Public drug plan expenditures increased by 1.9 per cent in 2016-17, reaching a total of $10.7 billion, according to the Patented Medicine Prices Review Board's (PMPRB) CompassRx report. Growth in 2015-2016 was significantly higher at 10.8 per cent.
The following public drug plans were included in the study: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Yukon and Health Canada's Non-Insured Health Benefits Program.
Greater use of higher-cost drugs
The PMPRB says the increase in public plan drug costs in 2016-17 “was driven by a greater use of higher-cost drugs combined with reduced generic savings and a decline in the use of direct-acting antiviral (DAA) drugs for hepatitis C. Higher-cost drugs (other than DAAs) continue to be the most pronounced driver, pushing costs upward by 4.4 per cent in 2016-17.”
The study found that drugs exceeding $10,000 in annual treatment costs grew by 17.2 per cent. “These high-cost medicines were used by less than 2 per cent of public drug plan beneficiaries and accounted for almost 28 per cent of the total drug costs in 2016/17.”
Generic and biosimilar substitutions
Meanwhile, drug cost savings from price reductions and generic and biosimilar substitutions has steadily declined from -9.2 per cent in 2012/13 to -2.8 per cent in 2016/17, following a reduction in the impact of the patent cliff and generic price reforms, says the report.