Healthy Skepticism Library item: 2178

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Publication type: news

Kennedy M.
Rock may limit drugs covered by medicare
Ottawa Citizen 2001 Aug 11

Abstract:

Considers a change to the way drugs are approved

Full text:

Federal Health Minister Allan Rock is contemplating a controversial change to the drug regulatory process to control medicare’s burgeoning costs of new prescription drugs, it has been learned.

At a meeting of federal-provincial health ministers next month in Newfoundland, Mr. Rock will urge his counterparts to find ways to ensure public spending on pharmaceuticals is “cost effective.”

One of several possible approaches is the creation of an advisory council that would examine whether so-called me-too drugs — new pharmaceuticals that offer only marginally improved benefits over existing drugs but carry a much higher price tag — should be publicly insured.

The panel, modelled on a similar citizens’ group established by Australia, would consist of medical ethicists, patients’ representatives, doctors, pharmacists, bureaucrats and health care economists.

Its job would be to conduct cost-benefit analyses of new drugs and deliver the findings to the provinces, which would collectively decide whether to include the products in their list of insured drugs, known as formularies.

Provinces cover the cost of drugs administered in hospital. They also have drug benefit programs for pharmaceuticals administered out of hospital to the elderly and to welfare recipients.

But drug costs have soared in recent years — mainly because of increased use and the introduction of new drugs.

In an interview with the Ottawa Citizen, Mr. Rock revealed how he believes the federal government can help.

“I’m putting on the agenda for the September health ministers conference a proposal to change the way we approve new drugs in Canada so that we would no longer look just at safety and efficacy — as we have done traditionally — but we’d add a third factor — cost-effectiveness.

“We’d have some mechanism for assessing the marginal increase in effectiveness of a new pharmaceutical product measured against products already on the market, already in the formularies, in order to avoid the situation where we approve me-too drugs that are marginally more effective, but much more costly, thus driving up the costs of pharmaceuticals.”

He has been informally broaching the subject with his provincial counterparts for several months and is sensitive to possible complaints of federal intrusion in the provincial health care domain.

At the same time, he is aware of a recent trend that frustrates all provinces: When a new me-too drug comes on the market, all provinces are pressed to include it in their formularies.

Once one health ministry yields to the pressure, the others fall like dominoes. At their annual meeting last week, the 10 premiers agreed to focus on “developing constructive approaches” to four key areas of health care including “pharmaceutical management.”