Prescription drug pricing and costs

In recent years, drug spending has accounted for an increasingly large proportion of expenditures in the Canadian health care system, with expenditures growing faster than any other component of health care. Expenditures on drugs have surpassed spending on physician remuneration to become the second largest cost in the health care system, after hospitals. The main drivers behind these increased expenditures are:

  • an increase in the overall use of prescription drugs; and
  • the use of newer and more costly prescription drugs

Canada's drug prices are now the third highest among the Organisation for Economic Co-operation and Development (OECD) countries - that is 22% above the OECD median. This influences Canadians' access to important prescription drugs and the sustainability of Canada's health care system. To better protect Canadians, the federal government is taking steps to modernize the way patented drug prices are regulated in Canada by amending the Patented Medicines Regulations.

The proposed amendments will:

  • Update the list of countries the Patented Medicine Prices Review Board (PMPRB) uses to make price comparisons when setting price ceilings to include countries that are closer to Canada in their consumer protection measures, economic standing and pharmaceutical markets
  • Allow the PMPRB to see what actual prices are being paid
  • Introduce new factors that take into account the value of a drug and its impact on health budgets

The proposed amendments can be found at Canada Gazette.

For more information

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