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Public Drug Spending Increases

Spending by Canadian public drug plans increased by an average of two per cent in 2013/14, reversing a multi-year trend of low or negative growth, says the Patented Medicine Prices Review Board. The second edition of ‘CompassRx,’ its annual report that monitors major developments in drug pricing and reimbursement in Canada, says this was due to a surge in the use of higher-cost drugs, such as biologics, and a substantial reduction in savings from the use of lower-priced generic versions of brand-name drugs. As anticipated in last year's report, these findings suggest that the ‘patent cliff’ era of recent years, which saw public drug plans benefit from many top-selling ‘blockbuster’ brand-name drugs of the past decade reaching the end of their patent terms and facing generic competition for the first time, has run its course. Of the few remaining blockbuster drugs on the Canadian market, none lost patent protection in 2013/14. In addition to increased spending on high-cost drugs, in recent years most public drug plans have been spending more on dispensing costs, which grew by 5.9 per cent or $122.2 million in 2013/14 and accounted over time for a greater share (22.3 per cent) of overall public drug plan spending on prescription drugs. Canadian public drug plans reimbursed their active beneficiaries for 78.7 per cent of overall drug expenditures in 2013/14, totaling $9.8 billion. This included $7.3 billion in drug costs, $2.2 billion in pharmacy dispensing costs, and $300,000 billion in markups. The report covers public drug plans in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, and Health Canada's non-insured health benefits drug plan.

Courtesy of Benefits and Pensions Monitor website News Alerts 


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