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Reference-based pricing in British Columbia: implications for cardiologists--an analysis
1Health Economics Department, Hoechst Marion Roussel Canada Research Inc, Laval, Quebec.
Insights
Reference-based pricing (RBP) in British Columbia may increase health care costs by not fully considering therapeutic substitution and patient welfare. Optimal pharmacotherapy requires the right drug, patient, dosage, and timing for cost-effective care.
Area of Science:
- Health Economics
- Pharmaceutical Policy
- Clinical Pharmacy
Background:
- Reference-based pricing (RBP) policy funds drug therapies based on the 'gold standard' cost.
- Pharmacare pays for the lowest cost drug within a cluster, irrespective of indication.
- Pharmaceutical expenditure is a small, interactive part of the global health care budget.
Purpose of the Study:
- Analyze the impact of RBP on health care expenditure and patient care.
- Evaluate the effectiveness of RBP in British Columbia.
- Consider patient welfare and resource allocation in RBP policy.
Main Methods:
- Review of international RBP implementation data.
- Analysis of drug cost-effectiveness and clinical benefits.
- Case study: diltiazem dosage forms for hypertension and angina.
Main Results:
- Price controls and restricted drug access may increase, not decrease, health care costs.
- RBP in British Columbia may not fully address therapeutic substitution's impact on care quality.
- Optimal pharmacotherapy necessitates a strategy for the right therapy, patient, dosage, and timing.
Conclusions:
- RBP policy in British Columbia requires analysis considering patient welfare and resource optimization.
- Cost containment should not overshadow the importance of therapeutic substitution and quality of care.
- Effective pharmacotherapy relies on a holistic approach to drug selection and administration.
Abstract:
Under the reference-based pricing (RBP) policy, British Columbia will fund drug therapies based on the cost of the 'gold standard' therapy that meets the needs of the majority of patients with a specific condition. Hence, Pharmacare will pay for the lowest cost drug within a cluster of related but different drugs, regardless of the indication. When evaluating the impact of drugs on health care expenditure, one must consider that their costs are more than offset by the clinical and economic benefits they provide. Pharmaceutical expenditure accounts for a small proportion of health care expenditure and should be viewed as an essential and interactive component in the global health care budget rather than as an independent constituent. In that respect, insight should be gained from many countries in which RBP has been implemented A wealth of data converge to the same conclusion: price controls and restricted access to drugs do not reduce prescription drug expenditures but actually increase health care costs. Furthermore, cost containment being the main issue behind RBP in British Columbia, the contentious issue of therapeutic substitution has not been taken fully into consideration, nor has its impact on the quality of care of the patient. The case of diltiazem once-a-day versus diltiazem tablets for hypertensive and angina patients illustrates the important considerations that must be taken into account in writing the overall financial equation that drives the implementation of the RBP policy. If pharmacotherapy is to be an appropriate treatment to attain optimal cost effective health care, its benefit can only be optimized with a strategy that entails the right therapy, for the right patient, in the right dosage form and at the right time. Accordingly, RBP in British Columbia should be analyzed in light of patient welfare and appropriate use of collective resources.