expenditures were hospitals—$51B in 2009 up from $45.4B, representing 28.2% in 2007, followed by pharmaceuticals—$30B in 2009 up from $26.5B, representing 16.5% in 2007, and physician services—$26B in 2009, up from $21.5B or 13.4% in 2007. The proportion spent on hospitals and physicians has declined between 1975 and 2009 while the amount spent on pharmaceuticals has increased. Of the three biggest health care expenses, the amount spent on pharmaceuticals has increased the most. In 1997, the total price of drugs surpassed that of doctors. In 1975, the three biggest health costs were hospitals ($5.5B/44.7%), physicians ($1.8B/15.1%), and medications ($1.1B/8.8%). By 2018, drugs (both prescription and non-prescription) had become the second largest expenditure representing 15.3% of the total, hospitals at 26.6% represented the largest sector by expenses, and physician services represented 15.1% of the total. Hospitals Hospitals have consistently been the top healthcare expenditure representing 26.6% of total healthcare expenditures in Canada in 2018. Hospital care is delivered by publicly funded hospitals in Canada. Most of the public hospitals, each of which are independent institutions incorporated under provincial Corporations Acts, are required by law to operate within their budget. Amalgamation of hospitals in the 1990s has reduced competition between hospitals. An OECD study in 2010 noted that there were variations in care across the different provinces in Canada. The study found that there was a difference in hospital admission rates depending on the number of people and what province they lived in. Typically, provinces with low population counts had higher hospital admission rates due to there being a lack of doctors and hospitals in the region. Pharmaceuticals By 2018, drugs—both prescription and non-prescription—were the second largest healthcare expenditure in Canada at 15.3% of the total. According to the December 2020 CIHI report, in 2019 public drug programs expenditures were $15 billion, representing a one-year increase of 3%. The drug that contributed to about 26% of the increase in spending were drugs for diabetes. In 2018, hepatitis C drugs were the 2nd highest contributor to increase in pharmaceutical spending. In 2019, this decreased by 18% as fewer people took these drugs. In 2019, spending on biologics increased from 9% to 17% of public spending for treatment of rheumatoid arthritis, Crohn's disease and similar conditions. By 1997, the total cost of pharmaceuticals surpassed the total cost of physician services and has remained in second place, after hospitals in terms of total annual health