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Canadian Rx atlas Morgan, Steve; McMahon, Meghan; Lam, Jonathan; Mooney, Dawn; Raymond, Colette 2005

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5IF$BOBEJBO3Y"UMBT4UFWF.PSHBO1I%.FHIBO.D.BIPO#"+POBUIBO-BN#4D%BXO.PPOFZ#"$PMFUUF3BZNPOE1IBSN%%FDFNCFSAuthors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).“The Canadian Rx Atlas” was produced by:Centre for Health Services and Policy ResearchThe University of British Columbia 429-2194 Health Sciences Mall  Vancouver, BC  Canada  V6T 1Z3Tel: (604) 822-1949 Fax: (604) 822-5690Email: enquire@chspr.ubc.caYou can download this publication from our website at www.chspr.ubc.ca.This publication is protected by copyright. It may be distributed for educa-tional and non-commercial use, provided the Centre for Health Services and Policy Research is credited.Library and Archives Canada Cataloguing in PublicationCanadian Rx atlas / Steve Morgan ... [et al.].ISBN 1-897085-02-81. Solid dosage forms--Prices--Canada.  2. Drugs--Prices--Canada. 3. Drug utilization--Canada.  4. Drugs--Prescribing--Canada.  I. Morgan, Steve II. University of British Columbia.  Centre for Health Services and Policy ResearchRA410.55.C35C36 2005                     338.4’36151’0971                      C2005-906941-45BCMFPG$POUFOUT$BOBEJBO3Y"UMBT ]"CPVU$)413 "DLOPXMFEHFNFOUT *OUSPEVDUJPO .FUIPET 4UPSZ0WFSBMM7BSJBUJPO 4UPSZ$ZDMJDBMJUZ 4UPSZ1SJDFBOE1SFTDSJQUJPO4J[F 0WFSBMM&YQFOEJUVSF $BSEJPWBTDVMBST 1TZDIPUIFSBQFVUJDT $IPMFTUFSPM"HFOUT (BTUSPJOUFTUJOBM%SVHT "OUJJOGFDUJWFT "OUJBSUISJUJDT "OBMHFTJDT /FVSPMPHJDBMT )PSNPOFTBOE3FMBUFE5IFSBQZ %JBCFUFT5IFSBQZ ] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIAuthors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates)."CPVU$)413The Centre for Health Services and Policy Research (CHSPR) is an independent research centre based at the Uni-versity of British Columbia. CHSPR’s mission is to stimulate scientific enquiry into issues of health in population groups, and ways in which health services can best be organized, funded and delivered. Our researchers carry out a diverse program of applied health services and population health research under this agenda.CHSPR aims to contribute to the improvement of population health by ensuring our research is relevant to contem-porary health policy concerns and by working closely with decision makers to actively translate research findings into policy options. Our researchers are active participants in many policy-making forums and provide advice and assistance to both government and non-government organizations in British Columbia (BC), Canada and abroad. CHSPR receives core funding from the BC Ministry of Health to support research with a direct role in informing policy decision-making and evaluating health care reform, and to enable the ongoing development of the BC Linked Health Database. Our researchers are also funded by competitive external grants from provincial, national, and international funding agencies. Much of CHSPR’s research is made possible through the BC Linked Health Database, a valuable resource of data relating to the encounters of BC residents with various health care and other systems in the province. These data are used in an anonymized form for applied health services and population health research deemed to be in the public interest.CHSPR has developed strict policies and procedures to protect the confidentiality and security of these data hold-ings and fully complies with all legislative acts governing the protection and use of sensitive information. CHSPR has over 30 years of experience in handling data from the BC Ministry of Health and other professional bodies, and acts as the access point for researchers wishing to use these data for research in the public interest.For more information about CHSPR, please visit www.chspr.ubc.ca]$BOBEJBO3Y"UMBT"DLOPXMFEHFNFOUTIMS Health, Canada Inc. generously provided data for this research project. The production of this report was made possible by an Establishment Grant awarded to Steve Morgan by the Michael Smith Foundation for Health Research (MSFHR). Methods used in this study were developed with the support of an operating grant from the Canadian Institutes of Health Research (CIHR). The Centre for Health Services and Policy Research is supported, in part, by a MSFHR Research Unit Award and from contributions from the BC Ministry of Health. Finally, Steve Morgan is supported in part by a MSFHR Scholar Award and a New Investigator Award from the CIHR. IMS Health, MSFHR, CIHR, and the BC Ministry of Health did not direct, in any way, the study design, the analy-sis and interpretation of data, the writing of the report, or the decision to publish. All results and conclusions in this report are solely those of the authors; no endorsement by the supporting organizations is intended or should be inferred.Several staff at the Centre for Health Services and Policy Research assisted in the preparation of this report, includ-ing Allyson MacDonald, Chris Balma, Patricia Caetano, and Gillian Hanley.] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIAuthors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).*OUSPEVDUJPO&YQFOEJUVSF-FWFMT7BSJBUJPOTBOE5SFOETCanadians will spend over $20 billion on prescription drugs in 2006. This is more than is spent on all physi-cians in Canada, and more than half of what is spent on all hospital care in the country. Yet spending per capita on prescription drugs varies by over 50% across provincial populations.Growth in prescription drug expenditure has been faster in the past eight years than in any other period in the history of the modern pharmaceutical industry. The prominence of pharmaceuticals in the health care system (and health care budgets) has risen with the increased availability of medicines and with changes in drug marketing practices to promote the widening range of treatments.The levels, variations, and trends in prescription drug expenditures raise important questions:• What medicines account for most of the spending? • Is there overuse or underuse in some provinces?• Do some regions pay more for similar treatments?• What drives trends in spending across Canada?• Is spending ‘under control’ in any province?Despite the importance to Canadians’ health and their health care system, surprisingly little information is systematically collected and assessed to provide answers to these questions at a pan-Canadian level.5IF3Y"UMBT1SPWJEJOH/FX*OGPSNBUJPOPopulation-based and patient-specific drug informa-tion systems—such as the BC PharmaNet system—could be used to address the full spectrum of questions above. Until these data systems are established, health care policy and practice can be informed by the analy-sis of market-level data.This Rx Atlas provides the first-ever national portrait of overall (private and public) drug utilization and expen-diture. We use Canadian CompuScript data from IMS Health, Canada Inc. to quantify and illustrate aggre-gate levels, variations, and trends in Canada’s retail expenditure on prescription drugs from 1998 to 2004.The focus of this Rx Atlas is total retail expenditure combining both private and public costs. To ensure accurate measures of consumption, our analysis is restricted to oral solid drugs (e.g., “pills”). This excludes items such as liquids, creams, injectables, and inhaled drugs, but accounts for over 80% of retail expenditure on prescriptions in all provinces.The magnitude and causes of expenditure levels and trends are quantified for Canada as a whole and for all provinces. Separate analyses are conducted for each of the top ten drug categories based on expen-diture in 2004.The purpose of this Rx Atlas is to provide policy mak-ers, researchers, and the public with the best available evidence about drug utilization, pricing, and expen-diture dynamics. With the exception of cases of clear policy impact, we do not analyse policy implications of the findings. Instead, we hope that this Rx Atlas pro-vides a guide for those policy makers, practitioners, and researchers best placed to determine which of the illustrated dynamics are worthy of further investiga-tion and potential policy intervention.1PUFOUJBM%SJWFSTPG&YQFOEJUVSFPharmaceutical expenditure variations and trends could derive from the amount of drug consumed. Trends and variations in drug utilization could be driven by population age, medical needs, patterns of health care provision, or access to medicines. If drug utilization for comparable needs varies erratically, policy might aim to ensure access for under-served populations or to manage use among over-served populations.Trends and variations in expenditure may arise from the cost of drugs used to treat comparable needs. The type of drugs chosen to treat a given illness can affect ]$BOBEJBO3Y"UMBTthe cost of therapy, the quality of therapy, or both. When product selection does not improve outcomes, the choice of high cost options may be interpreted as a form of price inflation. Terms of drug coverage are a common tool used to manage this cost-driver.Finally, expenditure variations and trends may also derive from the price charged for a given product or from the availability of generic versions of a specific product. Patent laws, pricing policy, and generic avail-ability influence these potential cost-drivers.,FZ'JOEJOHTIn 2004, Canadians spent approximately $420 per cap-ita on retail purchases of oral solid prescription drugs. This amounted to over $13 billion, or 80% of the total retail prescription drug expenditure (including liquids, creams, injected and inhaled drugs).In descending order of spending in 2004, the top ten oral solid drug categories were as follows: cardio-vasculars, psychotherapeutics, cholesterol agents, gastrointestinal drugs, systemic antiinfectives, anti-arthritics, analgesics, neurologicals, hormones, and diabetes therapies. The top three therapeutic categories accounted for 54% of total spending in 2004. The top five catego-ries accounted for 68% and the top ten categories accounted for 84%.Expenditure per capita varied considerably across provinces. In 2004, per capita expenditure in the prov-inces varied by $174 or 56%, from $312 in Saskatch-ewan to $486 in New Brunswick.Variations in per capita drug spending across the prov-inces were primarily the result of variation in the vol-ume of drugs consumed. Some of the variation in use may be explained by differences in the age of the pro-vincial populations.Differences in the cost of drugs selected also con-tributed to provincial variation in drug expenditure. Some provinces selected products that were, on average, 4% less expensive that products selected in other provinces.Drug prices did not vary considerably across Canada. The price differences that were observed in this study appear to be the result of different levels of dispensing fees paid per unit of drug consumed.For Canada as a whole, per capita expenditure on oral solid prescription drugs nearly doubled between 1998 and 2004: from $213 to $420. Rates of overall expen-diture growth were far more comparable across prov-inces than were the levels of expenditure.Trends in drug expenditure were driven by a combi-nation of increased utilization of medicines and the selection of increasingly costly treatment options. The average price paid for drugs tended to fall over time due to the increased availability and use of generics.] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIAuthors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates)..FUIPET%BUBThe Canadian CompuScript Audit is based on data collected from more than 2,100 retail pharmacies (approximately 30% of the Canadian market) stratified by province. IMS Health projects these sample data to the entire population in each province except for Prince Edward Island and Newfoundland and Labrador (which are combined due to small population sizes).The data used in this Rx Atlas describe the volume of prescriptions, dollars, and units of drugs purchased from 1998 to 2004. The data contain information about 5,287 brand and generic versions of 1,508 drugs iden-tified by active ingredient and dosage. IMS grouped these drugs into 185 mutually exclusive drug classes, such as statins and proton pump inhibitors. Drug class-es are further aggregated into 40 broad treatment cat-egories, the 10 largest of which are studied in detail.Cost data include dispensing fees and retail mark-ups. Prices reported here are therefore affected in part by the length of prescriptions in each region. The unit cost of a drug will be lower when prescriptions are longer, resulting in lower per unit dispensing fees.$PODFQUVBM'SBNFXPSLThe conceptual framework used in this Rx Atlas takes advantage of the therapeutic classifications in the IMS Health data to illustrate six different types of utiliza-tion and price dynamics in the Canadian pharmaceu-tical sector. These six “determinants of expenditure” fall into three broad categories of cost-drivers: Volume Effects, Therapeutic Choices, and Price Effects. This is illustrated in Figure 1.7PMVNF&GGFDUTVolume Effects are factors that relate to the absolute volume of prescription drug therapy received by a population. This includes “Volume of Prescriptions,” which is the per capita volume of prescriptions received from broad categories of treatment. It also includes average “Prescription Size,” which may compound or counteract the cost-impact of changes in the number of prescriptions dispensed. Trends or variations may, for example, reflect the use of fewer but longer prescrip-tions over time or in one region.Differences or changes in the volume of therapy used by a population are not necessarily a cause for con-cern if driven by needs. Analysis of utilization trends Figure 1: Conceptual frameworkTotal Change or Variation In Per Capita Expenditure=Volume EffectsPrice EffectsTherapeutic Choices+Volume of Prescriptions Change in number of prescriptions filledfrom 40 broad therapeutic categoriesPrescription SizeChange in average number of units per prescription filled++PricesChange in prices paid per unit of brand and generic versions of drugsGeneric UseChange in average price paid per unit of drugs due to use of generics++Therapeutic MixChange in average mix of drug classes selected from within therapeutic categoriesDrug MixChange in average mix of drug types selected from within drug classes]$BOBEJBO3Y"UMBTor regional variations may, however, indicate areas deserving of detailed investigation if there is potential for underuse, overuse, or misuse.5IFSBQFVUJD$IPJDFTTherapeutic Choices are factors that influence the cost of therapy through the selection of the type or form of drug per course of treatment. Therapeutic choices include the mix of drug classes from which drugs are prescribed and the types of drugs selected within drug classes. These choices may change over time or vary across regions.Broad therapeutic choices are referred to as “Thera-peutic Mix,” and reflect the cost-impact of decisions concerning the drug classes from which prescriptions are written. This includes such dynamics as variation (over time or across regions) in the use of angiotensin II receptor blockers within the therapeutic category of cardiovascular drugs.Narrow therapeutic choices are referred to as “Drug Mix.” This cost-dynamic reflects the selection of spe-cific drug types within a particular drug class: e.g., variation (over time or across regions) in the use of simvastatin versus atorvastatin within the class of drugs used to treat high cholesterol.The narrower Drug Mix decisions are less likely to have major effects on health outcomes than broader Therapeu-tic Mix decisions. Thus, finding that significant expendi-ture variation (over time or across regions) stems from variation in Drug Mix may provoke prudent policy inter-vention to steer utilization toward cost-effective choices within a given class of drugs. In contrast, finding that significant expenditure variation (over time or across regions) stems from variation in Therapeutic Mix, with-out a corresponding health benefit, may provoke policies that focus on educating prescribers and patients about cost-effective treatment choices for a given condition: such as initiating treatment for hypertension with effec-tive and low-cost diuretics.1SJDF&GGFDUTPrice Effects are factors that influence the cost of therapy received by a population without altering the quantity or type of drug used. This includes the price charged for products already on the market: “Prices.” In this study, such prices are determined in part by the average length of prescription. This is because dispens-ing fees are included in the cost of medicines tracked in this study.Price Effects also include the rate at which generic drugs are selected: “Generic Use.” The cost-impact of Generic Use will be influenced by the availability of generic alternatives to brand-name medicines, the relative price of brand and generic versions of a given medicine, and by policies to encourage generic substi-tution by patients or providers.Price Effects generally have no impact on the quality of health outcomes obtained per course of therapy. As such, they are common targets for policy intervention.*OEFYFTFigure 1 depicts the conceptual framework in an addi-tive fashion. Although the framework is quantified with economic price and quantity indexes that inter-act multiplicatively, we have converted these indexes to an additive format using logarithms. Thus, indi-vidual cost-drivers add up to the three respective sub-totals, and these sub-totals add up to the total variation observed or total change over time.3FGFSFODFThis Rx Atlas is based on the methods and approach used in Morgan, SG. Drug Expenditure Trends in the Canadian Provinces: Magnitude and Causes from 1998 to 2004. Healthcare Policy; 2005 1(1): 85-99.] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIAuthors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).4UPSZ0WFSBMM7BSJBUJPOOverall Variation in Per Capita Expenditure, 2004 and 1998Overall CardiovascularsPsychotherapeutics Cholesterol agentsAntispasmodicsAntiinfectivesAntiarthriticsAnalgesicsNeurologicalsHormonesDiabetes therapy-21%-23%-1%-31%-36%-10%-37%-5%3%-28%-30%-5%-14%4%-21%4%10%8%29%-7%-10%7%-26%-11%-28%-45%-31%-20%-12%-43%-16%-30%-23%4%3%17%-15%-12%3%14%-11%14%-20%7%1%-1%-8%3%7%2%9%17%-9%0%-2%13%16%10%28%5%-5%-3%-30%17%34%15%16%13%26%12%28%11%37%5%4%-8%26%12%21%9%11%38%11%10%-4%2%-15%11%-6%3%-6%-14%4%25%-3%-1%-25%-37%-10%BC AB SK MB QCON NB PE/NLNSOverall CardiovascularsPsychotherapeutics Cholesterol agentsAntispasmodicsAntiinfectivesAntiarthriticsAnalgesicsNeurologicalsHormonesDiabetes therapy-19%-25%5%-32%-28%-19%-34%-4%14%-21%-25%-10%-25%12%-35%-12%4%-1%24%-11%-7%-15%-21%-13%-24%-48%-30%-11%1%-47%2%-10%-31%-28%-28%-13%-41%-39%-29%-8%-40%-9%-42%-33%7%8%-3%11%21%12%18%22%-9%0%-4%7%11%-1%30%-14%-8%-13%-32%9%26%31%13%13%19%-2%18%12%26%4%10%0%0%22%30%20%8%55%7%16%20%16%-11%39%1%12%-10%-39%22%18%6%8%4%-31%-6%200419981BUUFSOPG&YQFOEJUVSFThe most notable pattern that emerges from this Rx Atlas is the difference in per capita expenditure in Eastern ver-sus Western Canada. In both 1998 and 2004, per capita expenditure in British Columbia to Manitoba tended to be lower than per capita expenditure in Ontario through to the Atlantic Provinces.What stands out in particular is the fact that British Columbia and Saskatche-wan were well below the national aver-age in both 1998 and 2004, while Que-bec, New Brunswick, and Nova Scotia were well above the national average in both years.Manitoba had been well below the national average in 1998, but rose to exceed the national average in 2004. This may be due to the effects of Inter-net pharmacy in that province (dis-cussed in Overall Expenditure, Deter-minants of Change).The pattern of higher expenditure per capita in Eastern versus Western Canada is relatively consistent across leading drug classes. There were just a few notable exceptions — such as spending on cholesterol drugs, neurologicals, and hormones in Prince Edward Island and Newfoundland and Labrador. 4PVSDFPG%JGGFSFODFTOn the facing page, the potential sources of differences in expenditure between provinces are broken into the three broad categories of Volume Effects, Therapeutic Choices, and Price Effects. It is clear that Volume Effects contributed considerably to the pattern of expenditure variation across provinc-es. Provinces in Western Canada tended to consume smaller amounts of the prescription drugs tracked in this study. This is true for the overall pharmaceutical market and for the ten leading therapeutic classes.Even in anomalous cases of lower-than-average spend-ing in Eastern Canada—such as that found in some cat-egories for Prince Edward Island and Newfoundland and Labrador—the difference is primarily explained by variation in the volume of drug consumed.Provincial differences in Volume Effects may be explained in part by differences in the average age of provincial populations. Alberta has a younger-than-average population, while Quebec, New Brunswick, and Nova Scotia have older populations.Percent variation from the mean national level of overall per capita expenditure (all therapeutic categories) ]$BOBEJBO3Y"UMBT4UPSZ0WFSBMM7BSJBUJPOOverall Variation in Per Capita Expenditure, 2004 and 1998It should be noted that a Canadian Institute for Health Information report—“Provincial and Territorial Gov-ernment Health Expenditure by Age Group, Sex and Major Category” (May 2005)—indicates that age-adjustments will change results by only a few percent-age points. British Columbia and Saskatchewan will likely have lower-than-average utilization even after adjusting for differences in population age.Differences in the costs of Therapeutic Choices and Prices Effects also contributed to variations in expen-diture across provinces, but they were smaller than the regional cost-impact of Volume Effects.Inter-provincial variation in the cost of Therapeu-tic Choices had a moderate impact on variations in retail spending on oral solid prescription drugs. The effects of Therapeutic Choices on regional variations are notable in certain drug categories—such as psy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verall CardiovascularsPsychotherapeutics Cholesterol agentsAntispasmodicsAntiinfectivesAntiarthriticsAnalgesicsNeurologicalsHormonesDiabetes therapyOverall CardiovascularsPsychotherapeutics Cholesterol agentsAntispasmodicsAntiinfectivesAntiarthriticsAnalgesicsNeurologicalsHormonesDiabetes therapyAB SK MB ON QC NB NS PE/NLBC AB SK MB ON QC NB NS PE/NLBC AB SK MB ON QC NB NS PE/NLBCPercent variation from the mean national level of per capita expenditure for three determinants of variation (all therapeutic categories)Volume Effects Choice Effects Price Effectschotherapeutics, gastrointestinal drugs, antiinfectives, analgesics, and diabetes therapies.There was relatively little systematic variation in the cost of Therapeutic Choices. Eastern and Western prov-inces are about equally likely to be above or below the national average in the cost of Therapeutic Choices. Finally, differences in Price Effects caused modest variation in per capita drug expenditure for the market as a whole, as well as for the top 10 therapeutic catego-ries. The most significant outlier in this regard was the category of hormones, where variation in Price Effects was considerable.Most of the observed price differences likely stem from the amount of dispensing fees paid per unit of drug rather than regional differences in the price of drugs themselves. Further Price Effects stem from variation in the rate of generic drug use when available.] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIAuthors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).4UPSZ$ZDMJDBMJUZCyclicality in Per Capita Expenditure, 1998-20041999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$0$10$20$30$40$50British ColumbiaVolume EffectsManitobaVolume Effects4FBTPOBM7BSJBUJPO"1PMJDZ4UPSZA second finding from the analysis of drug utilization and expenditure over time and across regions is the significant amount of seasonality in drug use.Volumes of prescription drugs consumed typically increase in the winter months and decrease in the sum-mer months. Such findings are consistent with the notion that populations tend to become “sicker” in the winter months, when colds, the flu, and other condi-tions are more prevalent.There is, however, a policy component to seasonality in drug utilization and expenditure. This is illustrated by comparing the pattern of Volume Effects in Mani-toba with those in British Columbia (see figure).Both Manitoba and British Columbia operate univer-sal, deductible-based public drug plans. Both have had such plans in place prior to the beginning of the period studied in this Rx Atlas (although British Columbia changed the terms of its program in 2003).Under a deductible-based drug benefit program, patients must pay for their medicines out-of-pocket or through private insurance at the beginning of the deductible period.After the individual (or household) has passed the set deductible, however, drug purchases are “free” until the end of the deductible period. This provides patients who have regular drug costs with an incen-tive to “stockpile” medicines toward the end of the deductible period.Evidence of this is found in differences in the sea-sonality of Volume Effects for Manitoba and British Columbia.Seasonal spikes in British Columbia occur during the fourth quarter of every year. In that province, the deductibles for public drug coverage are based on a calendar year.Seasonal spikes in Manitoba occur during the first quarter of every year. Deductibles for public drug coverage there are based on a fiscal year. It would be unlikely that the burden of illness in the two provinces differed by an amount equivalent to the time-shift in deductible periods.Seasonality or stockpiling in drug purchases caused by deductible-based pharmacare programs is a pat-tern of drug utilization that may deserve further investigation.Change in per capita expenditure in two provinces, 1998-2004 (all categories) ]$BOBEJBO3Y"UMBT4UPSZ1SJDFBOE1SFTDSJQUJPO4J[FEffect of Prices and Rx Size on Per Capita Expenditure, 1998-20041999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-15$-10$-5$0$5$10$15Saskatchewan Price ChangesOntario Price ChangesOntario Prescription SizeSaskatchewan Prescription Size%SVH1SJDFTBOE1SFTDSJQUJPO4J[FThe cost information in the IMS data includes dispens-ing fees and retail mark-ups. There was no accurate means to remove the impact of dispensing fees on total expenditure (because there is no single, reliable source of average fees charged in each province, during each quarter, over the period from 1998 to 2004).As a result, regional differences in the “Prices” tracked in this Rx Atlas may reflect differences in the average “Prescription Size” as much (or more) than differences in the prices actually charged for the specific drugs in question.The unit cost of a drug will be lower in periods or regions where prescriptions are longer. This is because, holding constant the price charged for the drug itself, the professional fee paid per unit of the drug is lower if the prescription is for a larger numbers of units. For example, a $9 dispensing fee raises the cost per tablet by $0.30 if the prescription is for 30 pills, and by only $0.09 if the prescription is for 100 pills.Evidence of the impact of Prescription Size on aver-age Prices paid for drugs (include dispensing fees) can be found in time trends for selected provinces. In Ontario and Saskatchewan, for example, the aver-age Prescription Size changes suddenly at specific periods between the first quarter of 1998 and the last quarter of 2004 (see figure).In Saskatchewan, Prescription Size increased sudden-ly in 2002. During the quarter-year where Prescription Size increased, expenditure per capita did not jump suddenly. Rather, Prescription Volume declined slightly and, most notably, Prices declined significantly. These factors offset the cost-impact of the rise in Prescrip-tion Size. Moreover, the fall in Prices (which includes dispensing fees) suggests that the change toward fewer but longer prescriptions reduced the average unit price paid for drugs dispensed.A similar though opposite pattern is observed in Ontario at the beginning of 2004. In this case, Prescription Size fell notably (and temporarily) while Prices increased almost proportionally.The impact of Prescription Size on Prices may be worth further study to determine whether the savings from writing fewer-but-longer prescriptions come at the cost of reduced quality of care or wastage of unused medicines.Variation in price and prescription size in two provinces, 1998-2004 (all categories) ] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIPercent difference between provincial averages and the national average of drug expenditure, 2004, overall (all therapeutic categories)Level of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).0WFSBMM&YQFOEJUVSF&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTCanadians spent an average of $420 each on oral solid prescription drugs in 2004. This amounted to over $13 billion in total spending.Expenditure per capita varied considerably across provinces. In 2004, per capita expenditure in the prov-inces varied by $174 or 56%, from $312 in Saskatch-ewan to $486 in New Brunswick.Costs in Saskatchewan and British Columbia were approximately 20% below the Canadian average throughout the period from 1998 to 2004. New Brunswick, Quebec, and Nova Scotia were roughly 10% or more above average over the period. Expen-diture per capita in Manitoba grew from nearly 30% below the national average to nearly 4% above the national average.%FUFSNJOBOUTPG7BSJBUJPOMost of the variation in expenditure observed in 2004 was due to differences in Volume Effects. This repre-sented differences in the total number of units of medi-cine purchased per capita across provinces. Some prov-inces, like Quebec, had far higher Prescription Volume than the national average while simultaneously having smaller-than-average Prescription Size.Therapeutic Choices had a moderate impact on varia-tion in expenditure. Interestingly, lower-than-average costs related to Therapeutic Choices are found in some regions with higher-than-average expenditure per cap-ita (Atlantic Canada) and some with lower-than-aver-age expenditure per capita (BC and Saskatchewan). Price Effects created modest variation in expenditure. Differences across provinces in the rate of generic sub-stitutions (Generic Use) were smaller than differences in prices paid per unit of medicine (Prices). Further-more, differences in average unit prices were domi-nated by differences in average Prescription Size. For example, higher prices in Quebec are a reflection of smaller Prescription Sizes, while longer prescriptions in BC resulted in lower prices. Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$486$42015.8%-6.0%26.5%20.5%-4.2%0.1%-4.1%0.5%-1.1%-0.6%$395$420-5.8%-3.7%6.4%2.7%-6.9%-2.5%-9.4%1.4%-0.6%0.8%$470$42011.9%-6.6%25.9%19.3%-4.0%-1.0%-4.9%-1.5%-1.0%-2.4%$422$4200.6%-21.4%20.9%-0.5%0.4%-0.1%0.3%0.9%-0.1%0.8%$435$4203.5%-1.4%4.9%3.5%-0.7%2.4%1.7%0.2%-1.8%-1.7%$312$420-25.8%-13.5%-10.0%-23.5%-2.6%-1.0%-3.6%4.0%-2.7%1.3%$398$420-5.3%-25.2%22.2%-3.0%0.1%1.4%1.5%-2.9%-1.0%-3.8%$331$420-21.1%-29.2%18.1%-11.1%-2.1%-3.2%-5.3%-3.3%-1.4%-4.7%$475$42013.2%47.9%-41.1%6.8%2.0%-0.5%1.5%2.8%2.1%4.9%]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 20040WFSBMM&YQFOEJUVSFNewfoundland andLabrador andPrince Edward I.-6%12%NewNova16%BrunswickScotiaBritish-21%-5%1%13%-26%SaskatchewanAlbertaManitobaOntarioQuebecColumbia4%-11%-3%3%-1% 7%-23%-5%2%2%0% 1%-4%-5%-4%-2%1% 5%1%20%-5%-9%-1% -2%1%19%3%-4%] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, overall (all therapeutic categories)Change in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).0WFSBMM&YQFOEJUVSF1BDFPG$IBOHFUPFor Canada as a whole, per capita expenditure on oral solid prescription drugs nearly doubled between 1998 and 2004: from $213 to $420.Expenditure grew most rapidly in Manitoba, Que-bec, and Alberta, and least rapidly in Nova Scotia and Prince Edward Island and Newfoundland and Labra-dor. At prevailing rates of growth, expenditure per cap-ita in Manitoba would double in four years, whereas it would take seven years for expenditure per capita in Nova Scotia to double.%FUFSNJOBOUTPG$IBOHFWhile rates of per capita expenditure growth varied across provinces, the broad determinants of change in expenditure was consistently ranked: Volume Effects dominated cost growth in all provinces, followed by Therapeutic Choices, and then Price Effects.Most of the growth in expenditure in Canada and in all provinces was due to increased Prescription Vol-ume. Growth in the average Prescription Size further increased expenditure in all provinces but Quebec.Therapeutic Choices were the second most significant category of expenditure determinants. These decisions increased expenditure per capita by 3.3% to 5.1% per year across provinces. Changes in Therapeutic Mix (the mix of drug classes selected) increased national expenditure by more than changes in Drug Mix (choice of drugs within classes).Price Effects had relatively modest impacts on drug expenditure across Canada. Moderate savings stem-ming from the use of generic drugs generally more than offset gradually increasing unit prices paid for drugs (including dispensing fees). The notable excep-tions were Saskatchewan, where the average unit pric-es fell by 2.5% per year, and Manitoba, where average unit prices increased at a rate of 2.5% per year.Note: Manitoba’s expenditure growth may have been due, in part, to Internet pharmacy sales to the United States. The IMS data may capture some US-bound purchases, which would be reflected in Prescription Volume, and US demand may have increased dispens-ing fees in Manitoba, which would be reflected in the average unit price data.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $213 $173 $191 $169 $154 $228 $228 $240 $260 $216 Per capita spending in 2004 $420 $331 $398 $312 $435 $422 $475 $486 $470 $395 Average Annual Growth (AAG) 11.9% 11.4% 13.0% 10.7% 18.9% 10.9% 13.0% 12.4% 10.4% 10.6%AAG due to prescription volume 8.2% 8.4% 7.2% 6.8% 11.2% 6.8% 10.3% 5.0% 4.2% 3.7%AAG due to prescription size 0.2% 0.2% 3.2% 3.3% 1.2% 0.6% -0.4% 3.5% 2.9% 3.5%Subtotal Volume Effects 8.4% 8.6% 10.4% 10.1% 12.4% 7.4% 10.0% 8.5% 7.2% 7.2%AAG due to therapeutic mix 2.9% 2.7% 2.6% 2.7% 3.3% 3.1% 2.9% 3.2% 2.7% 2.6%AAG due to drug mix 1.0% 0.6% 0.9% 1.6% 1.8% 0.9% 1.3% 1.4% 0.9% 1.3%Subtotal Therapeutic Choices 3.9% 3.3% 3.5% 4.3% 5.1% 4.0% 4.2% 4.7% 3.6% 3.8%AAG due to prices 0.6% 0.6% 0.3% -2.5% 2.5% 0.5% -0.6% 0.4% 0.7% 0.6%AAG due to generic use -1.0% -1.2% -1.1% -1.2% -1.1% -0.9% -0.6% -1.1% -1.1% -1.1%Subtotal Price Effects -0.3% -0.6% -0.9% -3.7% 1.4% -0.5% -1.2% -0.7% -0.4% -0.4%]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-20040WFSBMM&YQFOEJUVSFBritish11.4%13.0%10.9%13.0%10.7%SaskatchewanAlbertaManitobaOntarioQuebecColumbia18.9% Newfoundland andLabrador andPrince Edward I.10.6%8.6%10.4%12.4%7.4% 10.0%10.1%3.3%3.5%5.1%4.0% 4.2%4.3%-0.6%-0.9%1.4%-0.5% -1.2%-3.7%8.5%3.6%3.8%-0.7%-0.4%-0.4%7.2%7.2%4.7%10.4%NewNova12.5%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan0WFSBMM&YQFOEJUVSF1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$90]$BOBEJBO3Y"UMBTQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, overall (all therapeutic categories)Quarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes0WFSBMM&YQFOEJUVSF1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$901999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-20$-10$0$10$20$30$40$50$60$70$80$90-35%-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentY] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).$BSEJPWBTDVMBST&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTCanadians spend more on cardiovascular drugs than any other therapeutic category of medicine. Average spending on cardiovascular drugs was $86 per person in 2004. Almost all of the spending in this category is for drugs regularly used to treat high blood pres-sure (96%); most is spent on angiotensin II convert-ing enzyme (ACE) inhibitors at 33%, calcium channel blockers at 28%, and angiotensin II receptor blockers (ARBs) at 17%.Cardiovascular drug expenditure per capita varied significantly across provinces from 1998 to 2004. In 2004, per capita expenditure in the provinces varied by $38 or 58%, from $66 in British Columbia to $104 in Nova Scotia.As illustrated on the pages that follow, from 1998 to 2004, per capita expenditure was consistently higher in Nova Scotia, Quebec, and New Brunswick than in British Columbia, Alberta, and Saskatchewan. Spend-ing in Manitoba went from well below to just above national average.%FUFSNJOBOUTPG7BSJBUJPOProvincial variation in per capita expenditure on cardio-vascular drugs is attributed primarily to variation in Vol-ume Effects. For example, the slightly lower-than-average Prescription Volume dispensed in Nova Scotia was more than offset by the larger-than-average Prescription Sizes. Combined, these Volume Effects caused expenditure per capita in Nova Scotia to be 23% above the national aver-age. People in western Canada tended to use fewer car-diovascular drugs than the rest of the country.Therapeutic Choices had a small impact on provincial variation in cardiovascular expenditure. British Colum-bia and the Atlantic provinces were below the national average with respect to Therapeutic Mix (the selection of drug classes); and British Columbia, Saskatchewan and Prince Edward Island and Newfoundland and Lab-rador were lower than average with respect to Drug Mix (selection of drugs within classes).Price Effects were modest in this therapeutic category. Residents of Quebec use generic drugs with less fre-quency than the Canadian average. Prices for brand and generic drugs were higher in provinces with shorter-than-average prescriptions (Quebec and Saskatchewan), and lower in provinces with longer prescriptions (BC).Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$97$8612.5%-16.1%30.9%14.8%-1.6%-0.4%-2.0%0.8%-1.1%-0.3%$89$863.5%-2.1%9.4%7.4%-4.1%-1.9%-6.1%3.0%-0.8%2.2%$104$8620.7%-3.9%26.8%22.9%-1.6%0.3%-1.3%-0.3%-0.5%-0.9%$86$86-0.7%-27.4%29.0%1.6%-0.1%0.0%-0.2%-1.5%-0.6%-2.1%$89$863.5%-3.6%3.3%-0.4%0.8%2.2%3.0%1.4%-0.6%0.8%$77$86-10.6%8.5%-26.7%-18.2%2.2%-1.1%1.1%7.6%-1.1%6.5%$75$86-13.7%-45.9%33.3%-12.6%1.9%-0.1%1.8%-2.3%-0.5%-2.9%$66$86-23.1%-43.1%28.7%-14.4%-1.3%-3.1%-4.4%-3.9%-0.4%-4.3%$101$8616.4%62.7%-52.6%10.1%0.2%0.0%0.2%4.4%1.6%6.1%Percent difference between provincial averages and the national average of drug expenditure, 2004, cardiovascular drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004$BSEJPWBTDVMBSTBritish-23%-14%-1%16%-11%SaskatchewanAlbertaManitobaOntarioQuebecColumbia4%-14%-13%0%2% 10%-18%-4%2%3%0% 0%1%-4%-3%1%-2% 6%7%15%-1%-6%0% -1%2%23%7%-2%Newfoundland andLabrador andPrince Edward I.4%21%NewNova13%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on oral solid cardiovascular drugs increased by 83% from $47 in 1998 to $86 in 2004. The average annual growth rate was 10.5%, at which per capita expenditure doubles every 6.9 years.The average annual growth rate for per capita expen-diture in Manitoba was unusually high at 17.3%. At that growth rate, per capita expenditure doubles in just over four years. Growth of per capita expen-diture on cardiovascular drugs in other provinces ranged from 9.1% per year (Nova Scotia, and Prince Edward Island and Newfoundland and Labrador) to 13.1% per year (Alberta).%FUFSNJOBOUTPG$IBOHFFor all provinces, cardiovascular drug expenditure growth was largely due to Volume Effects. Far more prescriptions were being written over the period; although, the average size of prescriptions dispensed fell slightly in most provinces.The increased volume of drug consumed in this cat-egory reflects the impact of rapid growth in the use of ACE-inhibitors and ARBs, which explained more than half of the total volume of cardiovascular prescriptions written in 2004.In contrast to other leading therapeutic categories, Therapeutic Choices contributed relatively little toward cardiovascular drug expenditure trends. Most of the impact of Therapeutic Choices came from Ther-apeutic Mix (e.g., trends toward using ACE-inhibitors) rather than Drug Mix (e.g., selecting one ACE-inhibi-tor over another).In all provinces except for Manitoba, modest growth in unit prices paid for drugs were roughly offset by sav-ings from increased generic substitutions.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $47 $36 $36 $41 $34 $51 $53 $54 $62 $53 Per capita spending in 2004 $86 $66 $75 $77 $89 $86 $101 $97 $104 $89 Average Annual Growth (AAG) 10.5% 11.0% 13.1% 11.0% 17.3% 9.0% 11.4% 10.4% 9.1% 9.1%AAG due to prescription volume 9.5% 10.4% 9.3% 9.2% 11.9% 7.9% 11.6% 5.2% 5.5% 3.0%AAG due to prescription size -0.4% -0.8% 2.8% -0.2% -0.1% -0.4% -1.6% 3.8% 2.2% 4.7%Subtotal Volume Effects 9.0% 9.6% 12.1% 9.1% 11.8% 7.5% 10.0% 9.0% 7.6% 7.7%AAG due to therapeutic mix 0.9% 1.5% 1.0% 0.9% 1.5% 1.2% 1.1% 1.1% 0.9% 0.8%AAG due to drug mix 0.4% 0.2% 0.0% 1.0% 1.1% 0.1% 0.5% 0.3% 0.0% 0.5%Subtotal Therapeutic Choices 1.3% 1.7% 1.0% 1.9% 2.6% 1.3% 1.6% 1.4% 0.9% 1.4%AAG due to prices 0.7% 0.2% 0.6% 0.7% 3.3% 0.8% 0.4% 0.5% 1.0% 0.4%AAG due to generic use -0.6% -0.5% -0.6% -0.7% -0.4% -0.6% -0.6% -0.4% -0.4% -0.4%Subtotal Price Effects 0.2% -0.3% -0.1% 0.0% 2.9% 0.2% -0.2% 0.1% 0.6% 0.0%$BSEJPWBTDVMBSTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, cardiovascular drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British11.0%13.1%9.0%11.4%11.0%SaskatchewanAlbertaManitobaOntarioQuebecColumbia17.3% Newfoundland andLabrador andPrince Edward I.9.1%9.6%12.1%11.8%7.5% 10.0%9.1%1.7%1.0%2.6%1.3% 1.6%1.9%-0.3%-0.1%2.9%0.2% -0.2%0%9.0%0.9%1.4%0.1%0.6%0.0%7.6%7.7%1.4%9.1%NewNova10.4%BrunswickScotia$BSEJPWBTDVMBST] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan$BSEJPWBTDVMBST1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes$BSEJPWBTDVMBST1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.00-35%-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%30%35%40%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, cardiovascular drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1TZDIPUIFSBQFVUJDT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTThe second largest therapeutic category of oral solid prescription drug spending is psychotherapeutics. Canadians spent $60 per capita on these medicines in 2004. Over half of this spending was for selective serotonin reuptake inhibitors (51%) and other anti-depressants (9%); the remainder is spent on antipsy-chotic drugs (28%), benzodiazepines (7%), and other psychotherapeutics.In 2004, per capita expenditure in the provinces varied by $32 or 75%, from $43 in Saskatchewan to $75 in New Brunswick.%FUFSNJOBOUTPG7BSJBUJPOAs with most other therapeutic categories, provincial variation in expenditure on psychotherapeutic drugs stems largely from Volume Effects.Residents in Saskatchewan had a far lower psychother-apeutic Prescription Volume than the national average, while residents of Quebec had a far higher-than-aver-age Prescription Volume with far lower-than-average Prescription Size. Residents of New Brunswick and Nova Scotia purchased the highest overall volume (Vol-ume Effects) of psychotherapeutic drugs in Canada. The difference for New Brunswick was enough to drive psychotherapeutic expenditure per capita more than 40% above the national average.Therapeutic Choices had a moderate impact on psy-chotherapeutic drug expenditure. Unlike most oth-er leading categories of treatment, residents in the Western provinces (except Saskatchewan) tended to select a more costly Therapeutic Mix and a more costly Drug Mix when it came to purchasing psy-chotherapeutic drugs.Price Effects caused a moderate degree of variation in expenditure on oral solid psychotherapeutic drugs. This reflected relatively small differences across prov-inces in both the unit prices paid for drugs, but a mod-erate level of generic substitution.Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$75$6025.7%9.7%31.8%41.6%-12.1%0.3%-11.8%-0.9%-3.2%-4.1%$57$60-5.7%-14.3%16.9%2.6%-9.5%1.5%-8.0%0.5%-0.9%-0.3%$65$608.6%-9.7%35.5%25.8%-7.5%-2.3%-9.8%-4.2%-3.2%-7.3%$55$60-8.4%-24.0%15.7%-8.3%1.2%-1.8%-0.6%0.4%0.1%0.5%$70$6017.2%1.3%10.6%12.0%4.3%4.0%8.3%-0.9%-2.2%-3.1%$43$60-27.7%-26.1%5.6%-20.5%-3.7%-0.5%-4.2%1.8%-4.7%-2.9%$62$603.9%-16.0%11.0%-5.1%9.1%3.3%12.3%-1.0%-2.4%-3.4%$60$60-0.8%-11.5%8.5%-3.0%7.1%0.1%7.2%-1.9%-3.1%-5.0%$66$6010.4%44.9%-35.1%9.8%-4.6%-0.7%-5.3%2.3%3.6%5.8%Percent difference between provincial averages and the national average of drug expenditure, 2004, psychotherapeutic drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 20041TZDIPUIFSBQFVUJDTBritish-1%4%-8%10%-28%SaskatchewanAlbertaManitobaOntarioQuebecColumbia17%-3%-5%12%-8% 10%-21%7%12%8%-1% -5%-4%-5%-3%-3%1% 6%-3%42%-10%-8%-4% -7%0%26%3%-12%Newfoundland andLabrador andPrince Edward I.-6%9%NewNova26%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPCanadian per capita expenditure on psychotherapeutic drugs grew 106% from $29 in 1998 to $60 in 2004. The average annual growth rate was 12.8%, at which expenditure doubles in 5.7 years. The rate of expenditure growth was most rapid in Manitoba and Quebec, and least rapid in Nova Sco-tia. In 2004, per capita expenditure was highest in New Brunswick and lowest in Saskatchewan. The psychotherapeutic category of drugs contains medi-cines to manage depression, anxiety and psychoses. In 2004, more than half of total expenditure on psy-chotherapeutic drugs was concentrated on medicines to treat depression. %FUFSNJOBOUTPG$IBOHFChanges in expenditure on psychotherapeutic drugs reflect a combination of expanded use (Volume Effects) and changes in the drug classes prescribed from within this broad therapeutic category (Thera-peutic Choices). Prescription Volume was the largest determinant of expenditure in all provinces except Atlantic Canada. Significant increases in the number of prescriptions dispensed for selective serotonin reuptake inhibitors (commonly used to treat depression) were observed over the period. The average size of prescriptions fell in all provinces except Alberta and the Atlan-tic provinces, where average length of prescriptions increased slightly. Therapeutic Choices had a very significant impact on drug spending in this category of medicines. Thera-peutic Mix (selecting classes of drug to prescribe) had a notable impact, increasing national expenditure at an annual rate of 5.7%. Most of this stemmed from the increased use of relatively costly atypical antipsychot-ics. Drug Mix (e.g., choices among antidepressants) were a more modest contributor to drug expenditure.Price Effects had a small, cost-saving impact on expen-diture in most regions. In all provinces except for Manitoba and Quebec, increased use of generic drugs (particularly from the third quarter of 2003 onwards) created savings that more than offset increases in the unit price of drugs purchased.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $29 $31 $32 $22 $25 $28 $29 $35 $35 $26 Per capita spending in 2004 $60 $60 $62 $43 $70 $55 $66 $75 $65 $57 Average Annual Growth (AAG) 12.8% 11.7% 11.5% 12.0% 18.7% 11.7% 14.9% 13.9% 10.9% 13.8%AAG due to prescription volume 7.8% 8.3% 6.8% 6.5% 10.3% 6.5% 9.8% 4.5% 3.1% 3.6%AAG due to prescription size -0.8% -0.5% 1.8% -1.0% -0.2% -0.6% -2.4% 1.9% 2.3% 3.0%Subtotal Volume Effects 7.0% 7.8% 8.7% 5.5% 10.1% 5.9% 7.4% 6.4% 5.4% 6.6%AAG due to therapeutic mix 5.7% 4.2% 3.9% 5.1% 5.6% 5.9% 6.6% 6.6% 5.5% 5.8%AAG due to drug mix 0.7% 1.1% 0.4% 2.5% 2.4% 0.5% 0.9% 2.0% 1.1% 2.3%Subtotal Therapeutic Choices 6.4% 5.3% 4.2% 7.6% 8.0% 6.5% 7.4% 8.7% 6.6% 8.1%AAG due to prices 1.0% 0.7% 0.7% 1.0% 2.3% 1.1% 0.7% 0.8% 0.9% 0.5%AAG due to generic use -1.6% -2.1% -2.1% -2.1% -1.7% -1.7% -0.6% -2.0% -2.0% -1.4%Subtotal Price Effects -0.6% -1.4% -1.4% -1.1% 0.6% -0.7% 0.1% -1.2% -1.1% -0.9%1TZDIPUIFSBQFVUJDTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, psychotherapeutic drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British11.7%11.5%11.7%14.9%12.0%SaskatchewanAlbertaManitobaOntarioQuebecColumbia18.7% Newfoundland andLabrador andPrince Edward I.13.8%7.8%8.7%10.1%5.9% 7.4%5.5%5.3%4.2%8.0%6.5% 7.4%7.6%-1.4%-1.4%0.6%-0.7% 0.1%-1.1%6.4%6.6%8.1%-1.2%-1.1%-0.9%5.4%6.6%8.7%10.9%NewNova13.9%BrunswickScotia1TZDIPUIFSBQFVUJDT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan1TZDIPUIFSBQFVUJDT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditureper capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes1TZDIPUIFSBQFVUJDT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.00-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%30%35%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, psychotherapeutic drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).$IPMFTUFSPM"HFOUT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTIn 2004, Canadians spent an average of $54 each on drugs to manage cholesterol levels. Virtually all of this spending was for statins (98%); most was for a single drug type, atorvastatin (57%).Provincial variation in expenditure per capita was greater for cholesterol drugs than for any other leading therapeutic category. In 2004, per capita expenditure in the provinces varied by $40 or 140%, from $29 in Saskatchewan to $69 in Quebec.The magnitude of inter-provincial variation remained relatively stable over the period. Expenditure per cap-ita was consistently highest in Quebec and lowest in Saskatchewan.%FUFSNJOBOUTPG7BSJBUJPODifferences in Volume Effects were the dominant source of provincial variation in expenditure on cho-lesterol drugs. Prescription Volume varied more for this therapeutic category than for any other. In British Columbia, only half the national average of prescrip-tions was filled. In Quebec, twice the national average was filled. Differences in Prescription Size offset some of the differences in Prescription Volume; however, residents of Saskatchewan filled fewer-than-average prescriptions of shorter-than-average length.Because one drug class (statins) dominates this thera-peutic category, there were only minor differences in Therapeutic Choices for cholesterol drugs across Can-ada. In particular, there was virtually no impact from Therapeutic Mix (selection of drug classes).Price Effects did not have a major impact on provin-cial variations in expenditure on cholesterol drugs. Saskatchewan and Quebec paid higher-than-average Prices, likely reflecting shorter-than-average Prescrip-tion Size (and therefore greater-than-average dispens-ing fees per unit of drug). Surprisingly, Prices and Prescription Size were higher than average in New Brunswick. Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$60$5411.7%-21.3%29.5%8.2%0.0%2.3%2.2%3.0%-1.7%1.3%$46$54-14.3%-14.8%-2.0%-16.8%0.0%-0.3%-0.3%4.5%-1.7%2.8%$60$5411.2%-14.1%25.9%11.8%0.1%-0.1%-0.1%0.9%-1.5%-0.5%$56$543.2%-29.4%32.5%3.1%0.2%1.4%1.5%-0.4%-1.1%-1.5%$46$54-15.0%-15.6%0.3%-15.2%0.1%0.7%0.8%0.8%-1.4%-0.6%$29$54-45.4%-20.9%-25.3%-46.2%0.1%-1.7%-1.5%5.0%-2.6%2.3%$42$54-21.1%-49.0%31.2%-17.9%0.1%0.0%0.1%-2.2%-1.2%-3.4%$37$54-30.6%-55.1%27.7%-27.4%0.0%0.7%0.7%-2.4%-1.5%-3.9%$69$5427.6%76.3%-52.3%24.0%-0.2%-1.4%-1.6%1.7%3.5%5.2%Percent difference between provincial averages and the national average of drug expenditure, 2004, cholesterol agents]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004$IPMFTUFSPM"HFOUTBritish-31%-21%3%28%-45%SaskatchewanAlbertaManitobaOntarioQuebecColumbia-15%-27%-18%-15%3% 24%-46%1%0%1%2% -2%-2%-4%-3%-1%-2% 5%2%8%0%0%1% 0%3%12%-17%2%Newfoundland andLabrador andPrince Edward I.-14%11%NewNova12%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on cholesterol agents increased by 145% from $22 in 1998 to $54 in 2004. The average annual growth rate was roughly 16%, making this the second fastest growing category of drug treatment in Canada. At prevailing rates, per capita expenditure would double every 4.7 years.Cholesterol drug expenditure increased most rapidly in Manitoba (22.9% per year) and Prince Edward Island and Newfoundland and Labrador (22.4% per year). Expenditure per capita in this therapeutic category grew least rapidly (14.3%) in Ontario.%FUFSNJOBOUTPG$IBOHFWhile rates of growth in cholesterol drug expenditure varied across provinces, determinants of change in per capita spending were relatively consistent. Expendi-ture growth in this therapeutic category is attributed almost entirely to Prescription Volume. This trend was itself driven by rapid growth in the use of statins such as atorvastatin—the world’s top-selling drug.Therapeutic Choices had a more modest impact on cholesterol drug expenditure growth. Because a single drug class dominated the therapeutic cat-egory, changes in Therapeutic Mix had little impact on expenditure inflation. Changes in Drug Mix (e.g., the choice of stains) had a more notable expendi-ture-increasing impact, contributing 2% to 5% per year to expenditure inflation. Spending growth due to Drug Mix was highest in the Atlantic Provinces, Alberta, and Saskatchewan.Price Effects generated moderate savings for both Can-ada as a whole and for each province. This was largely due to savings stemming from the use of newly avail-able generic drugs, particularly from 2003 onwards (see following pages).Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $22 $15 $14 $12 $13 $25 $29 $22 $24 $14 Per capita spending in 2004 $54 $37 $42 $29 $46 $56 $69 $60 $60 $46 Average Annual Growth (AAG) 15.7% 16.1% 19.7% 16.6% 22.9% 14.3% 15.3% 18.4% 16.3% 22.4%AAG due to prescription volume 16.2% 17.8% 17.4% 16.5% 20.8% 13.8% 16.2% 13.1% 12.7% 18.0%AAG due to prescription size -0.5% -1.4% 2.3% -0.5% -0.4% -0.3% -1.6% 3.8% 2.5% 3.2%Subtotal Volume Effects 15.7% 16.4% 19.6% 16.0% 20.4% 13.5% 14.6% 16.9% 15.2% 21.2%AAG due to therapeutic mix 0.3% 0.1% 0.2% 0.2% 0.7% 0.5% 0.2% 0.1% 0.2% 0.2%AAG due to drug mix 1.6% 1.9% 2.9% 3.6% 2.1% 2.2% 2.0% 3.7% 2.7% 4.5%Subtotal Therapeutic Choices 2.0% 2.0% 3.2% 3.8% 2.8% 2.7% 2.2% 3.8% 2.8% 4.7%AAG due to prices 0.5% 0.0% 0.0% -0.2% 1.6% 0.3% -0.2% 0.2% 1.1% 0.3%AAG due to generic use -2.4% -2.4% -3.2% -3.0% -2.0% -2.2% -1.3% -2.6% -2.7% -3.7%Subtotal Price Effects -1.9% -2.4% -3.1% -3.1% -0.4% -1.9% -1.5% -2.4% -1.7% -3.4%$IPMFTUFSPM"HFOUTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, cholesterol agents]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British16.1%19.7%14.3%15.3%16.6%SaskatchewanAlbertaManitobaOntarioQuebecColumbia22.9% Newfoundland andLabrador andPrince Edward I.22.4%16.4%19.6%20.4%13.5% 14.6%16.0%2.0%3.2%2.8%2.7% 2.2%3.8%-2.4%-3.1%-0.4%-1.9% -1.5%-3.1%16.9%2.8%4.7%-2.4%-1.7%-3.4%15.2%21.2%3.8%16.3%NewNova18.4%BrunswickScotia$IPMFTUFSPM"HFOUT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan$IPMFTUFSPM"HFOUT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes$IPMFTUFSPM"HFOUT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00-60%-50%-40%-30%-20%-10%0%10%20%30%40%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentYQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, cholesterol drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).(BTUSPJOUFTUJOBM%SVHT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTCanadians spent $45 per capita on gastrointestinal drugs in 2004, making this the fourth largest thera-peutic category in the market. Almost all of the spend-ing in this category is for gastrointestinal medicines used to treat ulcers, gastroesophageal reflux disease, and heartburn: proton pump inhibitors (80%), and H-2 receptor antagonists (10%).Gastrointestinal expenditure per capita varied signifi-cantly across provinces. In 2004, per capita expendi-ture in the provinces varied by $33 or 110%, from $29 in British Columbia to $62 in Nova Scotia. Per capita expenditure was highest in Nova Scotia from 1998 to 2004. Expenditure in British Columbia and Saskatch-ewan was consistently below the national average.%FUFSNJOBOUTPG7BSJBUJPOProvincial variation in expenditure on gastrointestinal drugs is attributed primarily to Volume Effects. Popu-lations in the Atlantic Provinces filled a greater-than-average number of prescriptions for this category of medicine, and the prescriptions they filled were much longer than average. Residents of British Columbia and Saskatchewan purchased fewer gastrointestinal drugs than the rest of Canada.Therapeutic Choices also had a significant impact on provincial differences in gastrointestinal drug expendi-ture. British Columbia, Saskatchewan, and the Atlantic Provinces had a lower cost Therapeutic Mix, reflecting the use of more low-cost gastrointestinal drug classes (e.g., H-2 receptor antagonists) than other provinces. Residents in British Columbia also received a lower cost Drug Mix within the drug classes selected.Price Effects did not contribute significantly to varia-tion in expenditure on gastrointestinal drugs. Most of the difference in Prices across provinces likely reflects differences in Prescription Size. There were also differ-ences in Generic Use, with Saskatchewan, Manitoba, and British Columbia using available generic options more often than other provinces.Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$57$4527.5%11.0%25.9%36.9%-14.3%2.8%-11.5%1.5%0.6%2.1%$47$454.5%21.2%4.5%25.7%-21.2%-1.6%-22.8%1.2%0.4%1.6%$62$4537.5%26.6%30.1%56.8%-16.7%0.7%-16.1%-3.6%0.4%-3.2%$48$457.2%-11.8%20.8%9.0%-4.0%-0.1%-4.1%1.8%0.4%2.2%$39$45-12.5%-6.6%-0.4%-7.0%-2.4%3.1%0.8%0.5%-6.7%-6.2%$31$45-31.4%-6.1%-13.3%-19.3%-11.0%-2.0%-13.0%4.3%-3.3%1.0%$47$453.9%-24.0%21.5%-2.5%3.1%4.8%7.9%-2.4%0.8%-1.6%$29$45-35.8%-29.4%14.1%-15.3%-4.0%-12.9%-17.0%-2.2%-1.3%-3.5%$47$454.6%33.9%-41.2%-7.3%9.1%1.2%10.3%0.8%0.9%1.6%Percent difference between provincial averages and the national average of drug expenditure, 2004, gastrointestinal drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004(BTUSPJOUFTUJOBM%SVHTBritish-36%4%7%5%-31%SaskatchewanAlbertaManitobaOntarioQuebecColumbia-13%-15%-3%-7%9% -7%-19%-17%8%1%-4% 10%-13%-4%-2%-6%2% 2%1%37%-16%-23%2% -3%2%57%26%-12%Newfoundland andLabrador andPrince Edward I.5%38%NewNova28%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on gastrointes-tinal drugs increased by 88% from $24 in 1998 to $45 in 2004. Expenditure per capita grew at a rate of 11% per annum, so that by 2004 total spending on gastroin-testinal drugs exceeded $1.4 billion. Growth in expenditure on gastrointestinal drugs was most rapid in Manitoba, Quebec, and Alberta. At the growth rates prevailing in those provinces, expendi-ture per capita would double every four to five years.%FUFSNJOBOUTPG$IBOHFChanges in expenditure on this therapeutic category between 1998 and 2004 reflect rapid increases in the use of proton pump inhibitors. Volume Effects dominated expenditure trends in all provinces. This was largely the effect of greater Pre-scription Volume, with notable increases in Prescrip-tion Size within some provinces. Therapeutic Choices also contributed to increased spending on this category of medicines. In all provinc-es, the trend has been toward a more costly Therapeu-tic Mix of drug classes within the gastrointestinal drug market. This reflects trends toward the use of proton pump inhibitors instead of H-2 receptor antagonists. Within either of these drug categories, however, most provinces observed a trend toward selecting a less costly Drug Mix. This trend toward lower cost Drug Mix is only found in one other leading therapeutic cat-egory: antiarthritic drugs.Price Effects had minimal impact on expenditure trends over the period of analysis. However, a generic proton pump inhibitor became available in 2004; generic sav-ings should therefore increase in the near future.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $24 $17 $21 $16 $14 $29 $20 $28 $37 $29 Per capita spending in 2004 $45 $29 $47 $31 $39 $48 $47 $57 $62 $47 Average Annual Growth (AAG) 11.2% 9.1% 14.4% 11.0% 18.1% 9.0% 14.8% 12.6% 9.1% 8.4%AAG due to prescription volume 8.0% 6.9% 7.2% 6.6% 11.4% 5.9% 12.8% 4.4% 3.2% 3.8%AAG due to prescription size 1.0% 2.2% 4.3% 0.7% 2.5% 1.1% -1.1% 4.7% 4.0% 3.8%Subtotal Volume Effects 8.9% 9.1% 11.6% 7.3% 13.9% 7.0% 11.6% 9.1% 7.2% 7.6%AAG due to therapeutic mix 4.8% 5.4% 4.8% 6.1% 5.5% 4.8% 4.7% 5.1% 4.6% 2.8%AAG due to drug mix -2.5% -5.1% -2.1% -2.4% -1.3% -3.0% -1.6% -1.5% -2.7% -2.1%Subtotal Therapeutic Choices 2.3% 0.3% 2.7% 3.7% 4.2% 1.8% 3.1% 3.6% 1.8% 0.6%AAG due to prices 0.3% -0.1% 0.3% 0.3% 1.9% 0.4% 0.2% 0.2% 0.2% 0.2%AAG due to generic use -0.3% -0.2% -0.1% -0.4% -1.8% -0.3% -0.1% -0.3% -0.2% -0.1%Subtotal Price Effects 0.0% -0.3% 0.1% -0.1% 0.0% 0.2% 0.0% -0.1% 0.0% 0.1%(BTUSPJOUFTUJOBM%SVHTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, gastrointestinal drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British9.1%14.4%9.0%14.8%11.0%SaskatchewanAlbertaManitobaOntarioQuebecColumbia18.1% Newfoundland andLabrador andPrince Edward I.8.4%9.1%11.6%13.9%7.0% 11.6%7.3%0.3%2.7%4.2%1.8% 3.1%3.7%-0.3%0.1%0.0%0.2% 0.0%-0.1%9.1%1.8%0.6%-0.1%0.0%0.1%7.2%7.6%3.6%9.1%NewNova12.6%BrunswickScotia(BTUSPJOUFTUJOBM%SVHT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan(BTUSPJOUFTUJOBM%SVHT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes(BTUSPJOUFTUJOBM%SVHT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in  expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00-50%-40%-30%-20%-10%0%10%20%30%40%50%60%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, gastrointestinal drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates)."OUJJOGFDUJWFT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTIn 2004, Canadians spent approximately $22 per capita on oral solid antiinfective drugs. Spending in this category is spread relatively evenly amongst six to ten different drug classes, the largest of which is macrolides (22%).In 2004, per capita expenditure in the provinces varied by $10 or 56%, from $18 in Saskatchewan to $28 in Prince Edward Island and Newfoundland and Labra-dor. Per capita expenditure in Prince Edward Island and Newfoundland and Labrador was consistently above the national average from 1998 to 2004. Varia-tion in expenditure among other provinces was less significant and less stable.%FUFSNJOBOUTPG7BSJBUJPOBoth Volume Effects and Therapeutic Choices contrib-uted moderately to provincial variation in oral solid antiinfective expenditure.Volume Effects had the greatest impact on provin-cial variations. In 2004, the two most significant outliers in terms of the amount of drug used from this category were Quebec (23% below average) and Prince Edward Island and Newfoundland and Labrador (43% above average).Therapeutic Choices also had a significant impact. The Therapeutic Mix of drug classes selected and the Drug Mix of products selected within drug classes were low-est in Saskatchewan, combining to make expenditure in that province approximately 19% below the national average. In Prince Edward Island and Newfoundland and Labrador, where utilization was above average, the cost of Therapeutic Choices was also below the national average (by roughly 15%).Price Effects had relatively little impact on provincial variations in expenditure on antiinfective drugs. Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$25$2211.3%8.1%6.4%14.5%3.8%-5.5%-1.7%-0.5%-1.0%-1.5%$28$2224.9%39.4%3.8%43.2%-9.2%-5.3%-14.5%-2.0%-1.8%-3.8%$24$2210.6%10.7%3.9%14.6%-1.7%-1.9%-3.6%0.4%-0.8%-0.4%$23$222.1%-2.0%5.1%3.1%-3.6%-1.5%-5.1%2.5%1.6%4.1%$23$222.8%18.1%-1.5%16.6%-9.3%-2.3%-11.6%-0.9%-1.3%-2.3%$18$22-20.1%7.1%-4.1%3.0%-12.3%-6.9%-19.2%-0.5%-3.4%-4.0%$24$2210.3%14.7%2.9%17.7%-1.8%-1.1%-2.9%-3.1%-1.3%-4.4%$20$22-10.0%-0.4%1.0%0.6%-5.5%-1.9%-7.4%-1.3%-2.0%-3.2%$21$22-4.8%-13.5%-9.2%-22.6%11.7%6.4%18.1%-0.7%0.5%-0.2%Percent difference between provincial averages and the national average of drug expenditure, 2004, antiinfective drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004"OUJJOGFDUJWFTBritish-10%10%2%-5%-20%SaskatchewanAlbertaManitobaOntarioQuebecColumbia3%1%18%17%3% -23%3%-7%-3%-12%-5% 18%-19%-3%-4%-2%4% 0%-4%15%-4%-15%-2% 0%-4%15%43%-2%Newfoundland andLabrador andPrince Edward I.25%11%NewNova11%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on oral solid antiinfective drugs increased by 14% from $19 in 1998 to $22 in 2004. The average annual growth rate for per capita expenditure was just over 2%, making this the slowest growing major therapeutic category of drugs in Canada.Notwithstanding rapid growth in Manitoba, the rate of change in expenditure on oral solid antiinfective drugs was comparable across provinces.%FUFSNJOBOUTPG$IBOHFPrescription Volume for antiinfectives displayed strong seasonality: far more prescriptions for these medicines are dispensed in the first and fourth quarter of each year, reflecting seasonality of infections often treated with oral antiinfectives.Between 1998 and 2004, Volume Effects caused annual per capita expenditure on oral solid antiinfective drugs to fall in most provinces. Except for in Saskatchewan, Manitoba, and Ontario, fewer antiinfective prescrip-tions per capita were filled in 2004 than in 1998.Despite changes in the volume of drug purchased, the cost of Therapeutic Choices increased substantially in most provinces. Most of the change in the cost of drugs selected stemmed from changes in the Therapeutic Mix of drug classes. The selection of more costly drug classes caused expenditure per capita in New Bruns-wick to rise by over 20% per year.Price Effects had relatively little impact on antiinfec-tive expenditure in the provinces. Prices increased slightly in most provinces, while increased generic substitutions generated modest savings over time.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998Per capita spending in 2004Average Annual Growth (AAG)AAG due to prescription volumeAAG due to prescription sizeSubtotal Volume EffectsAAG due to therapeutic mixAAG due to drug mixSubtotal Therapeutic ChoicesAAG due to pricesAAG due to generic useSubtotal Price Effects$19 $22 2.2%-8.4%-0.1%-8.4%9.8%1.9%11.7%2.6%-3.7%-1.1%$22 $25 2.1%-17.1%2.7%-14.4%22.1%-0.2%21.8%2.7%-8.0%-5.4%$23 $28 3.2%-3.9%-0.2%-4.2%6.4%1.2%7.7%2.6%-3.0%-0.3%$21 $24 2.8%-7.6%2.0%-5.6%8.5%1.7%10.2%1.5%-3.3%-1.7%$22 $23 0.7%2.6%0.0%2.7%-1.8%-0.3%-2.1%-0.6%0.7%0.1%$14 $23 8.8%0.7%0.2%0.9%5.6%0.5%6.1%3.3%-1.6%1.8%$17 $18 0.5%1.5%0.0%1.5%-1.0%-0.2%-1.3%-0.2%0.4%0.2%$20 $24 3.3%-3.2%1.4%-1.9%5.0%1.4%6.5%1.2%-2.5%-1.3%$16 $20 3.9%-4.5%0.8%-3.7%7.8%1.0%8.8%2.0%-3.2%-1.2%$18 $21 2.7%-4.3%-0.1%-4.4%6.4%1.9%8.3%0.6%-1.8%-1.2%"OUJJOGFDUJWFTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, antiinfective drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British3.9%3.3%0.7%2.7%0.5%SaskatchewanAlbertaManitobaOntarioQuebecColumbia8.8%-3.7%-1.9%0.9%2.7% -4.4%1.5%8.8%6.5%6.1%-2.1% 8.3%-1.3%-1.2%-1.3%1.8%0.1% -1.2%0.2%-14.4%10.2%7.7%-5.4%-1.7%-0.3%-5.6%-4.2%21.8%Newfoundland andLabrador andPrince Edward I.3.2%2.8%2.1%ScotiaNewNovaBrunswick"OUJJOGFDUJWFT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan"OUJJOGFDUJWFT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditureper capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes"OUJJOGFDUJWFT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditureper capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-2.50$-2.00$-1.50$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00-40%-30%-20%-10%0%10%20%30%40%50%60%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, antiinfective drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates)."OUJBSUISJUJDT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTCanadians spent $21 per capita on oral solid antiar-thritic medicines in 2004, making them the sixth largest therapeutic category. A vast majority of the expenditure in this category is on cyclooxygenase-2 (COX-2) inhibitors (70%) and prescription nonsteroi-dal anti-inflammatory drugs (20%).Expenditure per capita on oral solid antiarthritic medi-cines was consistently lowest in British Columbia and highest in New Brunswick.%FUFSNJOBOUTPG7BSJBUJPOThe majority of variation across provinces is attributed to differences in Volume Effects; however, Therapeu-tic Choices and Price Effects also varied.In New Brunswick, higher-than-average Prescription Volume dispensed and larger-than-average Prescrip-tion Sizes resulted in per capita expenditure that was 37% above national average. Conversely, lower-than-average Volume Effects in British Columbia resulted in per capita expenditure that was 19% below the national average.Therapeutic choices had a moderate effect on pro-vincial variations in antiarthritic expenditure per capita. Notably, a relatively inexpensive Therapeutic Mix of drug classes chosen (-11%) and the selection of a relatively inexpensive Drug Mix from within those drug classes (-3%) pushed per capita expen-diture in British Columbia even further below the national average than utilization rates alone. Most of the difference is due to lower-than-average use of COX-2 inhibitors in British Columbia.Price Effects had a modest effect on provincial varia-tion in expenditure on antiarthritic drugs. Most of this variation stemmed from differences in Prices per unit of drug, which were likely driven by differences in Prescription Size.Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$28$2136.6%9.1%28.3%37.4%3.9%-3.3%0.6%-0.2%-1.2%-1.4%$20$21-3.3%-6.9%6.9%0.0%-8.4%3.8%-4.6%3.1%-1.8%1.4%$23$2110.4%-6.7%22.1%15.3%-4.1%1.2%-2.9%-0.8%-1.2%-2.0%$22$218.8%-6.2%16.4%10.2%3.3%-4.9%-1.6%-0.6%0.7%0.2%$24$2114.1%10.0%5.7%15.7%-2.7%3.8%1.0%-0.6%-1.9%-2.6%$18$21-12.2%1.3%-10.4%-9.1%-12.0%7.2%-4.8%4.4%-2.6%1.8%$22$217.6%-17.8%21.8%4.0%-0.5%7.8%7.3%-2.6%-1.1%-3.7%$13$21-36.7%-29.9%10.6%-19.3%-11.0%-2.6%-13.6%-2.7%-1.1%-3.8%$20$21-2.6%27.6%-37.8%-10.3%1.0%0.7%1.8%4.3%1.6%5.9%Percent difference between provincial averages and the national average of drug expenditure, 2004, antiarthritic drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004"OUJBSUISJUJDTBritish-37%8%9%-3%-12%SaskatchewanAlbertaManitobaOntarioQuebecColumbia14%-19%4%16%10% -10%-9%-14%7%1%-2% 2%-5%-4%-4%-3%0% 6%2%37%-3%-5%-1% -2%1%15%0%1%Newfoundland andLabrador andPrince Edward I.-3%10%NewNova37%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on arthritis drugs more than doubled from $9 in 1998 to $21 in 2004. The average annual growth in per capita expen-diture was approximately 14%, a rate at which per capita spending doubles in five years.Despite very different levels of expenditure, growth in per capita expenditure on antiarthritic drugs was rapid in all provinces. Annual growth in spending per capita ranged from 11.7% in Saskatchewan to 18.6% in Manitoba.%FUFSNJOBOUTPG$IBOHFThe determinants of change in arthritis drug expendi-ture are relatively consistent across Canada: increases in Volume Effects and Therapeutic Choices were sig-nificant in all provinces. The volume of prescriptions dispensed increased in all provinces. The rise in Prescription Volume was par-ticularly rapid between 1999 and 2002, when COX-2 inhibitors were first launched on the Canadian market. Growth in the use of COX-2 inhibitors also had the effect of increasing Prescription Size in all provinces.The rapid uptake of COX-2 inhibitors also affected Therapeutic Choices in this category of medicine. In particular, all provinces experienced a significant increase in the cost of the Therapeutic Mix of drug classes selected because COX-2 inhibitors are more expensive than other prescription NSAIDs. Set against this trend was a slight reduction in the cost of the Drug Mix chosen from within drug classes. This trend toward a lower cost Drug Mix is only found in one other lead-ing therapeutic category: gastrointestinal drugs.Price Effects generated small savings on antiar-thritic drugs, most of which resulted from increased Generic Use.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $9 $6 $9 $9 $8 $11 $8 $12 $11 $10 Per capita spending in 2004 $21 $13 $22 $18 $24 $22 $20 $28 $23 $20 Average Annual Growth (AAG) 14.4% 13.5% 16.1% 11.7% 18.6% 12.9% 16.5% 16.0% 13.4% 12.7%AAG due to prescription volume 6.8% 5.6% 5.8% 5.4% 8.0% 5.9% 9.4% 5.2% 4.0% 3.7%AAG due to prescription size 4.9% 5.6% 7.7% 3.3% 7.4% 4.6% 4.5% 6.7% 6.2% 5.8%Subtotal Volume Effects 11.7% 11.3% 13.5% 8.7% 15.4% 10.5% 13.9% 11.9% 10.2% 9.5%AAG due to therapeutic mix 5.2% 4.4% 4.8% 4.7% 5.2% 5.9% 4.6% 7.1% 5.3% 4.9%AAG due to drug mix -0.9% -0.9% -0.7% -0.4% -2.0% -1.4% -0.5% -1.5% -1.5% -1.6%Subtotal Therapeutic Choices 4.3% 3.5% 4.1% 4.3% 3.2% 4.5% 4.1% 5.6% 3.8% 3.3%AAG due to prices -0.6% -0.2% -0.8% -0.1% 0.7% -0.8% -0.9% -0.4% 0.4% 0.4%AAG due to generic use -1.1% -1.1% -0.8% -1.2% -0.8% -1.3% -0.6% -1.1% -1.0% -0.5%Subtotal Price Effects -1.6% -1.3% -1.6% -1.3% -0.1% -2.1% -1.5% -1.5% -0.5% -0.1%"OUJBSUISJUJDTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, antiarthritic drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British13.5%16.1%12.9%16.5%11.7%SaskatchewanAlbertaManitobaOntarioQuebecColumbia18.6% Newfoundland andLabrador andPrince Edward I.12.7%11.3%13.5%15.4%10.5% 13.9%8.7%3.5%4.1%3.2%4.5% 4.1%4.3%-1.3%-1.6%-0.1%-2.1% -1.5%-1.3%11.9%3.8%3.3%-1.5%-0.5%-0.1%10.2%9.5%5.6%13.4%NewNova16.0%BrunswickScotia"OUJBSUISJUJDT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan"OUJBSUISJUJDT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes"OUJBSUISJUJDT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.001999 2000 2001 2002 2003 2004Change in  expenditureper capitaYear$-1.00$0.00$1.00$2.00$3.00$4.00$5.00$6.00-50%-40%-30%-20%-10%0%10%20%30%40%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, antiarthritic drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates)."OBMHFTJDT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTIn 2004, Canadians spent approximately $18 each on oral solid prescription analgesics. Spending in this category is spread relatively evenly across a variety of drug types, including acetaminophen with codeine (22%); synthetic narcotic analgesics such as oxyco-done (22%); antimigraine drugs (21%); and morphine (19%).In 2004, per capita expenditure in the provinces var-ied by $13 or 130%, from $10 in Saskatchewan to $23 in Alberta. Alberta had consistently higher-than-aver-age expenditure per capita and both Saskatchewan and Quebec had consistently lower-than-average expendi-ture. This is one of the few therapeutic categories in which an eastern province was consistently below the national average and a western province was consis-tently above the average.%FUFSNJOBOUTPG7BSJBUJPOAll determinants affected variation in per capita expen-diture on oral solid prescription analgesics. Volume Effects and Therapeutic Choices were most notable for wide deviations from the national average. However, Price Effects were also a significant source of variation in this therapeutic category.Deviations from the national average for Prescription Volume were particularly high for oral solid prescrip-tion analgesics. Moreover, provinces with significant-ly lower-than-average Prescription Volume—notably Saskatchewan and Quebec—also had lower-than-aver-age Prescription Size. As a result, these provinces had rates of use well below the rest of the country.These two provinces also had the highest cost Thera-peutic Choices. In particular, residents of Saskatche-wan and Quebec tended to receive a higher cost Thera-peutic Mix of drug classes from within this therapeutic category. A particularly low-cost Therapeutic Mix was found in Manitoba.Price Effects also contributed to provincial variation in per capita expenditure on oral solid prescription anal-gesics. Notably, Quebec had relatively high unit Prices (including dispensing fees) and low rates of Generic Use, whereas British Columbia had relatively low Prices and high Generic Use.Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$19$185.5%-1.6%6.0%4.3%3.4%-4.7%-1.3%2.6%-0.2%2.4%$18$18-1.3%15.3%-9.6%5.8%-2.2%-11.3%-13.5%1.8%4.6%6.5%$18$18-3.8%-22.4%16.1%-6.4%14.2%-8.6%5.7%-3.0%-0.1%-3.1%$21$1817.0%8.1%9.1%17.2%-11.5%9.0%-2.5%1.0%1.3%2.3%$16$18-10.6%6.3%6.8%13.1%-22.3%0.2%-22.1%-1.3%-0.3%-1.6%$10$18-43.4%-47.4%-5.2%-52.7%13.8%-6.6%7.2%1.0%1.2%2.2%$23$1828.6%25.9%7.5%33.4%-9.0%8.6%-0.4%-2.6%-1.8%-4.4%$17$18-5.1%10.9%7.4%18.3%-10.1%-5.4%-15.5%-4.0%-3.9%-7.9%$13$18-29.9%-23.0%-28.0%-51.1%24.1%-10.7%13.4%4.1%3.7%7.8%Percent difference between provincial averages and the national average of drug expenditure, 2004, analgesic drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004"OBMHFTJDTBritish-5%29%17%-30%-43%SaskatchewanAlbertaManitobaOntarioQuebecColumbia-11%18%33%13%17% -51%-53%-16%0%-22%-3% 13%7%-8%-4%-2%2% 8%2%4%6%-14%2% -3%7%-6%6%-1%Newfoundland andLabrador andPrince Edward I.-1%-4%NewNova6%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on analgesics doubled from $9 in 1998 to $18 in 2004. Expenditure grew at a rate of almost 12% per year.Rates of growth in expenditure on oral solid analge-sics varied considerably across Canada. Annual rates of growth in per capita expenditure ranged from 7.7% in Nova Scotia to 19.5% in Manitoba. At prevailing rates, per capita expenditure would take less than four years to double in Manitoba and almost ten years to double in Nova Scotia.%FUFSNJOBOUTPG$IBOHFDespite variation in the pace of expenditure growth across provinces, the determinants of change were relatively consistent. Nationally, and for all provinc-es except Saskatchewan and Manitoba, Therapeutic Choices had a greater impact on expenditure inflation than did Volume Effects.Volume Effects had a notable impact on overall expen-diture. Each year between 1998 and 2004, Volume Effects increased per capita expenditures by just over 2% in Nova Scotia and Ontario to over 9% in Mani-toba. The remaining provinces experienced approxi-mately 4% to 5% annual growth in per capita analgesic drug expenditure due to Volume Effects.Changes in the Therapeutic Mix of drug classes select-ed from within the analgesic therapeutic category increased per capita expenditure in the non-Atlan-tic provinces by roughly 4% per year. This reflects increased use of narcotic oral analgesics versus non-narcotic oral analgesics. Changes in the Drug Mix within drug classes contributed between 1% to 4% to annual expenditure inflation in the non-Atlantic prov-inces. In the Atlantic provinces, Drug Mix contributed approximately 4% to 5% to annual drug expenditure growth, whereas Therapeutic Mix contributed 2.6% or less.With the exception of rapid price increases in Mani-toba, Price Effects contributed relatively little to trends in per capita expenditure on oral solid analgesics.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $9 $9 $12 $5 $6 $11 $6 $10 $11 $10 Per capita spending in 2004 $18 $17 $23 $10 $16 $21 $13 $19 $18 $18 Average Annual Growth (AAG) 11.8% 11.5% 12.5% 13.2% 19.5% 11.1% 12.4% 12.1% 7.7% 10.2%AAG due to prescription volume 2.4% 3.5% 2.5% 5.8% 6.4% 1.0% 3.9% 3.1% -1.2% 1.5%AAG due to prescription size 1.8% 2.3% 2.8% 1.5% 2.7% 1.5% 1.7% 1.6% 3.3% 2.5%Subtotal Volume Effects 4.2% 5.7% 5.3% 7.3% 9.2% 2.5% 5.6% 4.7% 2.1% 4.0%AAG due to therapeutic mix 3.9% 3.9% 3.7% 3.9% 4.3% 3.4% 4.8% 2.6% 2.3% 1.2%AAG due to drug mix 3.0% 1.8% 3.6% 2.8% 2.3% 4.1% 1.1% 4.5% 5.3% 5.0%Subtotal Therapeutic Choices 6.9% 5.7% 7.4% 6.8% 6.5% 7.5% 5.9% 7.0% 7.6% 6.3%AAG due to prices 1.3% 0.8% 0.3% -0.1% 4.9% 1.6% 1.5% 1.1% -0.1% 1.5%AAG due to generic use -0.6% -0.7% -0.5% -0.9% -1.2% -0.5% -0.6% -0.8% -1.9% -1.5%Subtotal Price Effects 0.7% 0.1% -0.2% -1.0% 3.7% 1.1% 0.9% 0.3% -2.0% 0.0%"OBMHFTJDTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, analgesic drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British11.5%12.5%11.1%12.4%13.2%SaskatchewanAlbertaManitobaOntarioQuebecColumbia19.5%5.7%5.3%9.2%2.5% 5.6%7.3%5.7%7.4%6.5%7.5% 5.9%6.8%0.1%-0.2%3.7%1.1% 0.9%-1.0%4.7%7.6%6.3%0.3%-2.0% 0.0%2.1%4.0%7.0%Newfoundland andLabrador andPrince Edward I.10.2%7.7%12.1%ScotiaNewNovaBrunswick"OBMHFTJDT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan"OBMHFTJDT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes"OBMHFTJDT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.501999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50-50%-40%-30%-20%-10%0%10%20%30%40%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentYQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, analgesic drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates)./FVSPMPHJDBMT&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTCanadians spent an average of $18 per capita on neuro-logical drugs in 2004. Most of this expenditure was on drugs to manage seizure disorders (60%); Alzheimer’s disease and dementia (24%); and Parkinson’s disease (10%).In 2004, per capita expenditure in the provinces var-ied by $7 or 54%, from $13 in Prince Edward Island and Newfoundland and Labrador to $20 in Mani-toba and Quebec.Provincial variation in neurological drug expendi-ture increased over the period from 1998 to 2004, with Saskatchewan and Prince Edward Island and Newfoundland and Labrador trending below the national average.%FUFSNJOBOUTPG7BSJBUJPOAll determinants affected provincial variation in per capita expenditure on neurological drugs.Volume Effects had a significant impact on differ-ences in per capita expenditures across provinces. The individual differences in Prescription Volume and Prescription Size were greater than the combined dif-ferences in these Volume Effects because provinces tended to either prescribe fewer, longer prescriptions or more, shorter prescriptions. Notwithstanding this, differences in the volume of neurologicals purchased drove per capita expenditures in Manitoba and Quebec significantly above the national average.Therapeutic Choices added to variations in per capita expenditure on neurological drugs across provinces. Notably, the mix of both drug classes and specific drugs (Therapeutic Mix and Drug Mix) was less costly in Prince Edward Island and Newfoundland and Lab-rador than in the rest of Canada. In contrast to all other provinces, in Ontario, the Therapeutic Mix of neu-rological drug classes used was more costly than the national average.Price Effects caused some variation in per capita expenditure on neurological drugs. Quebec had rela-tively high unit Prices (including dispensing fees) and low rates of Generic Use.Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$18$183.9%-16.3%35.7%19.4%-5.7%-7.9%-13.6%-0.3%-1.6%-1.9%$13$18-24.6%-27.9%21.7%-6.2%-6.8%-12.3%-19.1%1.7%-1.0%0.7%$18$182.1%-35.6%43.3%7.7%-1.2%-3.2%-4.3%0.0%-1.1%-1.2%$16$18-8.7%-30.9%17.1%-13.8%9.4%-3.9%5.5%0.5%-0.9%-0.4%$20$1813.6%1.3%19.6%21.0%-6.6%0.8%-5.8%0.5%-2.0%-1.5%$15$18-15.7%-32.0%17.8%-14.2%-2.9%6.2%3.3%0.1%-4.9%-4.8%$16$18-7.1%-23.1%24.7%1.6%-10.0%4.4%-5.5%-1.8%-1.3%-3.1%$18$183.4%-7.9%10.2%2.3%-4.6%8.5%4.0%-1.8%-1.1%-2.9%$20$1816.8%57.3%-40.1%17.1%-4.2%-1.6%-5.8%1.9%3.7%5.5%Percent difference between provincial averages and the national average of drug expenditure, 2004, neurological drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004/FVSPMPHJDBMTBritish3%-7%-9%17%-16%SaskatchewanAlbertaManitobaOntarioQuebecColumbia14%2%2%21%-14% 17%-14%4%-6%-6%6% -6%3%-3%-3%-2%0% 6%-5%19%-4%-19%-2% -1%1%8%-6%-14%Newfoundland andLabrador andPrince Edward I.-25%2%NewNova4%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on neurologi-cal drugs more than doubled from $8 in 1998 to $18 in 2004. Expenditure grew at a rate of 15% per year, making neurologicals the third fastest growing thera-peutic category of medicines in this analysis. Per capita spending increased most rapidly in Manito-ba, Quebec, and Alberta; it grew least rapidly in Prince Edward Island and Newfoundland and Labrador and Saskatchewan.%FUFSNJOBOUTPG$IBOHFNationally, and for all provinces except for British Columbia, Alberta and Manitoba, Therapeutic Choices had a more significant impact on expenditure inflation than Volume Effects.Despite the role of Therapeutic Choices on expen-diture trends, Prescription Volume was an important expenditure-driver in this therapeutic category. Pre-scription Volume increased in all provinces. This was partially offset in some provinces by a reduc-tion in Prescription Size. Combined, these Volume Effects increased per capita expenditure on neuro-logical drugs at annual rates ranging from 5.1% in Ontario to 11.7% in Manitoba.Therapeutic Choices contributed almost 10% per year to national expenditure inflation within this drug cat-egory. Changes in the Therapeutic Mix of drug classes selected from within the neurological category had a modest impact on expenditure growth (1.1% to 5.5% per year across provinces). Changes in the Drug Mix within specific classes of neurological drug had a more significant impact on expenditure growth (3.9% to 7.6% per year across provinces). Most of this impact stemmed from the mix of drugs selected, specifically, the increased use of clonazepam.Owing largely to Generic Use, Price Effects caused a decline in per capita expenditure on neurological drugs in all provinces.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $8 $9 $7 $8 $7 $7 $8 $8 $9 $8 Per capita spending in 2004 $18 $18 $16 $15 $20 $16 $20 $18 $18 $13 Average Annual Growth (AAG) 15.2% 13.3% 16.0% 11.5% 19.5% 15.3% 16.5% 14.1% 12.8% 9.2%AAG due to prescription volume 9.6% 10.1% 8.8% 6.8% 11.0% 8.6% 11.6% 5.9% 3.9% 2.3%AAG due to prescription size -3.0% -1.4% 2.7% -0.1% 0.7% -3.5% -4.8% 1.8% 2.1% 3.0%Subtotal Volume Effects 6.6% 8.6% 11.5% 6.7% 11.7% 5.1% 6.8% 7.6% 6.0% 5.3%AAG due to therapeutic mix 3.5% 1.1% 1.4% 1.6% 1.3% 5.5% 3.5% 2.4% 2.8% 2.1%AAG due to drug mix 6.3% 5.8% 5.7% 5.8% 7.1% 5.7% 7.6% 6.1% 5.7% 3.9%Subtotal Therapeutic Choices 9.7% 6.9% 7.1% 7.4% 8.3% 11.2% 11.0% 8.5% 8.5% 6.0%AAG due to prices 0.5% 0.1% -0.3% -0.3% 1.1% 0.6% 0.4% 0.2% 0.2% -0.4%AAG due to generic use -1.7% -2.2% -2.4% -2.4% -1.7% -1.6% -1.7% -2.2% -1.9% -1.6%Subtotal Price Effects -1.1% -2.2% -2.7% -2.6% -0.6% -1.0% -1.2% -2.0% -1.7% -2.0%/FVSPMPHJDBMTMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, neurological drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British13.3%16%15.3%16.5%11.5%SaskatchewanAlbertaManitobaOntarioQuebecColumbia19.5% Newfoundland andLabrador andPrince Edward I.9.2%8.6%11.5%11.7%5.1% 6.8%6.7%6.9%7.1%8.3%11.2% 11.0%7.4%-2.2%-2.7%-0.6%-1% -1.2%-2.6%7.6%8.5%6%-2%-1.7%-2%6%5.3%8.5%12.8%NewNova14.1%BrunswickScotia/FVSPMPHJDBMT] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan/FVSPMPHJDBMT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes/FVSPMPHJDBMT1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-1.00$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00-30%-25%-20%-15%-10%-5%0%5%10%15%20%25%30%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, neurological drugs] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).)PSNPOFTBOE3FMBUFE5IFSBQZ&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTCanadians spent $17 per capita on oral solid hormones and related therapies in 2004. Two-thirds of the spend-ing in this category was on drugs to treat osteoporosis (67%). Most of the remaining expenditure was on hor-mone replacement therapy. (Oral contraceptives are not included in this category.)In 2004, per capita expenditure in the provinces varied by $12 or 120%, from $10 in Prince Edward Island and Newfoundland and Labrador to $22 in Quebec. Expenditure per capita in Quebec was consistently above national average from 1998 to 2004.%FUFSNJOBOUTPG7BSJBUJPOProvincial variations in per capita expenditure on oral solid prescription hormones were driven primarily by Volume Effects. For example, residents of Quebec received far more (though shorter) prescriptions from this therapeutic category than residents in other provinces. In contrast, residents of Saskatchewan filled far fewer (and short-er) prescriptions than did residents in other provinces.Therapeutic Choices also played an important role in determining relative expenditure per capita across provinces. In comparison to Ontario, Alberta, and Sas-katchewan, the Therapeutic Mix of drug classes from which patients were prescribed treatment was less costly in other provinces. This reflects the fact that a higher-than-average share of oral solid hormone pre-scriptions in Ontario and Alberta are for osteoporosis (bone density drugs) rather than other drugs in this class (hormone replacement therapy).Variation in prices of oral solid prescription hormones varied significantly, with the Prices of drugs (includ-ing dispensing fees) much higher in Saskatchewan and Ontario than in the rest of Canada.Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$15$17-8.2%-26.3%26.9%0.5%-11.0%2.8%-8.1%-0.5%-0.2%-0.6%$10$17-37.4%-33.9%10.6%-23.3%-12.1%-2.7%-14.8%0.5%0.2%0.7%$14$17-15.5%-38.7%27.4%-11.2%-4.7%1.9%-2.8%-1.4%-0.1%-1.5%$17$17-0.4%-36.4%18.2%-18.2%12.2%-3.0%9.2%9.2%-0.6%8.5%$13$17-20.4%-24.6%6.1%-18.4%-6.4%3.9%-2.5%0.8%-0.4%0.5%$12$17-30.3%-25.8%-18.0%-43.8%3.0%-1.0%2.0%11.8%-0.3%11.5%$15$17-10.4%-37.0%30.8%-6.2%3.3%-2.8%0.5%-4.5%-0.1%-4.6%$12$17-28.0%-39.5%27.8%-11.7%-2.6%-6.0%-8.6%-7.2%-0.5%-7.7%$22$1733.8%81.2%-42.8%38.4%-8.2%1.0%-7.2%1.4%1.1%2.6%Percent difference between provincial averages and the national average of drug expenditure, 2004, hormones]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004)PSNPOFTBOE3FMBUFE5IFSBQZBritish-28%-10%0%34%-30%SaskatchewanAlbertaManitobaOntarioQuebecColumbia-20%-12%-6%-18%-18% 38%-44%-9%1%-3%9% -7%2%-8%-5%1%9% 3%12%1%-3%-15%-1% -2%1%-11%-23%-8%Newfoundland andLabrador andPrince Edward I.-37%-16%NewNova-8%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on hormones and related therapies increased by almost 90% from $9 in 1998 to $17 in 2004. Expenditure grew at close to 12% per year.The annual rate of growth in hormone expenditure per capita between 1998 and 2004 varied considerably across provinces. Expenditure per capita grew most rapidly in Manitoba (17.6% per year), followed by Quebec (12.6%). Expenditure growth was slowest in Saskatchewan (6.8%). %FUFSNJOBOUTPG$IBOHFVolume Effects had a modest impact on expenditure in all provinces. This expenditure-determinant had an inflationary impact on per capita expenditure from 1998 to 2002, after which Prescription Volume declined. The average size of prescriptions dispensed increased in all provinces except British Columbia. The rate at which prescription size increased is particularly nota-ble in Saskatchewan—the change resulting from a sudden, one-time shift in prescription size in 2002.Nationally and for all provinces, Therapeutic Choic-es among oral solid hormone drugs were the largest determinant of drug expenditure inflation over the period. Changes in the Therapeutic Mix of drug classes selected was the primary cause of cost increase stem-ming from Therapeutic Choices. This trend captures the increased utilization of bone metabolism drugs for the treatment of osteoporosis.Price Effects had a modest to significant impact on provincial expenditure from 1998 to 2004. Savings stemming from the use of generic hormone drugs were moderate, ranging from –0.1% to –0.5% per year across provinces. However, falling prices (including dispensing fees) generated substan-tial annual savings in Saskatchewan, Quebec, and Ontario. All three of these provinces experienced a significant increase in Prescription Size during the study period, which has the effect of reducing unit prices that include dispensing fees.Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $9 $7 $8 $8 $5 $9 $11 $9 $8 $6 Per capita spending in 2004 $17 $12 $15 $12 $13 $17 $22 $15 $14 $10 Average Annual Growth (AAG) 11.5% 9.8% 10.7% 6.8% 17.6% 11.3% 12.6% 9.9% 10.5% 9.6%AAG due to prescription volume 1.5% 1.3% 0.0% -0.2% 4.9% 0.5% 2.9% -1.9% -1.8% -3.4%AAG due to prescription size 0.8% -0.8% 4.6% 14.4% 1.5% 8.2% 7.0% 2.5% 2.2% 2.4%Subtotal Volume Effects 2.3% 0.5% 4.6% 14.2% 6.4% 8.7% 9.8% 0.6% 0.4% -1.0%AAG due to therapeutic mix 9.4% 6.1% 6.6% 5.8% 8.8% 9.1% 10.3% 8.4% 8.6% 8.2%AAG due to drug mix 1.0% 1.9% 0.8% 0.1% 0.0% 1.5% 0.5% 0.5% 1.1% 0.8%Subtotal Therapeutic Choices 10.4% 8.0% 7.4% 5.9% 8.8% 10.5% 10.7% 8.8% 9.6% 9.0%AAG due to prices -0.9% 1.8% -1.0% -13.0% 2.8% -7.5% -7.9% 0.7% 0.7% 2.0%AAG due to generic use -0.3% -0.5% -0.3% -0.2% -0.4% -0.4% -0.1% -0.3% -0.3% -0.4%Subtotal Price Effects -1.2% 1.3% -1.3% -13.3% 2.4% -7.9% -8.0% 0.4% 0.4% 1.6%)PSNPOFTBOE3FMBUFE5IFSBQZMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, hormones]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-2004British9.8%10.7%11.3%12.6%6.8%SaskatchewanAlbertaManitobaOntarioQuebecColumbia17.6% Newfoundland andLabrador andPrince Edward I.9.6%0.5%4.6%6.4%8.7% 9.8%14.2%8%7.4%8.8%10.5% 10.7%5.9%1.3%-1.3%2.4%-7.9% -8%-13.3%0.6%9.6%9%0.4%0.4%1.6%0.4%-1%8.8%10.5%NewNova9.9%BrunswickScotia)PSNPOFTBOE3FMBUFE5IFSBQZ] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan)PSNPOFTBOE3FMBUFE5IFSBQZ1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes)PSNPOFTBOE3FMBUFE5IFSBQZ1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-4.00$-3.00$-2.00$-1.00$0.00$1.00$2.00$3.00$4.00-50%-40%-30%-20%-10%0%10%20%30%40%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, hormones] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDILevel of Per Capita Expenditure, 2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).%JBCFUFT5IFSBQZ&YQFOEJUVSF-FWFMTBOE7BSJBUJPOTIn 2004, Canadians spent $13 per capita on oral solid prescription drugs for diabetes. All of this spending is for medicines commonly used to treat type-2 diabetes. The level of per capita expenditure on diabetes therapy varied considerably across provinces. In 2004, per capita expenditure in the provinces var-ied by $8 or 88%, from $9 in British Columbia to $17 in New Brunswick.%FUFSNJOBOUTPG7BSJBUJPOAll determinants affected provincial variation in per capita expenditure on oral solid diabetes therapies.As with other therapeutics categories, there was an inverse relationship between the Prescription Volume and Prescription Size. After accounting for this rela-tionship, British Columbia, Alberta, and Saskatchewan consumed fewer oral solid diabetes therapies than the Canadian average. Volume Effects were considerably lower in British Columbia and Saskatchewan when compared to other provinces. Therapeutic Choices also contributed to provincial variation in per capita expenditure on oral solid diabe-tes treatments. Owing to the fact that oral solid diabe-tes treatments are a portion of a much larger therapeu-tic category, the group of oral solid diabetes drugs is comprised largely of a single drug class: medicines for type-2 diabetes. As a result, the impact of Therapeutic Choices comes by way of the Drug Mix, the selection of specific types of drugs within that drug class.The unit Prices paid for diabetes drugs varied consid-erably across provinces. This likely reflects the impact of Prescription Size on average prices (including dis-pensing fees). Residents of Saskatchewan had a high-er-than-average rate of Generic Use from within this therapeutic category. Variable BC AB SK MB ON QC NB NS PEI/NLPer capita spending in provincePer capita spending in CanadaTotal DifferenceDifference due to prescription volumeDifference due to prescription sizeSubtotal Volume EffectsDifference due to therapeutic mixDifference due to drug mixSubtotal Therapeutic ChoicesDifference due to pricesDifference due to generic useSubtotal Price Effects$17$1326.1%-19.6%26.7%7.1%-1.5%23.1%21.6%-1.4%-1.2%-2.6%$12$13-9.9%-8.1%3.1%-5.0%-0.1%-2.0%-2.2%-2.1%-0.7%-2.8%$15$1311.1%-14.5%20.9%6.5%0.3%8.0%8.4%-2.4%-1.3%-3.7%$13$13-1.6%-22.4%25.7%3.3%0.7%-5.8%-5.1%-0.1%0.3%0.2%$14$137.0%11.6%-5.3%6.3%-0.6%-0.2%-0.8%2.0%-0.5%1.5%$10$13-22.7%-21.9%-1.7%-23.5%-10.6%21.0%10.4%2.8%-12.4%-9.6%$14$136.8%-40.7%30.9%-9.9%-0.2%22.9%22.7%-5.1%-0.9%-6.1%$9$13-30.2%-42.5%25.6%-16.9%-1.1%-5.0%-6.1%-6.3%-0.8%-7.2%$15$1315.2%59.5%-51.9%7.6%-0.8%-1.3%-2.0%7.3%2.4%9.7%Percent difference between provincial averages and the national average of drug expenditure, 2004, diabetes drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Variation, 2004-40%-30%-20%-10%-5%0%+5%+10%+20%+30%+40%Percent variation fromthe mean national level of per capita expenditure, 2004Determinants of Variation in Per Capita Expenditure, 2004%JBCFUFT5IFSBQZBritish-30%7%-2%15%-23%SaskatchewanAlbertaManitobaOntarioQuebecColumbia7%-17%-10%6%3% 8%-24%-6%23%-1%-5% -2%10%-7%-6%2%0% 10%-10%7%8%-2%-3% -4%-3%7%-5%22%Newfoundland andLabrador andPrince Edward I.-10%11%NewNova26%BrunswickScotia] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDIChange in Per Capita Expenditure, 1998-2004Authors’ calculations based on IMS Health (Canadian CompuScript Audit) and Statistics Canada (Population Estimates).1BDFPG$IBOHFUPAcross Canada, per capita expenditure on oral solid diabetes therapy increased by more than 200% from $4 in 1998 to $13 in 2004. While per capita expendi-ture on this drug category was the lowest among the top ten therapeutic categories, the rate of expenditure growth was the fastest. Annual growth in expenditure on oral solid diabetes drugs varied from 17.5% in Nova Scotia to 32% in Manitoba. %FUFSNJOBOUTPG$IBOHFDeterminants of change in per capita spending were relatively consistent across provinces: Volume Effects and Therapeutic Choices were significant in all provinces.Prescription Volume and Prescription Size increased in all provinces (except for Quebec, where prescription size fell slightly). Combined, these Volume Effects caused per capita expenditure on oral solid diabetes drugs to increase at rates ranging from 10.9% per year in Nova Scotia to 20.5% per year in Manitoba. At the latter rate, expenditure per capita would double in less than four years.Because a single class of drugs dominates this thera-peutic category, changes in Therapeutic Mix are incon-sequential. However, changes in the Drug Mix select-ed to treat type-2 diabetes had a significant impact on spending trends. Specifically, increased use of rosigli-tazone and pioglitazone drove changes in Drug Mix.The impact of Price Effects on per capita expenditure was modest over the period of study and across prov-inces. Most provinces experienced a small decline in Prices and increase in savings from Generic Use. Variable Canada BC AB SK MB ON QC NB NS PEI/NLPer capita spending in 1998 $4 $3 $3 $3 $3 $4 $5 $4 $6 $4 Per capita spending in 2004 $13 $9 $14 $10 $14 $13 $15 $17 $15 $12 Average Annual Growth (AAG) 22.0% 20.5% 26.8% 24.4% 32.0% 22.6% 19.4% 26.9% 17.5% 21.2%AAG due to prescription volume 12.3% 13.2% 13.6% 14.0% 18.6% 10.9% 13.5% 8.7% 6.5% 7.4%AAG due to prescription size 2.0% 2.2% 6.1% 2.1% 1.9% 3.7% -1.5% 7.2% 4.4% 6.7%Subtotal Volume Effects 14.2% 15.4% 19.7% 16.0% 20.5% 14.6% 12.0% 16.0% 10.9% 14.2%AAG due to therapeutic mix -0.9% -0.5% -1.2% -1.2% -1.4% -0.3% -0.7% -0.6% 0.3% -0.1%AAG due to drug mix 10.1% 6.8% 11.0% 13.5% 11.2% 9.2% 9.1% 14.2% 8.8% 9.7%Subtotal Therapeutic Choices 9.1% 6.2% 9.8% 12.3% 9.8% 8.9% 8.4% 13.6% 9.0% 9.5%AAG due to prices -0.7% -0.1% -1.1% -0.6% 2.4% -0.6% -0.5% -1.9% -0.9% -2.0%AAG due to generic use -0.7% -1.0% -1.6% -3.3% -0.6% -0.2% -0.5% -0.8% -1.5% -0.5%Subtotal Price Effects -1.3% -1.1% -2.7% -3.9% 1.7% -0.9% -1.0% -2.7% -2.4% -2.5%%JBCFUFT5IFSBQZMagnitude and determinants of change in per capita spending on oral solid prescription drugs among Canadian provinces, 1998-2004, diabetes drugs]$BOBEJBO3Y"UMBTPrice EffectsTherapeutic ChoicesVolume EffectsOverall Growth Rate, 1998-200410% 12% 14% 16% 18% 20%Average annual growth rate inper capita expenditure, 1998-2004Percent change in drivers of per capita expenditure, 1998-2004+9%+12%+15%+18%+21%+3%+6%0%-2%Determinants of Change in Per Capita Expenditure, 1998-200426.8%22.6%19.4%24.4%SaskatchewanAlbertaManitobaOntarioQuebec32.0%17.5%NewNovaNewfoundland andLabrador andPrince Edward I.26.9%21.2%BrunswickScotia15.4%19.7%20.5%14.6% 12%16%6.2%9.8%9.8%8.9% 8.4%12.3%-1.1%-2.7%1.7%-0.9% -1.0%-3.9%16.0%9%9.5%-2.7%-2.4%-2.5%10.9%14.2%13.6%British20.5%Columbia%JBCFUFT5IFSBQZ] $FOUSFGPS)FBMUI4FSWJDFTBOE1PMJDZ3FTFBSDICanadaQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Generic usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changesManitobaAlbertaBritish ColumbiaOntarioSaskatchewan%JBCFUFT5IFSBQZ1999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00]$BOBEJBO3Y"UMBTQuarterly Trends in Per Capita Expenditure Levels and Variations, 1998-2004Nova ScotiaNew BrunswickPEI/Newfoundland & LabradorQuebecGeneric usePrescription sizeTherapeutic mixPrescription volumeTotal changeDrug mixPrice changes%JBCFUFT5IFSBQZ1999 2000 2001 2002 2003 2004Change in  expenditureper capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.001999 2000 2001 2002 2003 2004Change in expenditure per capitaYear$-0.50$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00-50%-40%-30%-20%-10%0%10%20%30%40%50%PEI / New. & Lab.Nova ScotiaNew BrunswickQuebecOntarioManitobaSaskatchewanAlbertaBritish Columbia1999 2000 2001 2002 2003 2004PercentQuarterly differences between provincial and national levels of per capita expenditure, 1998-2004, diabetes drugs

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