Increased use of higher-cost medicines continues to put pressure on Canadian public drug plans

A new Patented Medicine Prices Review Board (PMPRB) report finds that prescription drug expenditures by Canadian public drug plans increased by 3.7% in 2019-20, bringing annual spending to $12.5 billion. The use of higher-cost medicines has been the primary factor behind rising costs for the public plans over the past five years, and this pressure continues to build.

For the first time in the report’s history, the 10 highest-cost drugs reimbursed by the public drug plans were all rare disease treatments with annual treatment costs of over $100,000. As a result, nearly 60% of overall drug costs for the public plans in 2019-20 were spent on just 5% of beneficiaries.

These findings were released today by the PMPRB in the seventh edition of CompassRx, an annual report published under the National Prescription Drug Utilization Information System (NPDUIS) research initiative. CompassRx provides insight into the factors driving prescription drug expenditures in select Canadian public drug plans. This edition focuses on the 2019-20 fiscal year.

The study includes all provincial public drug plans (with the exception of Quebec), as well as Yukon and the Non-Insured Health Benefits Program. These plans account for approximately one third of the total annual spending on prescription drugs in Canada.

Quick facts

• Between 2014-15 and 2019-20, total prescription drug expenditures for Canada’s public drug plans rose by $3.1 billion, for a compound annual growth rate of 5.5%.
• Drug costs in NPDUIS public plans grew by 4.3% in 2019-20, accounting for $10.1 billion of a total $12.5 billion in public drug plan expenditures, while dispensing costs grew by 1.4%. 
• The increased use of higher-cost medicines exerted an upward pressure on drug costs of 5.8% in 2019-20. Declining use of direct-acting antiviral (DAA) drugs for hepatitis C pulled costs down by 1.6%.
• New restrictions to coverage in Ontario’s OHIP+ program pulled drug costs down by 5.0% in Ontario and 3.0% across all jurisdictions. Program spending decreased from $658 million in 2018-19 to $313 million in 2019-20.