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 about 25% above the OECD median. This influences Canadians' access to important prescription drugs and the sustainability of Canada's health care system.
We are working with the provinces and territories to reduce drug costs. As a member of the pan-Canadian Pharmaceutical Alliance, we are combining our buying power with that of the provinces and territories to:
- make prescription drugs more affordable for public drug plans
- lower generic drug prices for all payers
We are also modernizing the way prescription drugs prices are regulated to better protect Canadian consumers from high prices for patented drugs.
In consultation with stakeholders and the public, we will strengthen the Patented Medicines Regulations under the Patent Act.
The Patented Medicine Prices Review Board will reform the guidelines it uses to implement the act and its regulations.
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