According to a report released Thursday by the Canadian Institute for Health Information spending on drugs in Canada rose to $29.8 billion or $897 per person in 2008.

As per the report drug spending last year accounted for 17.4% of the total spending on health which was almost double since 1985 when it was at 9.5 %. This made it the fasted rising expense in health care in the past decade.

"Over the last 20 years, drugs have consistently remained one of the major cost drivers in health care," said CIHI spokesman Michael Hunt. "Spending on pharmaceuticals has more than doubled over the past 10 years, outpacing growth in health spending by hospitals, physicians and other health professionals."

The study looked at spending under both private and public prescription plans and found that in 2008 prescription medications accounted for an estimated 84 % of the total drug expenditures.  The spending on prescription drugs grew at 9 % as compared to a 4.6 % growth in non-prescription drugs.

Private spending for the third consecutive year grew at a faster rate than the public sector and according to the report private sector prescribed drug expenditures reached $12.6 billion in 2007, and is forecast to have reached $14.0 billion in 2008. Public-sector expenditure on prescribed drugs reached $10.5 billion in 2007, and is forecast to have hit $11.2 billion in 2008.

Looking at the numbers at a national level, when you're increasing spending by more than $2 billion a year (on drugs), it's certainly something that needs attention," Hunt said.

The CIHI study said that Canada in 2006 at $770 had the second-highest level of total drug expenditures per capita after the United States at $1,015. Belgium was third among countries in the Organization for Economic Co-operation and Development at $703.

Giving a statewide break-up the report said that in 2008, per capita spending on prescription drugs varied by province as follows: $896 in Newfoundland and Labrador; $889 in P.E.I; $1,029 in Nova Scotia; $953 in New Brunswick; $963 in Quebec; $924 in Ontario; $835 in Manitoba; $824 in Saskatchewan; $806 in Alberta; $773 in B.C.; $803 in Yukon; $612 in N.W.T. and $758 in Nunavut.

"The economic downturn is resulting in many Canadians losing their jobs. Since many Canadians have private health insurance through their employment it may also mean a loss of private health insurance," said Hunt. "In light of this situation, it will be important to document what the impact will be on both the public sector as well as out-of-pocket drug spending over the next few years."

The Canadian Institute for Health Information is a not-for-profit, independent organization that collects and analyzes information on health and health care in Canada.

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