The pace of prescription drug spending under public drug insurance plans accelerated during the 2021-2022 fiscal year, according to the CompasRx report published in December 2023 by the Patented Medicine Prices Review Board (PMPRB). 

Prescription drug spending under public drug insurance plans increased by 6.8% at the end of the 2021-2022 fiscal year. The total annual spending reached $13.2 billion during the year. This compares with compound annual growth of 4.9% over the past five years. 

This data comes from the National Prescription Drug Utilization Information System (NPDUIS) research initiative and covers the 2021-2022 fiscal year. Prescription drug expenses include medication costs (83%) and prescription dispensing costs (17%). 

Several public plans represented 

Members of the NPDUIS advisory committee include representatives from the public drug insurance plans of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, and Yukon. 

Observers at the NPDUIS include Quebec’s ministry of health and social services and the Pan-Canadian Pharmaceutical Alliance (PCPA). 

Rising prices  

The 10 highest-cost drugs reimbursed by public drug plans in Canada are intended to treat rare diseases, according to the PMPRB. These drugs cost more than $250,000 per year per patient.

The report points out that increased use of high-cost drugs remains "the most significant cost driver in 2021-2022". These drugs accounted for an 8.1% increase in drug costs.

By the report's definition, high-cost drugs are those with an average annual treatment cost exceeding $10,000. This category of medications grew by 10% at the end of the 2021-2022 fiscal year. The cost of these drugs totaled $3.3 billion in 2021-2022. 

The impact of patented drugs was partly offset by substitution with less expensive generics or biosimilars. The CompasRX report explains that, despite the loss of patents on a few major drugs, patented drugs maintained around 50% of the total costs. 

The authors of the report explain this stability by "the increased use of high-cost drugs, such as biologics and oral oncology drugs, and the introduction of new drugs with high utilization, such as anti-diabetics.

New treatments for diabetes  

The class of drugs for the digestive system and metabolism, mainly comprising diabetes medications, represents the second-largest cost portion, according to the PMPRB. Their share of drug costs increased from 12.4% in 2018-2019 to 15.4% in 2021-2022. 

The PMPRB largely attributes this increase to the introduction of new anti-diabetic drugs. Novo Nordisk's diabetes treatment, Ozempic, garnered significant attention for its expanded use in the treatment of excessive weight. 

A Small Number Bears High Costs 

In 2021-2022, high-cost drugs (over $10,000) were used by 3% of beneficiaries but represented 36.8% of drug costs. 

Also for 2021-2022, the report reveals that 7.5% of public drug plan beneficiaries accounted for more than 60% of total drug costs.

It is noted that 31 new high-cost drugs appeared in the last five years, increasing their number from 103 in 2016-2017 to 144 in 2021-2022.