Patented Conseil d’examen Medicine Prices du prix des médicaments Review Board brevetés npduis Pharmaceutical Trends Overview Report Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, and First Nations and Inuit Health Branch of Health Canada 1997-1998 to 2003-2004 National Prescription Drug npduis Utilization Information System Analytical Study Series June 2006 Ce document est également disponible en français sous le titre “Rapport sommaire sur les tendances des prix des médicaments” For a print copy of this report, please contact: The Patented Medicine Prices Review Board Standard Life Centre Box L40 333 Laurier Avenue West Suite 1400 Ottawa, Ontario K1P 1C1 Tel.: 1-877-861-2350 (613) 952-7360 Fax: (613) 952-7626 TTY: (613) 957-4373 E-mail: [email protected] This publication is also available on the PMPRB Web site at: http://www.pmprb-cepmb.gc.ca Pharmaceutical Trends Overview Report ISBN: 0-662-49065-7 Cat. no.: H81-1/2-2006 Acknowledgements The Pharmaceutical Trends Overview Report was prepared by the Patented Medicine Prices Review Board (PMPRB) under the provisions and conditions of the National Prescription Drug Utilization Information System. This report was produced with the assistance of the NPDUIS Steering Committee. The contribution of individual members of the Steering Committee was invaluable. The NPDUIS Steering Committee members of this report are: Kevin Wilson Marilyn Thornton NPDUIS Steering Committee Chair Assistant Director and Executive Director Pharmaceutical Policy and Programs Branch Drug Plan and Extended Benefits Branch Alberta Health and Wellness Saskatchewan Health Brett Wilmer Colleen Janes Senior Economist Director Policy and Program Analysis Pharmaceutical Services British Columbia Ministry of Health Services Newfoundland and Labrador Department of Health and Community Services Dianne Tait Manager Patrick Crawford Extended Benefits and Pharmaceutical Pharmacy Services Consultant Program Acute and Continuing Care Yukon Health Services Prince Edward Island Health and Social Services Georges Nadon Pharmaceutical Consultant John Hoar Benefits Management Pharmaceutical Economist First Nations Non-Insured Health Benefits Pharmaceutical Services Nova Scotia Department of Health Wayne Lepine Manager James Ayles Pharmaceutical Policy Health Information Consultant Quality Care, Technology and Pharmaceuticals Medicare / Prescription Drug Program Division New Brunswick Health and Wellness Health Canada Brent Fraser Michael Hunt A/Associate Director Manager, Pharmaceuticals Pharmaceutical Services Coordination Unit Canadian Institute for Health Information Ontario Ministry of Health and Long Term Care Paul De Civita A / Director Deborah Malazdrewicz Policy & Economic Analysis Branch Manager Patented Medicine Prices Review Board Health Information Management, Finance Division Manitoba Health The PMPRB appreciates the staff contribution of the members of the NPDUIS Steering Committee. As well, the PMPRB recognizes the extensive work effort that was put into this report by the PMPRB research team of the Policy and Economic Analysis Branch, Informatics Branch, the editors, desktop publishing unit, and translators. Pharmaceutical Trends Overview Report i Table of Contents Executive Summary . .2 1 – Introduction . .10 1.1 – Background . .10 2 – Overview of Report . .11 3 – Health and Drug Expenditures in Canada . .12 3.1 – Overview . .12 3.2 – Public Sector Spending on Drugs . .16 4 – Public Drug Plan Expenditures . .18 4.1 – Growth of Drug Expenditures . .18 4.2 – Benchmark Comparisons of Drug Expenditures . .19 4.3 – Eligible Beneficiary and Claimant Analysis . .20 5 – Drug Costs and Prescription Transactions . .22 5.1 – Percentage Increases in Drug Costs . .22 5.2 – Drug Costs by Market Segment Analysis . .23 5.3 – Drug Costs by Top Anatomical Therapeutic Chemical Classification . .24 5.4 – Drug Costs by Top Individual drugs . .26 5.5 – Prescription Transactions by Top Anatomical Therapeutic Chemical Classification . .27 6 – Price and Quantity Analysis . .29 6.1 – Price and Quantity Indices . .29 6.2 – Distribution Analysis . .32 7 – Defined Daily Dose Analysis . .34 7.1 – Drugs for Acid-Related Disorders . .35 7.2 – Serum Lipid Reducing Agents . .36 7.3 – Psychoanaleptics . .37 7.4 – Agents acting on Renin-Angiotensin System . .38 7.5 – Number of DDDs per Day per 1,000 Claimants – NIHB Drug Plan . .39 Results by Jurisdiction . .40 ALBERTA . .40 SASKATCHEWAN . .50 MANITOBA . .60 ii Pharmaceutical Trends Overview Report ONTARIO . .71 NEW BRUNSWICK . .82 NOVA SCOTIA . .93 NON-INSURED HEALTH BENEFITS . .104 Appendix 1 . .114 1 – Concepts, Definitions, and Methodologies . .114 1.1 – Categorical Structure of Analysis . .114 1.1.1 – Segmentation of Pharmaceutical Market . .114 1.1.2 – Therapeutic Classification . .116 1.1.3 – Defined Daily Doses . .116 1.1.4 – Prescription Transactions . .116 1.1.5 – Individual Drug or Ingredient Level . .117 1.1.6 – Unit of Analysis: . .117 1.1.7 – Types of Drug Expenditures . .117 1.2 – Ranking of Top ATC Groups and Individual Drugs . .118 1.3 – Price and Quantity Analysis . .118 1.3.1 – Price and Quantity Indices . .118 1.3.2 – Distribution of Price Change and Price Ratios . .119 1.4 – Decomposition using Defined Daily Dose (DDD) . .119 Appendix 2 – Data Sources and Limitations . .121 2.1 – Data Sources . .121 2.2 – Data Limitations . .122 Appendix 3 – Population . .124 Appendix 4 – Number of Eligible Beneficiaries and Claimants . .128 Appendix 5 – Provincial and National Gross Domestic Products . .129 Appendix 6 – Provincial and Territorial Budgets . .130 Appendix 7 – Anatomical Therapeutic Chemical Classification . .131 Appendix 8 – Glossary . .133 Appendix 9 – Summary Description of Provincial and Territorial Drug Plans . .136 Pharmaceutical Trends Overview Report 1 Executive Summary Background Drugs are an essential component of the health care system and an integral aspect of the health status of Canadians. In Canada, pharmaceutical sales are forecasted to have reached $21.8 billion in 2004, accounting for 16.7% of health expenditures. Drug expen- ditures have increased at a faster rate than total health expenditures, making it the second largest component, following hospital expenditures. As a source of funding, an increasing share of drug expenditures is being carried by the public system; the public share of drug expenditures increased from 31.6% in 1997 to 37.3% in 2002. For 2004, the public share of drug expenditures is expected to have increased further to 39.0%.1,2 There is a great need to better understand why drug expenditures are increasing; thereby enabling decision makers to allocate limited resources more efficiently and to better plan and provide services. The Patented Medicine Prices Review Board previously produced “Cost Driver” reports that examined trends in pharmaceutical expenditures up to the fiscal year 1999-2000, using data from five provincial drug plans. The Pharmaceutical Trends Overview Report (PTOR) examines spending on drugs utilizing the data from seven public drug plans that include six provinces and the Non-Insured Health Benefits (NIHB) drug program of the First Nations and Inuit Health Branch of Health Canada. The six participating provinces are Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick and Nova Scotia. Seven years of data, 1997-1998 to 2003-2004, were submitted for all jurisdictions with the exception of Manitoba and NIHB drug program which submitted four and five years of data respec- tively. While recognizing that public drug plans differ in their coverage, beneficiaries, types of benefits and adjudication processes, this study provides analysis across all of the jurisdictions’ drug plans for which data were submitted. 1 Canadian Institute for Health Information (CIHI), Drug Expenditure in Canada, 1985 to 2004. 2 Canadian Institute for Health Information (CIHI), National Health Expenditure Trends, 1975 to 2004 2 Pharmaceutical Trends Overview Report This research has been carried out as part of the National Prescription Drug Utilization Information System (NPDUIS), whose purpose is to provide Canada’s health system with comprehensive information on the utilization and costs associated with pharmaceuticals. Highlights • Drug costs increased in all jurisdictions, ranging from 32.0% in Nova Scotia to 66.6% in Manitoba over the 2000-2001 to 2003-2004. • More than 75% of drug costs were spent on Brand Name drugs whose expenditures grew faster than Generic drugs in most jurisdictions. • Across all jurisdictions, significant contributors to the growth in expenditures included the following therapeutic groups: - Drugs for acid-related disorders, i.e. proton pump inhibitors - Serum lipid reducing agents, i.e. “statin” group of drugs - Psychoanaleptics i.e. antidepressants and anti-dementia drugs - Agents acting on the renin-angiotensin system i.e. ACE inhibitors • Individual drugs, such as Lipitor (“statin” drug) and Altace (ACE-inhibitor drug), contributed anywhere from 2.3% to 13.3% to the increase in expenditures. • The growth in expenditures was largely affected by increases in utilization – not price inflation. • The effect of “switching” from lower-priced.