Reference Drug Programs: International comparisons

British Columbia continues to be the only province in Canada that supports a Reference Drug Program. Ontario legislation even goes out of its way to say it does not permit therapeutic substitution. Similarly, Health Canada's Non-Insured Health Benefits program concluded that therapeutic substitution did not save the program money.

Many drug plan managers throughout the developed world do not support therapeutic substitution because they know it can harm patients and does not reduce costs.

Some countries and jurisdictions in North America have implemented reference drug programs similar to British Columbia's, including New Zealand, Australia and the Netherlands. However, many countries have either decided not to expand these programs or have opted not to implement them at all. For example in 1991, Germany introduced a reference-based program similar to BC's; in 1996, this program was discontinued. Norway also decided to discontinue its reference-based pricing program. France considered introducing reference-based pricing, but elected not to.

Evidence consistently shows that therapeutic substitution policies disrupt treatment, destabilize sick patients, and often cause people to stop treatment all together. The U.K. experienced higher rates of deaths and increased hospital readmissions when it tried therapeutic substitution for cardiovascular drugs. A 2005 American Journal of Managed Care study showed that 21 to 48 per cent of U.S. patients who had their cholesterol-lowering drug switched were more likely to discontinue treatment.

Sweden and Denmark have generic substitution policies, but do not use reference-based pricing. Under generic substitution policies, a switch is made fro a brand name drug to a generic drug product that has the same active ingredients and is considered chemically and therapeutically identical in strength, concentration, dosage, form and administration.

A close look at New Zealand's medicine rationing policies reveals a trend towards higher disease burdens and worse health care outcomes compared to other OECD countries where access to innovative medicines is not restricted (e.g. New Zealand has the highest frequency of coronary by-pass surgery compared to France, UK, Italy, Canada and Australia).

Reference Drug Program: Better Pharmacare Coalition message to government and private payers

What support and information do patients and plan members need to ensure understanding of reference-based pricing?

Patients and plan members need to understand reference-based pricing will potentially harm people living with chronic diseases and frustrate the physicians and experts treating them who will feel they are not in control of the care plan best suited for their patients' disease. Patients and plan members need information and evidence that explains reference-based pricing is a short-term solution that simply will push costs to other parts of the health care system and generate negative health outcomes for patients living with chronic conditions. Patients and plan members also need information about reference-based pricing's negative affect on the doctor/patient relationship represents a dangerous threat to quality health care.

Are there patient groups who have direct experience?

Patients and plan members can learn from the frontline solid evidence from the Gastrointestinal Society of the severe, adverse consequences of reference-based pricing expansion and therapeutic substitution. When Pharmacare tried to force patients to take different drugs for gastroesophageal reflux disease, the policy drove up costs by $44 million as a result of increased doctor and hospital visits.

Gail Attara, President & Chief Executive Officer, Gastrointestinal Society, in an October 2014 Witness Statement to the B.C. Select Standing Committee on Finance and Government Services, recommended the finance committee advise PharmaCare against Therapeutic Substitution, an ill-conceived drug reimbursement/ coverage policy that has been proven, using BC's own linked health data to: These results were further validated when research found that genetic variations in our genomes revealed that some individuals metabolize these products rapidly so they lose their effectiveness, whereas these individuals metabolize other products in the class differently. This evidence demonstrates that patients cannot all take the same medication and that reference-based pricing is shortsighted and not patient-centric. This recent scientific finding that there are other variances in our genomes that could affect medications in other disease areas as well.

What information from government or private payers would be helpful?

Helpful information would clearly define what the reference-based pricing is and how the practice of it affects patients and potentially changes the therapy conversation between patients and their physicians. As part of that conversation, patients need to understand that public or private drug plan managers cannot appropriately establish whether two different drugs are therapeutically equivalent, meaning they provide the same therapeutic benefits, as there is no evidence to support these decisions, i.e., there are not head-to-head clinical trials comparing two or more different drugs in the same class within the same population of patients. In fact, these products have demonstrated their uniqueness by successfully acquiring a new brand. If they were the same, they would not be granted a unique brand.

Key elements of patient-pharmacist-prescriber relationships

Governments and private payers must not follow the practice of trying to pick "winners and losers" in determining which drugs in which category should be covered and by how much. Those are choices to be made by doctors and patients.

Patients and plan members are the most important members of their health care team. A patient and plan member's perception of his or her disease and its treatment is critical in the management of the disease. Physicians are best suited to making decisions about their patients' treatment needs, as they fully understand the disease history and the clinical implications of treatment. The nuances of appropriate, personalized care are extremely important.

Reference-based pricing threatens patients and plan members who are being successfully treated on a medication by forcing them to switch medications. Limiting choice to innovative medications flies in the face of patient individuality and personalized medicine.