There has been much talk about national pharmacare these past few years, but there has also been a lot of misinformation spread about the cost of drugs within our crumbling healthcare system. Let’s set the record straight. Looking at the Canadian Institute for Health Information’s (CIHI’s) 2015 data:
1. Over the last 10 years, total public spending on healthcare in Canada increased by $56.7 billion to a total of $155 billion across the country. This is a compounded annual growth rate (CAGR) of 4.7% – 2 to 4 times the rate of consumer inflation in any one of those years (10-yr CAGR 1.6%).
2. All categories of healthcare spending increased over the last 10 years but each category grew at different rates as follows, with physician payments growing the fastest and drug spending growing the slowest:
a) Hospital spending grew by $21.4 billion to $58.5B with a CAGR of 4.7%
b) Physician spending grew by $15.2 billion to $33.5B with a CAGR of 6.2%
c) Other institutions spending grew by $5.4 billion to $16.4B with a CAGR of 4.0%
d) Public health spending grew by $4.2 billion to $12.1B with a CAGR of 4.4%
e) Drug spending grew by $3.7 billion to $12.6B with a CAGR of 3.5%
f) All other health grew by $3.8 billion to $21.9B with a CAGR of 3.8%
3. Over the last decade, drugs accounted for 9.1% of government health spending in 2005 and in 2015 this had dropped to 8% – while other categories have grown to account for a larger share of government health budgets.
4. Government spending on drugs in the last 5 years has dropped to a CAGR of 1.4% which was less than the CPI CAGR of 1.5% for the same period.
5. Within those same CIHI figures, the number 1 driver for the increase in drug spending is the increased utilization of drugs to treat patients rather than price, which has actually declined slightly.
Canadians do not want governments to give us a cost containment pharmacare drug plan but one that publicly pays for all the drugs that Canadians need when they need them.
D. Wayne Taylor, PhD, recently retired from McMaster University, serves as the Executive Director of The Cameron Institute, a not-for-profit think tank specializing in health, economic, and social issues.