BC Moves to Pay Less for Common Prescription Drugs

Decision draws 'not unexpected' criticism from Big Pharma, says health minister.

By Andrew MacLeod 21 May 2016 |

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria and the author of A Better Place on Earth: The Search for Fairness in Super Unequal British Columbia (Harbour Publishing, 2015). Find him on Twitter or reach him here.

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Health Minister Terry Lake: 'We know the pharmaceutical industry doesn't like it when we take steps like this to reduce costs for taxpayers.'

The British Columbia government has quietly reduced what it will pay for certain common prescription drugs starting in June, a move that has drawn heavy criticism from Canada's pharmaceutical industry.

"It's not unexpected," said Health Minister Terry Lake. "We know the pharmaceutical industry doesn't like it when we take steps like this to reduce costs for taxpayers."

In December, the B.C. cabinet passed an order that will extend the reference-based pricing program to frequently prescribed medicines for high blood pressure, high cholesterol, and gastrointestinal issues. The newly included drugs include angiotensin receptor blockers, proton pump inhibitors, and statins.

Under the Reference Drug Program, which has covered half-a-dozen classes of drug since the 1990s, when more than one drug is available to treat a condition, the provincial drug plan PharmaCare will pay for the one that costs the least -- known as the "reference drug" -- as long as there's evidence that it's as effective as the higher-cost option.

Lake said the change is expected to save PharmaCare $9 million a year, which will help pay for new areas of coverage such as providing insulin pumps to people up to age 25 and paying for new hepatitis C drugs.

"We've looked at [extending the program] in the past," Lake said. "Decisions weren't made to expand the program. Over my three years, we've looked at ways we can free up room in the PharmaCare budget to cover other things."

He said there would be a transition period so that people already on a drug that will no longer be covered won't have to switch, and so that the ministry can make sure physicians are aware of the process. "We want to make sure we're not impacting patient care," he said.

Patients or patents?

The Ottawa-based industry group Innovative Medicines Canada has launched a campaign called "Patients Come First," asking people to send a letter to Premier Christy Clark, Health Minister Lake, and their MLA complaining that the changes to PharmaCare are unfair.

"Every Canadian deserves to have access to world class healthcare and innovative new medicines and vaccines," says the campaign webpage.

"Instead of allowing healthcare providers to make the best decisions for and with their patients, under the Reference Drug Program, they have to follow government directives on which medications are covered for their patients," it says. "This means that your doctor's ability to use clinical judgement in the selection of appropriate treatments can be restricted and may lead to negative health consequences for you."

The membership of Innovative Medicines, formerly known as Rx&D Canada's Research-Based Pharmaceutical Companies, includes more than 50 big drug companies, many of them with headquarters in the United States and Europe.

Victoria health policy researcher Alan Cassels joked that the industry should have called their campaign "Putting Patents First."

Statins are among the top three prescribed types of drug in the province, and if the B.C. government had extended reference pricing to them 12 years ago, when more of them remained under drug company patents, it would have saved $50 million a year, he said.

"Because the market is so big, you just have to tweak it in small ways [to save a lot of money]," he said.

The provincial government has been inconsistent in its commitment to save money from PharmaCare, Cassels added.

For example, Education for Quality Improvement in Patient Care, a research project formerly funded by the B.C. government, was doing related work encouraging doctors to prescribe the most cost-effective choice before trying other options, and it saved hundreds of thousands of dollars with each of its mail-outs, he said.

The government cancelled the program in 2012 in the wake of the botched health ministry firings and has not reinstated it, he said.

PharmaCare could also save a lot more money, perhaps $300 million a year, by adopting a policy of only paying for drugs when there's evidence that they work, Cassels said.

Expansion overdue, says NDP

The BC Liberals attacked the NDP government in the 1990s when it started reference pricing, and while in opposition they promised to get rid of the program, said Adrian Dix, the MLA for Vancouver-Kingsway and a former NDP health critic.

But after taking power in 2001, the new government commissioned a study from former auditor general George Morfitt that found reference pricing worked and was excellent public policy, Dix said. The government backtracked on the promise to end the program but chose not to expand it either, he said.

Dix said it is "interesting" that the government is expanding the program now.

"For several years we have advocated for the expansion of reference-based pricing, starting with statins, and absolutely believe that it's part of the prudent philosophy of paying for what works," NDP health critic Judy Darcy said during debate of the ministry's budget on May 4.

Noting that the cabinet order was made last December and the change wouldn't be in place until June, Darcy asked if lobbying from the drug industry had delayed the program.

"Anyone who knows me knows that I am not a victim of lobbying by pharmaceutical companies," Lake replied. "You can probably get that from the pharmaceutical companies themselves. We pride ourselves on making evidence-based decisions."

Lake said the government has been cautious implementing the change since it will impact both prescribers and patients. "We want to ensure that we do our work so that we can minimize any fear, any confusion that might be created by any change in the reference drug-pricing program."

He noted that after the change is in place, patients would still be able to get the higher-priced drugs if their doctor believes they will benefit.

Lake told The Tyee that expanding the program has generated what appears to be well-orchestrated opposition, particularly from patient groups.

"It's an area where you always expect to get pushback," he said. "Some of these patient groups have obviously been funded by pharmaceutical companies, so it's not a surprise that we see the kind of pushback that we're getting."  [Tyee]

Read more: Health, BC Politics

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