapies. As such, their cost impact on the total market is mitigated.
  • Specialty medicines treat very small patient populations. As a result, the proportional impact of these new products on the total market is also mitigated.
  • New cancer medications save lives. Their costs have a relatively small impact on private drug costs, mainly due to the fact that these medicines are often covered by hospitals, cancer care agencies and provincial programs.
  • The experience of individual private plan payers may be different from the overall forecast of the private market.

The IMS Brogan Forecast uses rigorous evidence and analysis, including segmenting and forecasting the private market by therapeutic classes. The Forecast is based an on exhaustive study of drug utilization patterns specific to private drug plans in Canada.

For more information or to view the report, please visit the Rx&D website at

About Rx&D

Rx&D is the association of leading research-based pharmaceutical companies dedicated to improving the health of Canadians through the discovery and development of new medicines and vaccines. Our community represents the men and women working for more than 50 member companies which invest more than $1 billion in research and development each year to fuel Canada's knowledge-based economy, contributing over $3 billion to the Canadian economy. Guided by our Code of Ethical Practices, our membership is committed to working in partnership with governments, private payers, healthcare professionals and stakeholders in a highly ethical manner.

About IMS Brogan

IMS Brogan is the Canadian business unit of IMS Health, a leading worldwide provider of information; technology and services dedicated to making healthcare perform better. With a global technology infrastructure and unique combination of real-world evidence, advanced analytics and proprietary software platforms, IMS Health connects knowledge across all aspects of healthcare to help clients improve patient outcomes and operate more efficiently.

Contact Information