Drugs taking bigger bite of health care pie

Pharmaceuticals account for the fastest growing component of health care costs in Canada, with average growth rates that are 3 times the annual rate of inflation. The Patented Medical Prices Review Board (PMPRB) says the growth is caused primarily by increased use and rapid uptake of new therapies.

Sales of patented drugs for human use totalled $6.3 billion in 2000, a 16.7% increase over 1999. In 2000 these sales represented 63% of all drug expenditures for human use. Between 1995 and 1998, sales of patented drugs for both human and veterinary use, as a proportion of total drug sales, increased from 43.9% to 55.1% of total spending.

The PMPRB was created by the federal government to ensure that patent holders do not charge excessive prices during the period of patent protection. In every year since 1998 (except 1992), price increases for patented drugs have been less than increases in the Consumer Price Index (CPI). In 2000, the CPI increased by 2.7%; according to a price index developed by the PMPRB, prices for patented drugs rose by 0.4% during the same period.

Canada continues to have lower prices for patented drugs than many other industrialized countries. In 2000, prices in Sweden, Germany, the United Kingdom, Switzerland and the United States were all higher than in Canada, while prices in France and Italy were lower.

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