Is Canada spending its drug budget wisely?

A new study looks at the benefits we get for the billions we spend on meds

By Susan Usher

The 145-page doorstop tracks changes in spending on prescription and non-prescription drugs and provides a breakdown of who's paying for these meds. This year's numbers show how Canada's drug spending stacks up against other developed countries. But what these numbers don't do is tell us anything about what this ever-growing amount of money is buying for Canadians. It's a question that's begging to be answered.

Mr Michael Hunt, Manager of Pharmaceutical Programs at CIHI, thinks this year's numbers show Canada's swelling drug expenses are quite comparable to other countries with respect to both per capita spending and the proportion of public spending. "Growing pharmaceutical budgets are not something we're facing alone," he says.

CRUNCHING THE NUMBERS
Spending on drugs increased by 8.8% from 2003 to 2004 in Canada. Prescribed drugs made up $14.8 million of the $18.4 million total national drug bill for 2002, with per capita spending ranging from $373 in BC to $523 in Quebec. Here's the breakdown: 34% of prescribed drugs are paid for by private insurers, 20% by households and 46% by governments, Workmen's Compensation Boards or the Quebec Insurance Fund. The proportion of prescriptions financed by the public purse ranged from a low of 33.5% in NB to a high of 50.6% in BC.

While growth in spending is slower this year than it's been since 1997, it continues a trend of high growth that has persisted since the 1980s. Total drug expenditure grew at a rate of 12.2% a year between 1985 and 1992, 6% a year between 1992 and 1997, and 10% a year between 1997 and 2002. And the increase is clearly attributable to the use of more drugs and more expensive newer drugs, as prices of existing drugs have been stable for over a decade.

Rx SEA CHANGE
Mr Steve Morgan, assistant professor at the Centre for Health Services and Policy Research at UBC and a CIHI advisor, sees this data as evidence of a major shift in where our healthcare dollars go. Drugs now make up over 16% of total health expenditure Canada-wide, (physicians only take up 12.9% while hospitals eat up 29.9%). "Fifteen years ago," says Mr Morgan, "$500 was considered the cutoff for catastrophic drug benefits in BC, meaning if you spent that much money on medicines, you were considered extremely ill. Now it's not far from the Canadian average."

WHERE DID IT ALL GO?
The $18 billion question CIHI can't answer is whether we're getting our money's worth on drugs. "The CIHI report is not designed to tell us whether we're getting value for money," says Mr Morgan. "It doesn't say who's getting access to medicines, nor anything about outcomes."

Now, a push is on to find out what this money is buying for Canadians. "Knowing what we're actually getting for our money is an absolute priority," says Mr Hunt. CIHI has a project underway with the Patented Medicines Pricing Review Board (PMPRB), funded by Health Canada, to create a National Prescription Drug Utilization Information System (NPDUIS) based on provinces' claims databases. "It will put some meat to the expenditure numbers," says Mr Hunt.

There are plans in the works to soon make CIHI a central repository for claims data. "We'll be able to track which drugs we're spending on, and how much we're spending on them," says Mr Hunt. It will still not tell what outcomes are bought with that drug spending, though there are plans for an NPDUIS expansion to provide linkages to other databases, according to Mr Hunt.

Some provinces already have pretty decent drug expenditure data systems in place — namely BC, Quebec, Ontario and most especially Manitoba .

A BETTER WAY?
A recent study by Anita Kozyrsky from the Manitoba Centre for Health Policy provides a glimpse of the kind of question such a database could answer. Her report High-cost Users of Pharmaceuticals: Who Are They? published in March 2005 looks at what drug categories account for higher prescription costs and whether disease prevalence corresponds to higher costs. "Ms Kozyrsky's study is the essence of linkable data," says Mr Hunt. "The Manitoba database allows researchers to look at disease states as well as drug utilization and cost."

She found that people with the highest costs had chronic conditions, and that intermittent high-cost users had diseases like multiple sclerosis which require shorter term but expensive therapies. It's the kind of study that might reassure the provincial ministers responsible for healthcare budgets that drug spending, if high, is justified.