Healthy Skepticism Library item: 3912

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Publication type: news

Prescription drug purchases by Canadian hospitals and pharmacies reach $16.57 billion in 2005
IMS Health Canada 2006 Mar 15
http://www.imshealthcanada.com/htmen/1_0_26.htm

Notes:

Ralph Faggotter Comments:

Fro a detailed analysis of Canada’s pharmaceutical spending for 2005, see this report.

Sales are influenced by the disparity in the price of drugs between Canada and the USA.
i.e. many Americans go pharmacy shopping over the border!

Full text:

WHAT’S NEW

Prescription drug purchases by Canadian hospitals and pharmacies reach $16.57 billion in 2005

Montreal, Quebec, March 15, 2006 – IMS Health, the world’s leading provider of market intelligence to pharmaceutical and health-care stakeholders reports prescription drug purchases by Canadian hospitals and retail pharmacies were $16.57 billion in 2005, up 7.3% from 2004.

Purchases by retail pharmacies were $14.65 billion in 2005 and represented almost 90% of total drug purchases last year. Pharmacy purchases were up 6.4% in 2005, representing the lowest increase since 1996 (see Table 1).

“Although the retail pharmacy sector posted a respectable growth in 2005,” says Ian Therriault, IMS Health’s senior industry expert, “the slower growth has been caused by new competition faced by several brand-name drugs facing generic competitors, additional cost-containment measures put in place by governments, fewer top-selling products being introduced and lingering safety concerns around some of Canada’s most prescribed classes.”

Purchases of generic drugs by retail pharmacies grew about 13.8% in 2005, almost three times faster than the growth of brand-name purchases, which was 4.9%. Brand products accounted for $12 billion of purchases by retail pharmacies in 2005 while generic drugs accounted for $2.64 billion, representing 18% of purchases.

Nine brand-name drugs faced generic competition for the first time in 2005, with the biggest selling being antibiotic Zithromax® (azithromycin). Zithromax purchases grew to $55.6 million at the end of 2005. Following their introduction in November 2005, purchases for generic versions of azithromycin totaled $1.28 million. Other brand-name drugs which faced generic competition for the first time in 2005 were the anti-depressant Wellbutrin® (bupropion), Topamax® (topiramate) – used to treat epilepsy and prevent migraines, and Imitrex® (sumatriptan), which is used to relieve migraine attacks.

Generic drugs represented 43% of all prescriptions filled by Canadians and were responsible for all of the growth in the number of dispensed prescriptions in 2005 (Table 9). Brand manufacturers’ share of the growth in the number prescriptions dispensed last year went down 0.2%. That is, while prescriptions for some brand-name products increased, prescriptions for brand-name products as a group went down.

Also contributing to a slowed growth in the Canadian market was the lack of penetration of new drugs. “Looking at the combined value of new brand-name medications (new molecular entities and line extensions) launched in Canada, products launched in 2005 accounted for only 0.26% of all purchases by pharmacies and hospitals that year. This is the smallest share of new products as a percentage of total spending for each of the last five years,” says Mr. Therriault. “This can be explained in part by fewer new brand-name products being fully or partially paid for by provincial governments coupled with an increase in the average time taken by provinces to list a new product on their formularies. Average time-to-listing went from 19 months in 2000 to 27 months in 2005.”

In trying to understand the retail pharmacy sector in 2005, one cannot overlook the importance of safety concerns regarding some of Canada’s leading prescribed classes. “Prescriptions for COX-2 Inhibitors, major tranquilizers, selective serotonin reuptake inhibitor (SSRIs) and hormone replacement therapy collectively fell by 8% in 2005. Canadians filled about 396 million prescriptions at their retail pharmacies in 2005, up 3.7 % from 2004,” says Gary Fabian, vice-president of Public Affairs and Government Relations at IMS. “Isolating these four classes, prescriptions for all other classes were up almost 5%.”

In 2005, pharmacists dispensed an average of 12 prescriptions per person at an average retail price of $564 per person (includes new and refills; see Tables 3 and 4). Canadians aged 80 and over averaged 73 prescriptions per person, with those aged 60 to 79 averaging 35 prescriptions per person. Those aged 40-59 averaged 15 prescriptions per person and those aged 39 and under averaged less than six prescriptions per person. The average retail price per prescription last year was $46.

Leading prescribed classes
As has been the case for the last 15 years, cardiovasculars remained Canada’s most prescribed class, up 5.8% in 2005 (Table 5; see Table 14 for definitions of classes). High blood pressure remained the single biggest reason Canadians visited their physician last year. Psychotherapeutics, the second most prescribed class, increased 4.2%, with depression being the second leading reason Canadians visited their physician in 2005. The diagnoses most likely to result in drug treatment were hypertension, depression, high cholesterol and eczema (see Table 8).

Of top 10 most prescribed therapeutic classes, cholesterol-lowering agents once again showed the highest growth over the previous year, increasing by 10.2%. Lipitor®, a cholesterol-lowering agent, was the country’s most prescribed medication in 2005 with 11.2 million prescriptions dispensed (Table 6). Lipitor was also the top selling drug in Canada with hospital and retail pharmacy purchases of almost $1 billion. Lipitor remained the world’s top selling drug with hospital and retail pharmacy purchases of sales of $12.9 billion U.S.

Diabetes therapy recorded the second-fastest growth rate among Canada’s leading prescribed classes with prescriptions up 8% over 2004. Hormones, the third most prescribed class in Canada, was the only class of Canada’s leading classes to experience a drop last year. Prescriptions for the hormones estrogen and progestin products have fallen considerably following the results of the Women’s Health Initiative study released in 2002 that found long-term use of combined hormone replacement therapy increases a woman’s risk for heart disease and breast cancer.
Anti-arthritics, the eighth leading prescribed class in 2004, has now slipped to number 12. The voluntary withdrawal by Merck Frosst of the COX-2 Vioxx® on September 30, 2004, followed by the withdrawal of another COX-2 in April 2005 (Bextra®), raised safety concerns around all COX-2s. Prescriptions for COX-2s were cut by half to 3.5 million in 2005. Purchases by hospitals and pharmacies of COX-2s went from about $350 million in 2004 to $152 million in 2005.

Leading companies
Pfizer remained Canada’s leading pharmaceutical company with almost $2.25 billion in sales to retail pharmacies and hospitals (see Table 10). AstraZeneca was second with $1.12 billion. The ten largest pharmaceutical companies in Canada accounted for nearly 57% of sales in 2005 and collectively grew by 5.1%, a rate slower than the growth of total purchases (7.3%) and half the rate of the smaller companies ranked 11 to 20.

Fifth-ranked generic manufacturer Apotex is this country’s top-ranking generic company with sales of $948 million, an increase of 21% over 2004. While continuing to feel the effects of the withdrawal of Vioxx® from the market, Merck Frosst, Canada’s eighth largest company, saw its sales into pharmacies and hospitals fall 15.5% in 2005.

Leading brand medications launched in 2005
There were 21 new molecular entities launched in Canada last year, excluding line extensions and generic versions of brand-name drugs (11 of the 21 new medications were approved in 2005; the remainder had been approved in previous years.) Table 13 ranks the leading medications launched in 2005 by sales into Canadian hospitals and retail pharmacies (wholesale dollars). The selective norepinephrine reuptake inhibitor Strattera®, used to treat Attention Deficit Hyperactivity Disorder (ADHD), was the top-selling new drug of 2005 with sales of over $11.8 million, followed by the anti-depressant Cipralex® with $9.4 million. Cancer medication Velcade® was the third leading new product with sales of $5 million.

Hospital Purchases
Sales into hospitals grew by 14.5% or $244 million, growing at more than double the rate of purchases by retail pharmacies last year. Hospitals account for almost $2 billion of drug spending (see Table 1). “Oncology medications and vaccines were responsible for most of the hospital sector’s growth,” says Mr. Therriault.

Purchases by cross-border internet pharmacies fall by one-third in 2005
In 2005, purchases of drugs by Canadian internet pharmacies – pharmacies that are known to sell prescription medicines to U.S. customers through the internet – fell to $425 million, compared to $595 million in 2004. In 2003 sales into cross-border internet pharmacies more than doubled over 2002. (The figures measure the purchases made by internet pharmacies at wholesale Canadian prices and exclude foot traffic, i.e., U.S. residents crossing the border to purchase medications in Canadian pharmacies.) Internet pharmacies in Manitoba accounted for 37.1% of prescription drug purchases by Canadian internet pharmacies (see Tables 11 and 12).

IMS Health estimates cross-border sales into internet pharmacies decreased between 5% and 16% in each quarter since the beginning of 2004. According to Mark Maciw, IMS Health’s Group Director of Trade Relations, the drop in sales was primarily due to measures put in place by several brand-name pharmaceutical manufacturers to restrict the supply of drugs to pharmacies selling into the U.S. and to the rising Canadian dollar which has made purchasing Canadian drugs less advantageous for Americans. “Also, generic medications now make up about half of the value of drugs sold through cross-border internet pharmacies; because generics are priced lower than brand-name products, they have decreased overall sales.” Mr. Maciw adds that a new drug prescription benefit (Medicare Part D) that came into effect in the U.S. January 1 this year might also dampen the Americans’ demand for Canadian medications.

Market outlook
IMS expects the pharmaceutical market in Canada to grow at a compound annual rate between 5-8% over the next five years. “Factors which will slow down growth,” says Mr. Therriault, “include the loss of patent exclusivity for several major brands as well as continued efforts by governments to implement measures to control escalating drug costs.

“Looking at factors driving growth, several promising new drugs are expected in 2006, such as Exubera (diabetes therapy), Caduet (hypertension) and Cymbalta (depression),” says Mr. Therriault. “We also expect growth will be fuelled by oncology medications coming from the biotech sector, such as Avastin.”

About IMS Health
Operating in more than 100 countries, IMS Health is the world’s leading provider of market intelligence to the pharmaceutical and health-care stakeholders. With $1.8 billion in 2005 revenue and more than 50 years of industry experience, IMS offers leading-edge business intelligence products and services that are integral to clients’ day-to-day operations, including portfolio optimization capabilities; launch and brand management solutions; sales force effectiveness innovations; managed care and over-the-counter offerings; and consulting and services solutions that improve ROI and the delivery of quality healthcare worldwide. IMS information is also used by researchers, academics, government and other health stakeholders to advance health through informed decision-making.

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[1] Wholesale cost. All dollar figures in Canadian funds. Does not include purchases by Canadian internet pharmacies for sale to U.S. customers.

[2] Retail cost –includes mark-ups and pharmacists’ professional fees.

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