In 2010, Rx drugs account for smallest proportion of Canadian health spending growth

New medicines are often blamed for being a major health cost driver in Canada but the reality is that they account for a relatively small proportion of health care spending growth. But they bring value by reducing hospitalizations, preventing disease, and allowing people to live longer within their own homes. In the future, as the promise of more medical innovation is fulfilled, more health spending should be on medicines and vaccines that reduce the need for hospitalizations and other more costly services.

In 2010, total health care spending in Canada (private and public) is projected to increase by $9.53 billion over 2009 spending. Increased spending on hospitals and other institutions accounts for over $4 billion or 43.2% of that increase. Growth in spending for physician services accounted for 17.7 % of the increase. Spending on dentists, vision services and other health professionals contributed 15.8 % of the year over year increase. Prescription drugs contributed just 12.1 % to the 2009 to 2010 health spending increase.

Data Source: Canadian Institute for Health Information, 2010 National Health Expenditure Trends 1975-2010