Trends in public drug program spending in Canada

Public drug program spending accounted for 44% of all prescribed drug spending in Canada in 2021,Reference1 reaching $16.2 billion — a 7.4% increase from 2020 (the highest growth rate since 2018). Public drug program spending differs by jurisdiction due to differences in program design, formulary coverage, prescribing patterns, and the health and demographics of the population.

Percentage of public drug program spending by sex, age and income quintile, by jurisdiction, 2021

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Jurisdiction	N.L.	P.E.I.	N.S.	N.B.	Que.	Ont.	Man.	Sask.	Alta.	B.C.	Y.T.	Canada*
Total program spending (TPS) (millions of dollars)	$167.7	$40.6	$313.8	$294.9	$4,730.1	$7,480.4	$413.7	$482.7	$994.2	$1,246.6	$12.2	$16,176.8
Percentage of TPS on females	54.3%	51.2%	51.8%	51.8%	51.3%	49.8%	52.4%	50.9%	51.9%	50.4%	46.6%	50.6%
Percentage of TPS on seniors	52.2%	56.2%	64.9%	55.2%	65.3%	66.6%	38.9%	38.5%	71.8%	38.4%	58.2%	62.4%
Percentage of TPS on the lowest income quintile (Q1)	30.3%	26.9%	25.6%	30.2%	Not available	26.0%	21.1%	20.7%	20.6%	29.9%	30.2%	25.7%†

Notes
* The Northwest Territories and Nunavut do not currently submit data to NPDUIS. The federal program administered by the First Nations and Inuit Health Branch (FNIHB) has been excluded because data was not available after 2019.
† The Canada percentage of TPS on the lowest income quintile (Q1) excludes data from Quebec.

Source
National Prescription Drug Utilization Information System, 2021, Canadian Institute for Health Information; Banque médicaments, 2021, Régie de l’assurance maladie du Québec.

All jurisdictions in Canada provide public drug coverage for seniors age 65 and older. In 2021, seniors made up 19% of Canada’s population and accounted for 62% of public drug program spending.Reference2 Manitoba, Saskatchewan and British Columbia spent proportionally less on seniors compared with other jurisdictions because they provide more complete drug coverage for other age groups.Reference3

Newfoundland and Labrador and New Brunswick spent proportionally more for individuals in the lowest income quintile. Public drug coverage in these provinces is mainly offered to low-income seniors and covers a population with greater needs, resulting in a higher average number of drug classes per beneficiary.Reference3

Diabetes drugs contributed the most to growth in spending in 2021. Glucagon-like peptide 1 (GLP-1) analogues and sodium–glucose co-transporter 2 (SGLT-2) inhibitors were the first (11.7%) and fifth (6.1%) largest contributors to growth in spending, respectively. Spending for these 2 drug classes grew by nearly $200 million between 2020 and 2021, reaching $620 million. This increase is likely due to increased prevalence of diabetes in CanadaReference4Reference5 and to updated 2020 clinical prescribing guidelines, which expanded recommendations for prescribing SGLT-2 inhibitors.Reference6 Additionally, the GLP-1 analogue Ozempic (semaglutide) was added to several provincial/territorial formularies for adults with type 2 diabetes.Reference7Reference8

Drugs used to treat retinal diseases (antineovascularization agents) were the second largest contributor to growth in public drug program spending. The majority of the spending was on 2 injectable drugs, Eylea (aflibercept) and Lucentis (ranibizumab). Spending for antineovascularization agents grew by $112 million between 2020 and 2021, reaching $863 million. Although this drug class typically sees high growth every year, the large increase in spending for 2021 also relates to a big decline in 2020, when people visited ophthalmologists less for eye examinations and injections due to the COVID-19 pandemic.Reference9

Drugs to treat hepatitis C contributed the most to savings in 2021. Spending on this drug class decreased by $42 million between 2020 and 2021 to $325 million. Expanded coverage of direct-acting oral antivirals, which cure chronic hepatitis C virus (HCV) infections, and harm reduction efforts are associated with decreased HCV infection rates.Reference10 However, less HCV testing and decreased service delivery for sexually transmitted and bloodborne infections have led to fewer new cases being detected during the pandemic, potentially overestimating the savings for this drug class.Reference11Reference12 Additionally, new infections may have occurred because harm reduction services have had decreased capacity during the pandemic.Reference11Reference13

Top 5 drug classes in terms of positive and negative contributions to growth in overall drug program spending, 2021

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Drug class	Most commonly used to treat…	Contribution to growth	Change from 2020 to 2021 (millions of dollars)
A10BJ: Glucagon-like peptide 1 (GLP-1) analogues	Type 2 diabetes	11.7%	$130
S01LA: Antineovascularization agents*	Retinal disease (e.g., age-related macular degeneration)	10.1%	$112
L04AA: Selective immunosuppressants	Inflammatory/autoimmune conditions (e.g., rheumatoid arthritis, Crohn’s disease, psoriasis, multiple sclerosis)	6.9%	$77
L04AC: Interleukin inhibitors	Inflammatory/autoimmune conditions (e.g., rheumatoid arthritis, Crohn’s disease, ulcerative colitis, psoriasis)	6.4%	$71
A10BK: Sodium–glucose co-transporter-2 (SGLT-2) inhibitors	Type 2 diabetes	6.1%	$68
R03AK: Adrenergics in combination with corticosteroids or other drugs, excluding anticholinergics	Asthma and chronic obstructive pulmonary disease (COPD)	-1.2%	-$13
L04AB: Tumour necrosis factor (TNF) alpha inhibitors	Rheumatoid arthritis and Crohn’s disease	-1.5%	-$17
R03AB: Glucocorticoids	Obstructive airway diseases	-1.7%	-$19
L02BX: Other hormone antagonists and related agents	Prostate cancer	-2.1%	-$23
J05AP: Antivirals for treatment of hepatitis C virus	Hepatitis C	-3.8%	-$42

Notes
* Spending on ranibizumab and aflibercept (which accounted for 99.9% of spending on antineovascularization agents) in Nova Scotia, Manitoba and British Columbia, and the majority of this spending in Alberta, is funded through special programs and is not included in NPDUIS.
The Northwest Territories and Nunavut do not currently submit data to NPDUIS. The federal program administered by the First Nations and Inuit Health Branch (FNIHB) has been excluded because data was not available after 2019.

Source
National Prescription Drug Utilization Information System, 2021, Canadian Institute for Health Information; Banque médicaments, 2021, Régie de l’assurance maladie du Québec.

Spending on high-cost chemicalsFootnote i(those with an average cost of $10,000 or more per person per year) continued to account for a large proportion of total public drug program spending in 2021. In total, 14.2% of all chemicals were high cost; they accounted for roughly one-third of total public drug program spending. High-cost drugs are used to treat or manage blood and breast cancers, hepatitis C, autoimmune conditions (such as Crohn’s disease) and retinal diseases (such as age-related macular degeneration), among other conditions.Reference14

In 2021, 43.0% of public drug program spending was for the 2.5% of beneficiaries for whom a public drug program paid $10,000 or more. These beneficiaries can be characterized in 2 ways: those using expensive drugs and those using many different drugs.Reference15 Of these beneficiaries, roughly two-thirds used at least 1 high-cost drug while one-third had claims for 15 or more drug classes.

Biologic drugs, which are derived from living organisms, are structurally more complex and more expensive than traditional pharmaceuticals.Reference16 Spending on biologics continues to increase in Canada, which ranked third among Organisation for Economic Co-operation and Development (OECD) countries for per capita spending on biologics.Reference17 In 2021, biologics accounted for $4.4 billion of public drug program spending (29.4% of total spending) and accounted for 2.3% of claims.

Biosimilar drugs are structurally similar and less expensive versions of the original biologic drug (reference biologic).Reference16 Spending on reference biologics continues to make up the bulk of spending on all biologics. Spending on biosimilars has been increasing as more of them become available and more jurisdictions introduce biosimilar switching initiatives.Footnote iiSpending on biosimilars made up 8.9% of total biologic spending in 2021,Footnote iiian increase from 6.9% in 2020 and 4.5% in 2019. British Columbia (May 2019), Alberta (December 2019) and New Brunswick (April 2021) were the first provinces to introduce biosimilar switching initiatives.Reference18Reference19Reference20 In 2021, these provinces had the largest proportion of biologic spending on biosimilars.

Percentage of spending on reference biologics and biosimilars by jurisdiction, 2021

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Jurisdiction	Reference biologics	Biosimilars
N.L.	79%	21%
P.E.I.	91%	9%
N.S.	87%	13%
N.B.	62%	38%
Que.	80%	20%
Ont.	78%	22%
Man.	88%	12%
Sask.	96%	4%
Alta.	51%	49%
B.C.	36%	64%
Y.T.	79%	21%

Notes
The Northwest Territories and Nunavut do not currently submit data to NPDUIS. The federal program administered by the First Nations and Inuit Health Branch (FNIHB) has been excluded because data was not available after 2019.
Includes biosimilar drugs with 1 or more reference biologics.

Source
National Prescription Drug Utilization Information System, 2021, Canadian Institute for Health Information; Banque médicaments, 2021, Régie de l’assurance maladie du Québec.

Tumour necrosis factor alpha inhibitors (anti-TNFs) are a class of biologic drugs used to treat conditions such as rheumatoid arthritis, ulcerative colitis and Crohn’s disease. For the last 10 years, anti-TNFs have been the drug class with the highest public spending in Canada. In 2021, anti-TNFs accounted for $1.2 billion of public drug program spending (7.4% of total spending). Despite being the most expensive drug class in Canada, spending on anti-TNFs decreased by $16.7 million compared with 2020. The decrease in spending is largely due to the increased uptake of biosimilars and the introduction of new biosimilar products in 2021.

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