Ontario's formulary committee: how recommendations are made

In 1996, the provincial government in Ontario, Canada required pharmaceutical manufacturers seeking to list their products on the provincial formulary to provide a formal economic analysis documenting the products' cost effectiveness. The provincial formulary lists pharmaceutical products for which reimbursement is provided for residents on the Ontario Drug Benefit Program (ODB).

To describe how listing decisions are made, and specifically the role of economic analysis in this process.

A qualitative case study approach was taken. Data were analysed using the pattern-matching technique. Data consisted of meeting transcripts and interviews with committee members, which were coded and weighted for analysis using the pattern-matching technique.

Nine meetings of the Drug Quality and Therapeutics Committee (DQTC), which makes listing recommendations to the ODB, were observed.

Seven individual committee members were interviewed.

Complex economic analyses (i.e. analyses more involved than a simple cost-consequence analysis) played a limited role. The clinical factor dominated the perception of costs. Generic and 'me-too' products with no price premium did not require complex economic analyses. Poor quality analyses were not useful and the DQTC members' lack of in-depth knowledge of health economics influenced the extent to which analyses were discussed. The DQTC did discuss economic issues however, and often performed informal economic analyses to guide decisions.

Complex economic analyses had an impact on provincial drug benefit decisions in a limited number of circumstances, principally for expensive innovative products. However, the committee did use some form of economic analysis to guide decisions in almost all cases, and therefore requesting economic analyses, even simple ones, from manufacturers seeking formulary listing is a useful healthcare policy.