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Related Experiment Videos

Drug spending in Canada: recent trends and causes.

Steve Morgan1

  • 1Department of Health Care and Epidemiology, University of British Columbia, Vancouver, Canada. morgan@chspr.ubc.ca

Medical Care
|June 24, 2004
PubMed
Summary
This summary is machine-generated.

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Canadian prescription drug spending increased significantly from 1998-2002, driven by higher drug use and changing therapeutic choices, not price increases. Cost-management strategies should address utilization and choices.

Area of Science:

  • Health Economics
  • Pharmaceutical Policy
  • Public Health

Background:

  • Canadians spent nearly $15 billion on prescription drugs in 2002, averaging over $460 per capita.
  • Limited published evidence exists on the drivers of these substantial prescription drug expenditures.
  • This study addresses the lack of data on the nature and causes of drug spending in Canada.

Purpose of the Study:

  • To analyze the nature and determinants of prescription drug expenditures in Canada.
  • To investigate the period of rapid expenditure inflation from 1998 to 2002.
  • To identify key factors influencing rising drug costs.

Main Methods:

  • Utilized nonstochastic index-theoretical methods to decompose expenditure trends.
  • Analyzed overall expenditures and investment in specific therapeutic categories.

Related Experiment Videos

  • Attributed changes in per capita spending on oral solid prescription drugs to six determinants across volume, price, and therapeutic choices.
  • Main Results:

    • Spending was concentrated in five main therapeutic classes.
    • Drug prices, adjusted for generic use, decreased during the study period.
    • Increased prescription drug utilization accounted for over half of the per capita spending growth; therapeutic choices also contributed to rising costs.

    Conclusions:

    • Federal price regulations, provincial price freezes, and generic substitution policies effectively controlled price-related drug spending.
    • Increased drug utilization and shifts in therapeutic choices present challenges for cost-management strategies.
    • Future cost-management must consider factors beyond price, including utilization and prescribing patterns.