Using pharmacoeconomic analysis to make drug insurance coverage decisions

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Health Technology Assessment

Background:

• British Columbia established a cost-effectiveness-based drug reimbursement scheme.
• The Pharmacoeconomic Initiative (PI) evaluates drug manufacturer submissions for Pharmacare coverage.
• Drug coverage in British Columbia is universal, with provisions for the financially indigent and copayments for others.

Purpose of the Study:

• To assess the implementation and outcomes of a cost-effectiveness-based drug reimbursement eligibility and coverage scheme in British Columbia.
• To evaluate the concordance between the Pharmacoeconomic Initiative's recommendations and Pharmacare decisions.
• To examine industry compliance with pharmacoeconomic evaluation guidelines.

Main Methods:

• The Pharmacoeconomic Initiative (PI) critically evaluated pharmacoeconomic studies submitted by drug manufacturers.
• Recommendations were based on majority decisions from a multidisciplinary expert committee.
• Data from January 1996 to December 1996 on 21 submissions were analyzed, including types of economic evaluations and guideline compliance.

Main Results:

• The PI made recommendations on 21 submissions, with 18 accepted by Pharmacare, yielding a 95% concordance rate (kappa = 0.89).
• Only 5 of 21 submissions (24%) complied with established guidelines (CCOHTA or Ontario Ministry of Health).
• Most studies lacked societal perspective, long-term analysis, sensitivity analysis, and used inappropriate comparators.

Conclusions:

• The cost-effectiveness-based drug review process in British Columbia demonstrated high concordance between PI recommendations and Pharmacare decisions.
• The pharmaceutical industry showed slow adaptation to new reporting requirements and guideline compliance.
• There is a need for industry to better understand and integrate cost-effectiveness principles into their submissions for reimbursement eligibility.