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Pharmaceutical firms oppose cheap-drug policy

Companies say patient outcomes, not cost, should determine which drugs are used

Pamela Fayerman
Vancouver Sun

Canada's pharmaceutical companies say provincial governments should not copy a money-saving New Zealand drug insurance program, because it is focused on cost containment and not on best outcomes for patients.

A recommendation to emulate the New Zealand system was made Tuesday in a report by the University of B.C.'s Centre for Health Services and Policy Research.

But Jacques Lefebvre, a spokesman for Canadian pharmaceutical companies, said the drug-making industry disagrees.

"Not only are we opposed to that, but Canadian patients should be as well," Lefebvre said, "because decisions on which medicines to include in the [New Zealand] plan are made on the basis of what's cheapest, not what is most effective for each patient."

Lefebvre is vice-president of Canada's Research Based Pharmaceutical Companies, an umbrella organization representing 55 drug companies, most of them based in Ontario and Quebec.

The UBC study said Canada could save billions of dollars a year on prescription medications by following the New Zealand model, where a national agency has been avoiding cost increases by negotiating drug prices and bulk purchases from manufacturers.

The UBC researchers said double-digit increases in drug spending could be curbed if Canadian governments negotiated discounts for bulk purchases to encourage more price competition in the drug marketing industry,.

It is unclear whether the New Zealand program has had an impact -- negative or positive -- on overall health outcomes for residents of the country. No specific study has been done to compare patient outcomes based on drug-buying policies.

But the Organization for Economic Cooperation and Development (OECD) collects data and uses it for country-to-country comparisons. Its most recent surveys indicate Canadians are healthier on numerous fronts than New Zealanders, but it does not say that those numbers are tied to New Zealand's drug-buying policies.

In 2003, for example, Canadians had longer life expectancy -- 82.4 for females in Canada compared to 81.3 in New Zealand; 74.4 for males in Canada compared with 77 in New Zealand.

Canada had far fewer hospital discharges for cerebrovascular disease: 151 per 100,000, compared to 193 per 100,000 in New Zealand.

Hospital discharges are a measure of how many people are hospitalized.

Canada also had far fewer hospital discharges tied to respiratory disease: 787 per 100,000 population, compared to 1,198 per 100,000 in New Zealand, which is thought to be due largely to lower smoking rates in Canada.

Canada had 173 overall hospital discharges per 100,000 population, compared with 218 for New Zealand.

Lefebvre said the capped budget on pharmaceutical products in New Zealand affects treatment options for patients and shifts costs to other areas of the health system, like hospitals, which may explain why hospital admission and discharge rates are higher there than in Canada.

"I think you can draw these correlations," he said.

While Canada's federal and provincial governments have been mulling over ways to control drug costs for a few years, Lefebvre said any schemes that put a financial squeeze on brand-name companies will affect their ability and "flexibility" to do research and development on breakthrough drugs.

Marnie Mitchell, executive director of the B.C. Pharmacy Association, said the New Zealand approach would potentially restrict treatment choices for patients and their doctors, and that the OECD findings should be considered.

"It would be hard to make conclusions without detailed research, but it suggests that reducing payments and budget allocations in one area may result in higher costs and poorer outcomes in other areas," Mitchell said.

"Cost-cutting in one area may well result in unintended consequences in another area, like hospitalization rates."

 The Vancouver Sun 2007