Canadian Health Policy Institute

Canadian Health Policy Institute

November 27, 2013 06:00 ET

Study Finds Per Capita Spending on Patented Drugs Declined -1.8% Over the Last Five Years, While Per Capita Spending on All Other Health Care Grew by 23.2%.

TORONTO, CANADA--(Marketwired - Nov. 27, 2013) - A new study by the Canadian Health Policy Institute (CHPI) sets the facts straight about the cost of patented drugs in Canada. Knowing the truth about drug costs is important. The cost of patented drugs is often cited to justify the regulation of pharmaceutical markets and to restrict public and private insurance coverage of new medicines. Policy decisions made on the basis of bad information can create unintended consequences that affect patients' access to the best available treatments and distort the efficient achievement of desired health outcomes.

The study used the most recent data from two national government agencies, the Patented Medicine Prices Review Board (PMPRB) and the Canadian Institute for Health Information (CIHI), to compare spending on patented drugs versus the rest of health care. The results were published in CHPI's online journal, Canadian Health Policy.

The study establishes the following facts:

  • Total direct spending on patented drugs accounted for $12.8 billion or only 6.2% of the $205.9 billion spent in total on all health care in 2012.
  • Total direct spending on patented drugs grew by only 4.1% from 2007 to 2012, while total spending on all other health care (excluding patented drugs) grew by 30.5%.
  • Per capita total spending on patented drugs declined -1.8% from 2007 to 2012, while per capita total spending on all other health care grew by 23.2%.
  • Per capita spending on patented drugs was $366.97 in 2012 accounting for less than 1 percent (0.70%) of per capita GDP ($52,248.98).
  • Per capita spending on patented drugs has steadily declined as a percentage of per capita GDP for the last 8 years, falling from 0.85% in 2004 to 0.70% in 2012.
  • Per capita spending on patented drugs was roughly the same percentage of per capita GDP in 2012 (0.70%) as it was in 2001 (0.69%).
  • According to the Patented Medicine Prices Review Board (PMPRB) - Canada's federal drug price regulator - the prices of patented medicines available in Canada have grown slower than the Consumer Price Index (CPI) in 23 of the last 25 years.
  • An analysis by the PMPRB of drug products matched between comparable countries showed that the prices of patented medicines in Canada have remained below median international prices for the last 12 years from 2001 to 2012.

The study is available for free download from Canadian Health Policy, the online journal of the Canadian Health Policy Institute (CHPI) and can be accessed at the following web link: www.canadianhealthpolicy.com.

About CHPI

Canadian Health Policy Institute (CHPI) is a non-profit think-tank funded by independent research grants and unrestricted operating grants from public sector, private sector and non-profit sector sources. CHPI is dedicated to conducting, publishing and communicating evidence-based socio-economic research on health system performance and health policy issues that are important to Canadians.

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