Pharmaceuticals are bankrupting Canada, too

Thursday, September 02, 2010 by: David Gutierrez, staff writer
Tags: medicine, Canada, health news

(NaturalNews) The Canadian health system is under massive strain from ballooning drug spending, notes Toronto Star business columnist David Olive.

"Drugs are the second-largest driver of the stunning increase in healthcare costs, after hospitals," Olive writes. He notes that between 1975 and 2008, drug costs soared from 8.8 percent of national health spending to 17.4 percent. In the same time period, hospital spending dropped from 45 percent of the total to 28 percent.

"Spending on pharmaceuticals has more than doubled over the past 10 years, outpacing growth in health spending by hospitals, physicians and other health professions," says Michael Hunt, manager of pharmaceutical programs at the Canadian Institute for Health Information.

In Ontario specifically, prescription drug prices are so much higher than in Europe that Premier Dalton McGuinty has proposed cutting drug company reimbursements by 50 percent. Combined with an increase in pharmacists fees, this plan could save the province half a billion dollars every year.

Drugs are such a lucrative business that the recession has left them nearly untouched, Olive notes. Even as prices of other consumer products plummeted, Canadian drug spending increased 16.5 percent over the past two years. In 2008, the average Canadian spent a whopping $897 on drugs alone.

Part of the problem, Olive notes, may be that drugs in Canada are so easy to find; the country has 56 percent more drug stores per capita than even the drug-happy United States.

"There are few easier ways to maximize a store's sales-per-square foot than by installing a small but lucrative drug counter," Olive says. "And in this business, supply drives demand. ... How often have you gone to Metro for meat and emerged with 24 caplets of Extra Strength Tylenol?"

Impulse purchases of drugs are such a lucrative market that a company called Pharma Trust Inc. has started making drug vending machines.

"Finally, it's time we took more control of our health," Olive writes. "[And] nothing beats fitness, proper diet ... and proper sleep."

Sources for this story include: http://www.thestar.com/business/article/7966....