Steve Morgan, Ph.D.
S. Morgan, "Drug Spending in Canada: Recent Trends and Causes," Medical Care, July 2004 42(7):635–42.
Canadians' spending on prescription drugs totaled an estimated $16 billion, or $500 per capita, in 2003, and it was growing by 10 percent per year—the world's highest rate. In this article, based on a Commonwealth Fund–supported study, the author explores the effects of price changes, therapeutic choices, and volume of drug utilization on the country's elevated rate of drug cost growth.
Canada's efforts to control drug prices, including federal price regulations, provincial price freezes, and generic-substitution policies, were successful, but they were offset by increased drug utilization and changes in therapeutic choices, which were largely responsible for the increased spending on drugs. These results, say the author, illustrate "the potential pitfalls of cost-management strategies that focus primarily on price regulation."