Malcolm Maclure, Robert S. Nakagawa, and Bruce C. Carleton
EXECUTIVE SUMMARY
Since 1995, the province of British Columbia (BC) in Canada has had a Reference Drug Program (RDP) and several related policies that have attracted both praise and criticism as a strategy for cost containment (Woollard 1996; McLaughlin 1997; Brunt, Chappell, Maclure, et al. 1998; Bourgault, Elstein, Le Lorier, et al. 1999; Narine, Senathirajah, and Smith 1999). The policies were introduced by Pharmacare, the publicly funded drug insurance program operated by the provincial Ministry of Health, which covers all its citizens to varying degrees depending on their age, health, and economic status. Pharmacare had been struggling for years with double-digit growth in annual drug costs. The aim of RDP was to provide similar insurance coverage for similar drugs without increasing other health service costs or incurring adverse health events. RDP was challenged by the pharmaceutical industry as being hazardous to patients but was defended by the Ministry of Health as being evidence based. The degree to which RDP achieved its goals is being evaluated by independent researchers at Harvard (Schneeweiss, Sourmerai, Glynn, et al. 2000), McMaster University (Grootendorst, Dolovich, Holbrook, et al. 1999), the University of Washington (Hazlet and Blough 2000), and by one of us (B.C.C.) at the University of British Columbia (Carleton, Maclure, Dormuth, et al. 1999).
This paper summarizes the social and political context of RDP, its rationale and implementation, and lessons we learned about how researchers and decision makers can collaborate during drug policy design, implementation, and evaluation. Collaboration was marked by researchers participating in policy implementation committees and subsequently initiating policy evaluations. Policymakers responded by encouraging evaluations and monitoring their progress. As a result, policy was more firmly grounded in scientific evidence.
Researchers needed to adapt to the policymakers' context, which includes competing definitions of medical necessity and a policy cycle that accelerates and decelerates like a roller coaster. The type of evidence and manner of its input into policy decisions varied from slow, thorough analyses of drug cost growth and alternative policy interventions, to short briefings on policy choices and timely sound bites on urgent details of implementation. External funding of researchers and ongoing forums for expert participation in assembling the evidence base were key to bridging the gap between the different cultures of researchers and policymakers. Sustained involvement of researchers in an advisory committee on policy implementation built mutual respect and understanding between researchers and decision makers, leading to the smooth implementation of a randomized controlled policy trial. However, the personal collaborative relationships established between the policymakers and researchers were not easily transferable to new staff who did not share the history.
INTRODUCTION
The Health Care System
British Columbia is the third-largest province (population: 4,023,100) (BC Stats 2000) among ten provinces and three territories in Canada (population: 30,491,300) (Statistics Canada 2000). The federal government built the foundation of the Canadian health care system by providing indirect funding via a large transfer of moneys to provincial governments for health insurance, on the condition that the provincial insurance plans comply with the Medical Care Act of 1966 and its successor, the Canada Health Act. The Act requires
The federal government retains the ability to withhold some or all of the transferred amount if the provinces do not comply with the Act. However, the federal government's influence declined in the mid-1990s when, coping with the large national debt, it began drastically reducing its transfer payments to the provinces.
Variation among Provincial Drug Plans
As the Canada Health Act does not encompass drug therapy outside hospitals, each province has developed its own plan for prescription drug insurance. The result is wide variation in the administrative structures, parameters of coverage, and drug formularies of the provincial plans. Some provinces have established their own legislation that guarantees them the lowest drug prices offered anywhere in Canada.
The BC Ministry of Health provides its citizens with seven drug plans available through Pharmacare. These plans provide coverage to specific groups of individuals based on demographics, location, or financial means. Within each of the plans there are varying co-payments and deductibles. For those who do not qualify for one of the six specialized plans, there is a universal plan. The plans are
Insurance coverage for prescription drugs is also provided by private sources. Approximately 55 percent of prescription drugs in Canada are funded by private insurers, compared with 45 percent funded by provincial and federal governments (Lewis, Blundell, Cashin, et al. 1997). Private insurers often emulate the provincial drug plans' formularies and drug programs for their beneficiaries. Private insurance coverage for pharmaceuticals in BC may include those individuals who have not yet reached their deductibles in the universal plan. Most of these plans are employer sponsored.
During the 1990s, all drug programs in Canada were struggling in different ways with major cost escalation. Economists at the University of British Columbia (UBC) (Morgan 2001) have recently confirmed what has been long suspected: the largest cause of cost growth has been increased prices of new drugs that replace older, less costly drugs. The common belief that rising drug prices are not the major cost drivers is based on an unrealistic interpretation of the standard method of calculating inflation: the change in price of goods and services that were available last year. By considering a new drug as a totally new product unavailable last year, such a calculation can be performed so that it always omits expensive new drugs. The UBC economists performed the calculation with a more realistic assumption; for example, a new drug for hypertension is a form of blood pressure treatment, and blood pressure treatment was available last year. Given that price growth is the major cost driver, reference pricing—similar insurance coverage for similar treatments—is a logical policy to consider.
National Drug Licensing and Price Control
The authority to sell a drug in Canada is regulated by the federal government. The Therapeutic Products Programme of Health Canada reviews the manufacturer's submissions to determine whether a drug is safe and effective for use in Canada. The information reviewed is provided by the manufacturer, who also identifies the desired indication for the drug. The review gives no consideration to the price of the drug, or to its relative place among existing drug therapies.
Until 1987, drug prices in Canada were determined entirely by the drug manufacturers. The Patent Medicines Prices Review Board (PMPRB) was established in 1987 under the Patent Act to protect consumer interests while increasing the years of patent protection for pharmaceuticals (Patent Act 1987). The PMPRB is an independent, quasi-judicial body created to monitor both introductory drug prices and any price increases during the period of patent protection. Its mandate is threefold:
Although the PMPRB is funded by the federal government, it is an independent organization reporting directly to Parliament. In performing its function, the PMPRB establishes maximal, nonexcessive prices for all new chemical entities. The PMPRB has a limited jurisdiction and does not have the mandate to control or influence drug prices for any unpatented drugs. Although there may be some relationship between price and the cost of research, development, and production of drugs, the primary determinant of price in Canada is still what the international market will bear (Angell 2000).
Policy Overview
BC Pharmacare introduced a Reference Drug Program (RDP) in October 1995. RDP established a means of drug insurance coverage based on the principle that society should pay for an evidence-based standard of drug therapy. If there is no evidence that a higher price buys better effectiveness or fewer toxicities, then the extra cost should not be covered in a publicly funded insurance program.
RDP was modeled on the reference pricing systems implemented in New Zealand and in Germany and other European countries in the 1980s and early 1990s (Lopez-Casasnovas and Puig-Junoy 2000; PHARMAC 1999; Selke 1994; Schneeweiss, Schoffski, and Selke 1998). Under RDP, one or more drugs of proven clinical effectiveness with better prices than their competitors in the same class are identified as the "reference drug(s)," and their price is fully covered.
A key feature of RDP in British Columbia is its flexibility to allow full funding of non-reference drugs if a physician reports that the patient has a specific clinical need or if the central computer of the provincial pharmacy prescription network (PharmaNet) has flagged the patient as an exception by virtue of his or her use of certain other drugs. If a physician reports by fax or telephone that a patient is unable to tolerate the reference drug or does not show a therapeutic benefit, then Pharmacare grants a "Special Authority," usually within 48 hours, for another drug in the class to be fully funded. When a physician prescribes a non-reference drug without a Special Authority, the PharmaNet computer alerts the dispensing pharmacist, who informs the patient and/or physician of the policy and suggests the following options: (1) if there is a patient-specific reason for the use of a non-reference drug, the physician requests and is granted a Special Authority by Pharmacare; (2) if there is no patient-specific reason for the use of a non-reference drug, the physician changes the prescription to a reference drug; or (3) the patient pays the difference in price between the prescribed drug and the reference drug.
Thus, RDP can be viewed as a funding mechanism that incorporates varying levels of evidence from clinical advisers, researchers, physicians, and pharmacists in determining which medicines it is medically necessary to cover.
Medical Necessity
The term "medical necessity" is frequently used to justify health care funding. Much of the debate about drug policy can be traced to disagreements about the interpretation of this term. A Canadian study (Charles, Lomas, and Giacomini 1997) of the meanings of medical necessity identified four definitions, described below, that have been applied at different times in order to achieve different policy objectives.
1. What Physicians and Hospitals Do
This first definition prevailed in the 1960s and 1970s, when public funding of health insurance was expanding. In the area of drug therapy, there were few prescription drugs available, in comparison with the large therapeutic armamentarium of today. In addition, there was little therapeutic duplication of drugs available. For these reasons, virtually all prescription drugs were paid for under the Pharmacare program. Pharmacare had no formal review process for drugs, unlike hospitals, which had established Pharmacy and Therapeutics committees that developed and administered their formularies on behalf of medical staff. The idea behind this first definition is favored by proponents of unrestricted formularies. It is the belief that an individual physician's clinical experience and judgment cannot be improved upon by an expert committee because a patient's individual circumstances are crucial to the selection of an appropriate drug. This view assumes that physicians prescribe drugs appropriately in most instances, an assumption that conflicts with numerous studies (Lexchin 1998; Straand and Rokstad 1999; Anderson, Beers, and Kerluke 1997; Buetow, Sibbald, Cantrill, et al. 1996; Chin, Wang, Jin et al. 1999). This view is also naive with respect to the realities of modern medical practice, in which physicians preferentially cite commercial rather than scientific sources of drug information when making prescribing decisions (Avorn 1982; Lexchin 1993). It also ignores the ongoing use of hospital formulary committees in the institutional setting.
2. The Maximum We Can Afford
The second definition became popular in the mid-1980s as conservative fiscal policies took hold. By 1977 Pharmacare had expanded coverage to include the entire population of 2.6 million British Columbians (BC Stats, 2000); when a family's annual prescription drug costs exceeded Can$100, Pharmacare covered 80 percent of drug costs over that amount. But it was financially imprudent to extend coverage to all prescription drugs for all people. In other words, most prescriptions to the majority of the population—the relatively young and healthy—were not considered by the government to be medically necessary for Pharmacare to cover (definition 2) because these patients already paid for the drugs. If Pharmacare were to have covered those drugs, drug use would change little and no improvement of health was expected. This is a financial definition, and would likely be favored by ministries of finance.
3. What Is Publicly Funded across All Provinces
The third definition emerged as inequalities of coverage among provinces became apparent. Definition 3 is circular as a result of the 1984 Canada Health Act (see under "The Health Care System," above). The Act states that "the health care insurance plan of a province must insure all insured health services . . ." (Canada Health Act 1984), which it defines as services that are medically necessary, without defining what medically necessary means. The drug industry and patient advocacy groups use definition 3 when they tell BC Pharmacare, "You should cover drug X because another provincial drug plan covers it." Sometimes they imply that the other provincial program found the drug scientifically justifiable (definition 4, below). Often, however, they argue that, although there is not yet direct evidence of the superiority of drug X, its mechanism means it is theoretically likely to be demonstrated as superior in trials that are underway, and other provinces (definition 3) have decided that patients should be given that hope. Since the Canada Health Act does not apply to drugs prescribed outside hospitals, there is no parity among provincial drug plans. Furthermore, each province has its own independent review and approval process for insurance coverage of new drugs.
4. What Is Scientifically Justified
The fourth definition was embraced by policymakers in the 1990s as the concept of evidence-based medicine spread. It is attractive to drug benefits programs worldwide because growing numbers of expensive new drugs have no demonstrated superiority over existing drugs. By the same token, medications with the most evidence of effectiveness and safety are often the least expensive because their patent protection ceased many years ago. For example, evidence shows that high blood pressure is usually treated best with either a low-dose thiazide diuretic or a beta blocker, at minimal cost (National Institutes of Health et al. 1997). Although this was well established in 1995, about 20 percent of seniors initiated on a blood pressure-lowering drug in British Columbia were prescribed, contrary to guidelines, calcium channel blockers costing more than Can$1.00 per day (Maclure, Dormuth, Naumann, et al. 1998). From 1994, Pharmacare gradually began to apply this definition to requests for new drugs to be added to the formulary. The result was RDP and several related policies.
The Policy Cycle
To understand how research evidence and definition 4 influenced the making of Pharmacare policy, we first present a brief synopsis of the "policy cycle" (Spasoff 1999, p. 16) and the political context in British Columbia. Spasoff used the concept of a policy cycle to explain how different types of research evidence are needed at different points in the policymaking process (Figure 1). We find the model fits with our experience of the planning, implementation, and evaluation of RDP, and use it as our outline for the remainder of this paper.
a. insured health services and reasonable access to insured health services;
b. reasonable compensation to physicians and dentists for all insured health
services rendered;
c. payments to hospitals with respect to the cost of insured health services.
Plan A: for seniors age 65 or greater
Plan B: for residents of long-term care facilities
Plan C: for Social Services clients
Plan D: for cystic fibrosis patients
Plan E: universal coverage
Plan F: children-at-home program
Plan G: for mental health center clients
An important fact that Spasoff does not emphasize is the dynamics of the cycle. In our experience, a major influence on how researchers collaborated with policymakers was the stop-and-go motion of the process. RDP required approval at various levels of government as well as support from the communications branch of the Ministry of Health. This often entailed delaying the next stage of RDP in a queue of other policy priorities. Once the drug class for the next stage was chosen and the implementation approved, the pace of activity was frenetic for Pharmacare's small staff. A recovery period followed, during which less hurried evaluation and assessment of other interventions took place.
The stop-and-go motion was also influenced by political opposition and election timing. The brand-name Pharmaceutical Manufacturers Association of Canada (PMAC) advertised against RDP before the details of the policy were announced, and later challenged Pharmacare in the courts for allegedly overstepping its authority. The suit was rejected by the Supreme Court of British Columbia. PMAC appealed to the Supreme Court of Canada, which refused to hear it.
RDP was introduced by a social democratic party, the New Democratic Party, within one year before an election. The minister of health described RDP as "praised across the country and internationally. The only adverse impact is on the profit margins of the brand-name drug industry" (Government of British Columbia News Release 1998). The introduction of RDP in British Columbia was politically possible because pharmaceutical manufacturing is located primarily in the two largest provinces, Ontario and Quebec. The lack of significant drug manufacturing in British Columbia gives Pharmacare greater autonomy to introduce evidence-based policy. Still, threats from the drug industry concerning research funds spent in the province occasionally succeeded in slowing RDP implementation.
Complicating the politics of RDP is the perception by many individual physicians that RDP challenges their prescribing autonomy. Focus groups with physicians showed that many of them viewed RDP as further proof that the ministry was concerned more about costs than quality of care.
THE RATIONALE FOR RDP
Assessment of Drug Utilization and Costs
The number of new drugs introduced each year to diagnose, treat, and prevent disease and discomfort has been steadily growing, and their introductory prices have risen dramatically. In 1986–1987, the Pharmacare budget was only Can$165 million. By 1995–1996, it was Can$406.6 million, amounting to 6 percent of the Can$6.6 billion budget for the Ministry of Health (Figure 2). Thus, in the space of nine years there was an increase of almost 250 percent. This does not include the expense of hospital drugs or those paid for directly by consumers.
In the period 1990–1994, immediately prior to the establishment of RDP, Pharmacare's drug costs were growing at an unsustainable rate of about 15 percent per year. This growth rate was significantly greater than other indicators (Figure 3). In addition, there was a looming threat of reduced transfer payments from the federal government. Innovative approaches were needed to balance the budget.
Pharmacare aimed to prioritize its expenditures so as to continue providing comprehensive drug coverage. Until 1994, Pharmacare's drug benefit list included most drugs licensed for sale in Canada. A more rigorous process of drug review was initiated in that year. The goal of this review process was to determine whether a drug should be included for coverage by the Pharmacare program for eligible beneficiaries.
During this period an independent research paper on the determinants of growth in the Pharmacare budget (Anderson, Kerluke, Pulcins, et al. 1993) was very influential because it addressed Pharmacare's main problem rigorously and favored Pharmacare's perspective. It concluded that 34 percent of the cost increase was due to new drugs or increased prices of old drugs, and that population aging had almost nothing to do with increased drug use. This pointed to a general strategy of avoiding the extra prices of new formulations and drugs that were therapeutic duplicates of existing drugs, which was contrary to the interests of the pharmaceutical manufacturers.
The main lesson of this assessment is that studies of the causes of drug cost increases that go beyond descriptive statistics on drug utilization and cost trends and that allow for informed predictions are valuable for policy strategy.
Assessment of Potential Interventions
A review of the Pharmacare benefit program was conducted in 1993, involving provincewide public consultations by an independent panel. The panel concluded that patients with the financial means should contribute to their drug costs, regardless of their age. It recommended replacing the separate plans for seniors, long-term care patients, people receiving social assistance, and families with excessive drug costs with a single universal drug benefit plan, based on ability to pay. Political hesitation to implement this was later reinforced when a visiting scholar, Stephen Soumerai, was invited in 1994 to present to Pharmacare his research on impacts of drug cost control programs (Soumerai, Ross-Degnan, Fortress, et al. 1993). He emphasized that very small co-payments can cause some patients to stop taking essential medications (Soumerai, McLauglin, Ross-Degnan, et al. 1994).
Rather than across-the-board co-payments, Pharmacare took the approach that it would fully cover at least one drug in each class of essential drugs, but the nonessential component of drug costs—the extra cost of higher priced drugs in a class of therapeutically equivalent drugs—would require co-payments. The first initiative in this direction was called the Low Cost Alternative Program (LCA), analogous to "generic substitution" (known in Germany as Stage I of Reference Pricing; see Selke 1994). Under LCA, when chemically identical drugs are supplied by different companies, Pharmacare pays only the price of the least expensive alternative. Prior to the implementation of this payment policy, community pharmacists routinely dispensed generic drugs to those patients who paid their drug expenses directly. Provincial legislation permits generic substitution of chemically identical drug products. The LCA program extended this practice to those patients whose drug costs were paid for by Pharmacare. Patients have the option of paying the extra price for other alternatives. LCA saved about Can$20 million during the first year, an annual rate of saving that has probably continued or grown as additional drugs reached the end of patent protection. No review of literature was required to support LCA because it was standard practice in both community and hospital pharmacies. Likewise, no health outcome evaluations of the policy were deemed necessary.
The second initiative was to create the Therapeutics Initiative (TI) to review published evidence of comparative clinical effectiveness of new drugs (Therapeutics Initiative 2000). The TI provides its evaluation of the therapeutic effectiveness of new agents to Pharmacare's Drug Benefit Committee for consideration in making recommendations for drug listings. The TI was also funded by Pharmacare to educate physicians in more evidence-based prescribing, although an evaluation showed that its impact was insufficient to be a major cost-saving strategy (Maclure et al. 1998). The TI disseminated to all BC physicians reviews of the comparative effectiveness of existing drugs.
In 1995 Pharmacare began applying the logic of LCA to chemically distinct entities within single drug classes (e.g., histamine-2 receptor antagonists) that, according to published evidence, are therapeutically equivalent (known in Germany as Stage II of Reference Pricing; see Selke 1994). By 1995 this type of reference pricing had been used in the Netherlands, Denmark, and New Zealand, and Italy had announced plans to adopt it. Each country used a different approach, but reportedly succeeded in producing price reductions (PHARMAC 1999; Selke 1994; Jacobzone 2000). The pharmaceutical industry countered that the policy had not worked in Europe, because overall drug costs continued to grow. However, there was not enough published evidence to support industry's claim. Personal connections provided access to supportive unpublished evidence. The deputy minister of health in New Zealand in the mid-1990s had been a senior official in the BC Ministry of Health earlier in the decade, and made occasional return visits to British Columbia. Thus, Pharmacare learned how New Zealand had saved Can$30 million in its first year of reference pricing (PHARMAC 1995).
Although the direct evidence supporting RDP was largely unpublished, there was abundant, evidence by analogy with formulary management as practiced in hospitals for decades. A hospital formulary is a list of drugs deemed by the hospital's medical staff, through its Pharmacy and Therapeutics Committee, to be sufficient to provide a contemporary standard of drug therapy for inpatients. Often, drugs commonly used in the community are not included in a hospital's formulary. When an individual patient cannot tolerate any of the formulary drugs, or does not obtain the desired therapeutic effect, a non-formulary agent may be prescribed. This is exactly analogous to RDP in British Columbia, with its Special Authority. Formularies are considered to be a standard of practice in hospitals to ensure rational, cost-effective drug therapy. Likewise, RDP has the potential to be a standard of practice for drug plans.
The lessons learned from this assessment of potential interventions is that although studies of drug efficacy and effectiveness are voluminous, studies of the impacts of drug policies are few. More are needed if policymaking is to become more evidence-based.
Policy Choices
Having decided on RDP as a strategy, major tactical decisions had to be made. Which classes of drugs should be tackled first? And what was the likely choice of reference drug within each class?
The criteria for the selection of RDP therapeutic areas were that they must
- Have a positive or neutral therapeutic effect on patient care
- Be easy for the Pharmacare staff to make operational efficiently
- Have a well-defined and feasible Special Authority process
- Have the potiential to significantly reduce drug expenses for the province
- Be based on sound scientific evidence
In addition to meeting the criteria, the first three drug classes under consideration were seen as relatively straightforward and easy to implement: gastric acid suppression drugs (H2RAs), nitrates for heart pain, and the nonsteroidal anti-inflammatory drugs (NSAIDs) used mainly for arthritis. There was much published evidence comparing the clinical effectiveness of H2RAs and NSAIDs. Although there were no published comparative trials of different forms of nitrates, it was presumed that this was because clinicians and pharmaceutical companies believed there was little or no difference among them in efficacy. Estimates of potential savings of Can$30 million in the first year also influenced these choices.
Another tactical decision, based on clinical experience of hospital formularies, was to permit rapid individual exemptions (via Special Authority) based on a patient's nonresponse or adverse reactions. This would make RDP more flexible than reference pricing in other countries. Long before RDP was contemplated, Pharmacare had sponsored the building of PharmaNet, a computer system linking all pharmacies in British Columbia to a central computer with an online record of each patient's prescription drugs. By law, all prescriptions filled by community pharmacies in the province must be entered into PharmaNet. The first wave of RDP took effect on October 1, 1995, two weeks after PharmaNet was fully functional in all pharmacies. The PharmaNet system helped RDP implementation by enabling instantaneous adjudication of patients' benefit status and calculation of their co-payment and current deductible accumulation. It permitted use of a variety of exemptions and more complicated rules that would have been too confusing for clinicians or patients to remember. For example, PharmaNet was used to generate automatic exemptions for patients already taking medications that had known interactions with reference drugs, or were markers of illnesses that qualified the patients for exemptions.
The lessons learned from these decisions were that although published research helped policymakers choose which drug classes to start with, research was not relevant to many questions about tactics and timing of policy choices and how PharmaNet could be used in policy implementation. To some extent, this lack of relevance inhibited collaboration with researchers, who felt that their expertise was not needed for such administrative decisions.
IMPLEMENTATION
After the broad policy choices had been approved by the minister of health and the cabinet, the rush to implement the details began. An expert committee was brought together to advise the executive director of Pharmacare on implementation. The RDP Expert Advisory Committee (RDPEAC) consisted of physicians, pharmacists, economists, and pharmacologists and was chaired by one of us (R.S.N.), a hospital pharmacist with expertise in the implementation of therapeutic cost-containment programs in the institutional setting. The RDPEAC was asked to provide expert advice on how best to implement RDP for the identified classes of drugs. The committee's first recommendation was that RDP be implemented in stages. Thus, RDP was applied to the first three categories of drugs over a period of months rather than simultaneously. The latter approach would have been too difficult for the committee and for Pharmacare because many smaller policy choices remained in each drug category: Which should be the final choice of reference drug? Should any drugs be excluded from partial payment because of toxicity or ineffectiveness? What criteria should be stated for individual patient exemptions? Which medical specialties, if any, would be exempt? What ancillary policies would be needed to ensure RDP's success?
As each new drug class was identified and researched, the RDPEAC assembled the evidence base for inclusion in RDP. Each subsequent implementation phase built on the previous one, such that barriers encountered or successful strategies were incorporated.
The First Plunge
The RDPEAC joined the policy cycle at its fastest stage. Figure 4 illustrates the roller-coaster dynamics of the policy cycle—slow in steps 1 and 2, accelerating in step 3, hurried in step 4, decelerating in step 5. This dynamic was acutely evident every time a new class of drugs was considered for inclusion in RDP.
Evidence
RDP began with the histamine-2 receptor antagonists (H2RA). These drugs are used in the management of a variety of gastrointestinal conditions, including peptic ulcer disease and gastroesophageal reflux. In British Columbia at the time, there were four H2RAs available, with markedly different prices: cimetidine (Can$4.20 for a monthly maintenance dose), ranitidine (Can$13.20/month), famotidine (Can$22.50/month), and nizatidine (Can$28.20/month) (Therapeutics Initiative 1995). The RDPEAC judged all four to be equivalent in effectiveness and safety, based on critical reviews of the current medical and pharmacological literature (Feldman and Burton 1990; Cantu and Korek 1994; Rodriguez and Jick 1994; Carmichael and Zell 1987). This evidence was cited in Pharmacare's letter to clinicians announcing the policy. Cimetidine, having the lowest price, became the reference drug. Omeprazole (Can$69/month) is in a different class—proton-pump inhibitors—which are known to be more effective suppressors of gastric acid but, at the time, were thought to have unproven long-term safety. Omeprazole was therefore not subject to referencing with the H2RAs, but became part of the policy package.
What Was the Policy?
The policy specified that "all new and repeat prescriptions for an H2RA were to be funded at the level of cimetidine." An additional clause to the policy was introduced after concern arose that the restriction of H2RAs might cause some physicians to use omeprazole instead. All new prescriptions for omeprazole would require either a prescription from a gastroenterologist or evidence of therapy failure after a six- to eight-week trial on an H2RA. Specifically, prescriptions written by gastroenterologists were fully reimbursed for omeprazole, but were not exempt from the H2RA restrictions, as relatively few clinical circumstances could justify the use of one H2RA over another. There was no exemption for those patients already taking omeprazole or H2RAs, but they were given an eight-week grace period to continue unrestricted use of these medications before the policy took effect.
This delay for current users was a direct result of researchers' being involved in the advisory committee. One of us (M.M.) ascertained that there were about 10,000 current users of omeprazole and about 10,000 new users per year. This suggested that a sudden surge of up to 50 or 100 Special Authority requests per day might occur, which Pharmacare was not yet prepared to handle. The Special Authority process allowed general practitioners to request that a non-reference drug for a patient be fully covered by Pharmacare due to special circumstances. Patients were granted an exemption if they were receiving drugs known to interact to a clinically significant degree with cimetidine: warfarin, phenytoin, theophylline, and cyclosporine. Patients were also given the choice of paying the difference between the alternative drug and the cost of cimetidine. The Special Authority process opened an opportunity for a researcher to collaborate with policymakers to analyze the initial patterns of requests.
Barriers
The policy triggered a wave of negative advertising from the pharmaceutical industry (Brunt et al. 1998). Pharmacists objected to the added burden of explaining RDP to both patients and physicians, while simultaneously dealing with the initial frustrations of using the PharmaNet system. Physicians felt that their prescribing autonomy was being threatened (Mullett and Coughlan 1998). Initially, many clinicians believed that the "cheapest agent," cimetidine, caused more adverse effects than the other non-reference drugs, despite evidence to the contrary. Critics claimed that the policy would negatively affect patients' health and cause cost shifting. No evidence to support these claims was provided, but the critics believed the burden of proof belonged to the policymakers to demonstrate that the policy would have no unintended effects. This was an unreasonable assertion, given that many medical, surgical, and drug therapy decisions in practice have not been proven to have no unintended consequences.
Lessons Learned
It was immediately clear that a key to success in the face of major criticism would be the staged implementation of RDP, drug class by drug class. This would allow time for separate consultations with different groups of specialists, adequate preparation of evidence-based communications and responses to critics, and better procedural troubleshooting by Pharmacare staff. It would also allow accumulation of experience and evaluations of immediate impacts that could be applied to future phases of RDP.
The second lesson was that the policy shifted 174,000 prescriptions to cimetidine from ranitidine, other H2RAs, and omeprazole, with no reports of adverse effects. The savings were projected to be about Can$12 million annually, from Pharmacare's annual budget of Can$400 million in 1996–1997.
A third lesson was that the evidence base for the policy would be used not just before the policy launch but also long after in responding to criticism from pharmaceutical manufacturers, physicians, and the public. In response to concerns that the policy was being developed without evidence of its impact on patients, an evaluation subcommittee, which one of us (B.C.C.) chaired, was formed, comprising outside researchers and a leading physician critic of the policy. The committee's purpose was to oversee evaluations of RDP impacts and provide assurance that the quality and effectiveness of the RDP policy were being monitored.
Fourth, researchers (Chappell, Maclure, Brunt, et al. 1997) studying the policymaking process were surprised by the many minor problems that could not have been anticipated in implementing RDP for H2RAs until the final weeks before the launch. These procedural obstacles crowded the agenda, allowing little time for reflection on evidence, other than what committee members could recall. Various decisions about implementation had to be based on quick consultations with experts.
It also became evident that responding to criticism from the public, physicians, and pharmaceutical manufacturers would be time consuming. This was a "learn as we go" approach whereby a lack of evidence for pragmatic issues did not prevent the policy from developing. Our decision, then, was to implement policy, assess its impact in order to better develop subsequent phases, and establish policy evaluation criteria such that formal evaluation could be done.
Questions That Remained
This initial phase of RDP implementation left Pharmacare confronting the most significant obstacle at that time: how could we more effectively communicate the evidence base of our policy to the stakeholder groups to ensure more efficient implementation? Surely, if the reasons were made clear, it would lessen resistance and increase support and development of the strategy. Getting BC physicians to absorb evidence-based messages was a difficult problem, however, as our research would soon confirm (Maclure et al. 1998).
The Pace Quickens on the Straightaway
The next two implementation phases of RDP occurred within the same month, affecting nitrates used for heart disease and the NSAIDs used mainly for arthritis. Nitrates were available in three different delivery forms: oral, topical paste, and transdermal systems. Isosorbide dinitrate (ISDN), administed orally, was the least expensive method of delivery (Can$4.62/month). Nitroglycerin paste, although perceived as inconvenient compared to nitroglycerin transdermal patches, was less expensive (Can$19.04/month for the paste compared to Can$60.04/month for the transdermal patch).
Evidence
At the time, there were no randomized controlled trials directly comparing the efficacy of alternative forms of nitrates. Placebo-controlled trials had been reviewed by local experts (North Shore Community Drug Utilization Program 1994; BCOHTA 1994). Based on these reviews the RDPEAC concluded that there was insufficient evidence that any one nitrate had a therapeutic advantage over another. Given the substantial financial benefit to a manufacturer to demonstrate therapeutic advantage, it was reasonable to consider all forms of nitrates to be equivalent in therapeutic effectiveness until proven otherwise. The committee recommended that patients receiving oral nitrates be switched to ISDN, and patients receiving transdermal nitroglycerin be switched to nitroglycerin paste.
More than 20 NSAIDs were available in Canada at the time of this policy implementation phase. Based on current medical and pharmaceutical literature (Rochon 1994; Bradley 1991; March 1994; Fries 1993; Langman 1994), all NSAIDs were judged equivalent in therapeutic effect, differing mainly in their adverse effect profiles. The difference in monthly therapy costs for these drugs ranged from Can$2.10 for low-dose aspirin to more than Can$80 for the newer NSAIDs. As was the case with the nitrates, few clinical trials were published comparing the effectiveness of the different NSAIDs. Among those trials, none demonstrated any consistent superiority of one NSAID over another. This evidence concerning nitrates and NSAIDs had been reviewed and disseminated to all actively prescribing physicians by the Therapeutics Initiative during the preceding 12 months.
What Were These Two Policies?
The nitrates policy was introduced on November 1, 1995. It stated that all new and repeat prescriptions for oral nitrates were to be funded up to the level of generic ISDN (Can$4.62/month), and for topical nitrates, up to the level of nitroglycerin paste (Can$19.04/month). Special Authority was granted to poorly controlled patients, those who showed intolerance to the reference drugs, and those with cognitive difficulties or manual dexterity problems. Cardiologists were not granted exemptions.
The policy regarding NSAIDs, effective November 27, 1995, stated that all new and repeat prescriptions for NSAIDs would be funded to the level of generic naproxen (Can$13.45/month). A physician's opinion that a patient needed a more expensive NSAID was not sufficient for issuing Special Authority. The policy stipulated that Special Authority would be issued only after the patient had tried a referenced NSAID (or acetaminophen) and found it ineffective. However, patients with rheumatoid arthritis, ankylosing spondylitis, collagen vascular disease, and gout were automatically given Special Authority on request by their physicians. Rheumatologists and dentists were also exempt.
Barriers
Less than a month after the two November policies were instated, the resistance began to pack a larger "punch." On December 18, 1995, the Pharmaceutical Manufacturers Association of Canada (PMAC) and seven of its member companies filed suit in the Supreme Court of British Columbia against the attorney general to stop the minister of health and Pharmacare from implementing all reference drug policies. (After ruling in the government's favor at the provincial supreme court and court of appeals, the case was finally refused hearing by the Supreme Court of Canada in February 1998.)
Accompanying this challenge was the continuing sharp criticism from various stakeholders. Some health professionals charged that the policy harmed the quality of patient care, led to increased illness, and resulted in an increase in the overall cost of patient care. Drug manufacturers felt the policy discriminated against those companies that invested in research and development, and continued to allege that proposed savings were not feasible, as there would be an increase in the use of medical services and a greater number of hospitalizations. Others felt that the policy was leading Canada into a two-tier system of health care.
However, there was support for the policy from the senior citizens in the province, who perceived the government as controlling costs responsibly without compromising the quality of care. These data were gathered by telephone interviews and focus groups conducted by the Seniors Drug Focus Project (see under "Evaluation," below). Preliminary impact assessments by ministry analysts at this time also showed no increase in the use of other health services as a result of RDP policy.
Lessons Learned
The savings Pharmacare experienced as a result of applying RDP to the first three of its drug categories (H2RAs, nitrates, and NSAIDs) were estimated at Can$25 million annually (Office of the Auditor General of British Columbia 1999). Another significant outcome was the countermove made by one pharmaceutical company that launched its transdermal nitroglycerin product at a cost of 32 percent of competitors' products, matching the reference drug price exactly. While it was claimed that this price was determined independently of the RDP program, the timing and exact matching of the price made this seem unlikely. Consultation with cardiologists and general practitioners in the development of the nitrate policy was deemed unnecessary because there was no clinical basis by which a specialist or general practitioner would be able to identify a patient requiring one nitrate over another. The lack of sufficient advance notice (17 days) given to physicians and pharmacists before the NSAIDs policy was implemented upset some people. This resulted in pharmacies having excessive stock levels of the non-reference drugs, and physicians, pharmacists, and patients having to deal suddenly with a significant change in policy. Following this, we ensured a more substantial advance notice for all subsequent policies.
It also became evident that some physician groups would need less restrictive access to NSAIDs, particularly physiatrists and rehabilitation specialists, since many of their patients had already failed trials on the reference products in this category of RDP policy. These specialists were permitted to apply for professional exemptions from the policy.
Questions That Remained
Two significant issues remained to be solved. The first was how to streamline RDP implementation such that notification to stakeholders occurred in sufficient time. This would be aimed at allowing efficient conversion of patients to reference drugs and avoiding the potential of stockpiling of non-reference drugs. Second, and equally important, was how to encourage physicians to try patients on RDP medications before requesting Special Authority.
Anticipating the Bumps
The announcement of the upcoming implementation of RDP for antihypertensives was made on October 15, 1996. To encourage the use of proven, effective antihypertensive therapies, the RDPEAC decided not to include beta blockers and diuretics under RDP, despite major price differences within those categories.
Evidence
The RDPEAC decided that the policy would affect only second-line drugs, specifically the angiotensin-converting enzyme inhibitors (ACEIs) and the dihydropyridine calcium channel blockers (CCBs). It is widely recognized that there are no clinically significant differences within each of these classes in therapeutic or adverse effects when used for uncomplicated hypertension. A meta-analysis of the Collaborative Group of ACE Inhibitor Trials showed some heterogeneity among ACEIs but not enough to conclude that a single substance exerts any effect other than the class effect (Garg and Yusuf 1995).
What Was the Policy?
The RDP policy for antihypertensives became effective on January 1, 1997, and stated:
- Captopril, ramipril, and quinapril were the reference drugs in the ACE inhibitor class; they would be fully covered in all dosage forms up to Can$27.00/month.
- Felodipine was the reference drug among the CCBs with full coverage of all dosage forms up to Can$31.00/month.
Cardiologists, nephrologists, and internists were exempt from the policy, as were patients with asthma and diabetes. Sustained-release generic versions of verapamil and diltiazem, which were available at the time, were covered under the government's generic substitution policy that was already in place.
Barriers
The announcement of the upcoming antihypertensive RDP policy caused a surge of opposition. It was spearheaded by the release of a position paper written by the Canadian Cardiovascular Society (CCS 1997). Among many allegations, the paper implied that RDP compromised patient care, endangered the health of British Columbians, and totally ignored individualization of therapy. However, as emphasized in a letter to the editor from three prominent health care and epidemiological researchers, "the paper contains a number of inaccuracies, produces a limited literature review and nowhere names the participants. . . . Furthermore, the background paper published adjacent to the position paper is produced by two employees of the pharmaceutical industry, who have a commercial conflict of interest as evaluators of the RDP policy" (Holbrook, O'Brien, and Grootendorst 1997). An author of the paper subsequently chaired public forums (sponsored by a pharmaceutical manufacturer affected by the antihypertensive RDP policy) further damning the policy as harmful to patients.
A lobby group with connections to the pharmaceutical industry was also formed, calling itself the British Columbia Better Pharmacare Coalition. Its sole objective was to oppose RDP. This organization supported the idea that RDP sacrifices quality care in the name of short-term budget cutting and called for a moratorium on RDP until it was evaluated. This view was solicited through letters to newspapers, radio commentary, and meetings set up between government officials and member organizations such as the Internal Medicine Specialists of Nanaimo BC, the First Association of Nephrologists of British Columbia, and the British Columbia Pharmacy Association.
Lessons Learned
It was during this phase that we learned the most about how evaluation could defuse criticism. The RDP Evaluation Committee established a peer review process for RDP evaluation proposals submitted by researchers outside the Ministry of Health. We did a great deal of relationship building with researchers and decision makers at this time in order to clearly describe the impact that research would have on the policymaking process and vice versa.
The estimated savings from both classes of drugs was Can$14 million annually (Can$9 million for the CCBs and Can$5 million for the ACE inhibitors). It became evident that as RDP expanded, more pressure was applied by its opponents. The message persisted that the policy was harmful and would not meet its savings estimates. This pressure resulted in more time spent responding to criticism and less time spent improving and developing policy and implementation strategies. Special Authority requests were still coming in at a steady rate of 300–400 per day. One of the main criticisms from physicians was the additional burden of filling out and faxing SA forms, a task for which they were not paid.
Despite the negativity, the policy seemed to gradually gain acceptance by the public and professionals. The BC Pharmacy Association dropped out of the BC Better Pharmacare Coalition and stated publicly that the evaluation procedures employed would answer its questions about the policy's viability. The BC Arthritis Society notified the government that it was not a member of the BC Better Pharmacare Coalition. Media coverage became more supportive of the policy despite the relentless efforts of the pharmaceutical industry and diehard opponents.
Questions That Remained
It is not known whether the RDP policy has had or will have a preventive effect on drug price increases in Canada. Since British Columbia is the only province with an identified reference drug program, the impact on national pricing levels may be minimal. However, there has been an increasing trend for drugs within a therapeutic class to be priced at the same level (e.g., angiotensin antagonists for high blood pressure, and triptans for migraines).
A persisting question that remained after this and previous phases of RDP implementation was how to reassure physicians that the policy was evidence based and would be properly evaluated for patient impact.
A Twist in the Track
The next phase affected drugs used in the treatment of reversible airway diseases like asthma. This began as an RDP policy, was changed to a drug "delisting" policy, and finally ended as a medication conversion policy called the Nebulizer to Inhaler Conversion Program. This evolution occurred in response to the pharmaceutical industry's continued pressure against RDP, which favored the Nebulizer to Inhaler Conversion Program over extending RDP to cover all respiratory drugs.
Evidence
The creation of this policy also reflected our review of evidence that metered-dose inhalers were the drug-delivery devices of choice: "The use of home wet nebulizers in the delivery of asthma medication is rarely, if ever, indicated in the management of asthma in adults and older children. Informed use of metered-dose inhalers (MDIs) with or without a spacer device is less expensive and at least as effective as that with nebulizers in the treatment of mild to moderate asthma" (Ernst, Fitzgerald, and Spier 1996). Numerous randomized controlled trials supported this position (Chou, Cunningham, and Crain 1995; Colacone, Afilalo, Wolkove, et al. 1993; Idris, McDermottt, Raucci, et al. 1993; Levitt, Gambrioli, and Fink 1995). In addition, many local hospitals had implemented nebulizer to MDI conversion programs to facilitate better therapy as well as save money.
What Was the Policy?
The policy, effective March 1, 1999, restricted coverage of nebules and solutions for nebulization. Patients 18 years of age and under were automatically exempt. Pharmacare coverage would be provided under Special Authority only if patients:
- had a cognitive impairment and an unsuccessful trial in the use of an MDI and a spacer;
- were living independently and either suffered from severe upper-extremity disability or lacked fine-motor coordination that precluded effective inhaler techniques;
- were residents of long-term care facilities and regularly required the administration of three or more inhaled medications at least three times a day;
- had difficulty in generating adequate inspiratory effort such that they were unable to achieve therapeutic benefit from an inhaler.
Due to the acuity of most of the nebulizer users, there were fears that one failed conversion could result in negative publicity. It was suggested that providing patients with a spacer device and paying pharmacists to instruct patients on device technique would aid in a smoother conversion. Pharmacies were paid double the customary professional fee for each patient they assisted with the conversion. Free spacer devices were provided to patients through community pharmacies.
Barriers
A change of senior Ministry of Health staff and communications personnel meant that significant momentum was lost in the implementation. We were reminded of the urgency in making the evidence clear to the stakeholders again, as many health care professionals and patients believed that nebulized treatment for asthma was the hallmark, despite evidence to the contrary. Lack of direct communication between the Policy Advisory Committee and the director of Pharmacare occurred as a result of the acceleration of the "roller coaster effect" of the policy cycle during implementation. Unclear communication within the advisory committee led to the unclear wording of one key exemption: "patients who have such difficulty in generating adequate inspiratory effort that they are unable to achieve therapeutic benefit from an inhaler are exempted." This statement should have read, "patients who have difficulty in generating adequate inspiratory effort from dry powdered inhalers such that they are unable to achieve therapeutic benefit and have had an unsuccessful trial in the use of an MDI should try use of a spacer and MDI together prior to exemption." This lack of detail resulted in the unnecessary exemption of a large group of patients.
These communication difficulties and resultant policy problems are magnified by the policy cycle's roller coaster effect. Pharmacare is, by design, concerned with more than just the implementation of a single policy. Multiple drug benefit programs were being conducted at the time, and many employees had responsibilities for more than one program.
As with the initial implementation of all previous RDP policies, frustrated and angry physicians, pharmacists, and patients contacted Pharmacare by letter, fax, and telephone demanding changes. Additional complaints of increased workload due to the policy came from some staff at long-term care facilities where the administration of respiratory medications via nebulizer is considered to save time when more than one medication can be administered simultaneously. The policy allowed for the continued use of nebulizers if three or more medications were to be administered together, a practice nursing home staff believes decreases workload.
Consideration was given to an age of exemption lower than 18. The pediatric population accounts for the highest group of nebulizer users in British Columbia, and MDIs are now preferred over nebulizers for routine care of school-age children. Had the policy included school-age children, Pharmacare's savings would have been greater. However, one barrier was Pharmacare's concern that parents would have difficulty converting children to inhalers successfully. Also, children were exempt from earlier phases of RDP because what little financial benefit might have come from including them was offset by the potential risk of a story in the news media of a child coincidentally suffering an adverse event shortly after switching medications because of the policy.
The resistance of and pressure by the pharmaceutical industry experienced previously was noticeably absent during the implementation of this policy. This was likely due to the industry's awareness of the scientific literature clearly stating that respiratory medications delivered via metered-dose inhalers were at least as effective as medications delivered via a nebulizer. Another possibility is that the industry may have profited as much or more from metered-dose inhalers as from nebulizer medications.
Lessons Learned
The Nebulizer to Inhaler Conversion Program saved Pharmacare more than Can$1 million over one year. Researchers' collaboration increased because the policy was initiated with an evaluation component in the form of a randomized controlled trial. About 20 percent of physicians and their patients were randomized to be affected immediately by the policy ("treatment group") or offered a six-month exemption ("control group"). The unit of randomization was physician's office address so group practices would not be split. Physicians at control addresses were told in a letter from the principal investigator (B.C.C.), confirmed by an enclosed letter from Pharmacare, that their six-month exemption was already programmed into the PharmaNet computer.
Preliminary results have shown that the policy did not affect patients' quality of life or health status, in contrast to what opponents had predicted. The study also showed that significant stockpiling occurred before the policy took effect, which was a predictable response to the six-week advance notice to pharmacists and physicians. Pharmacies rarely billed for the fee available to them for the extra counseling required to switch patients from nebulizers to MDIs.
Questions That Remained
Although we have hypotheses, we do not yet know how to use the results of our policy trial to best advantage in building support for future evidence-based changes in drug coverage. This is because the collaboration between researchers and policymakers waned as a result of major turnover in Pharmacare's management and a hiatus in policy development.
EVALUATION
RDP was introduced in a climate of growing interest in outcomes evaluation but declining operational resources within the Ministry of Health. Pharmacare's priority was to develop complex cost-containment policies with limited staff. Few of its human resources could be devoted to evaluation. In this section, we will review the forces that enabled Pharmacare to forge ongoing links with researchers engaged in evaluating its policy impacts.
Initial Surveys of RDP Impact and Research Uptake
The Seniors Drug Focus Project (SDFP) was the original seed for what became a multifaceted research program. Its two aims were to study the impact of drug-substitution policy on seniors, and seniors' (and SDFP's) impact on policy. Initially, SDFP was hampered in pursuing its first aim because permission to contact patients directly affected by the policy was denied because of privacy concerns, until a solution was found in 1997 (Maclure 1997). From May 1995 to July 1996, SDFP conducted focus groups and telephoned 1,699 randomly selected seniors. SDFP found that seniors were more cost-conscious than physicians and generally supported RDP (Brunt et al. 1998; Mullet and Coughlan 1998).
As for its second aim, SDFP found evidence from seniors had little impact on Pharmacare policymakers unless SDFP conducted rapid research. Decision makers were more receptive to studies using focus groups, small telephone surveys, and studies of databases completed in two to eight weeks. As participant-observers in the rushed policy-implementation process, we discovered that the RDP Expert Advisory Committee had time for little more than a decision-oriented summary that encapsulated a study's main finding and was communicated in a sound bite at the time and place a decision was being made. To gain the attention of policymakers, researchers discovered they needed to offer their help with policy implementation: consulting with specialists, testing brochures in patient focus groups, or assembling the evidence base for the policy.
The lesson learned from this project is that there are logistical impediments to bridging research and policymaking, but they can be overcome if the researcher is creative about methods and timing and obtains the trust of the policymakers. Researchers need to take the first steps.
External Funding
Credit for the evaluation of RDP must be given first to agencies that fund health services research initiated by independent investigators. In 1994 the Seniors Independence Research Programme in Ottawa sent a representative across Canada requesting proposals. One of us (M.M.), then manager of Statistical Analysis and Surveys in the Research and Evaluation Branch of the Ministry of Health, heard her presentation and submitted a Can$526,000 proposal that became the SDFP. SDFP began as an initiative outside Pharmacare and ended within Pharmacare, because midway through the study the ministry disbanded the Research and Evaluation Branch and moved Maclure to Pharmacare in 1997.
The hope of funding from external agencies was also an incentive for researchers at Harvard, McMaster University, the University of Washington and the University of British Columbia to propose evaluations in 1996-1997. Based on reviews of their proposals by the RDP Evaluation Subcommittee, Pharmacare provided seed money to help researchers at Harvard, McMaster, and the University of Washington who were interested in conducting retrospective reviews of RDP policies to develop competitive grant proposals for submission to national agencies. Subsequently, approximately Can$1.5 million of external grant support from seven different agencies has been obtained, including the U.S. Agency for Health Care Research and Quality, the Canadian Health Services Research Foundation (CHSRF), the Canadian Health Transition Fund (HTF), and the Drug Information Association. The scientific aspects of the policy trial were funded by grants from CHSRF and HTF. As of early 2001, the evaluations were nearing publication.
The lessons learned about evaluation funding are that research grant agencies should continue or increase their support for policy evaluations, and that agencies like Pharmacare can encourage such support by providing seed money to investigators.
Impact Assessment
What sort of evaluation would have been done in the absence of external funds? It is hard to be certain, because Pharmacare had the assurance that high-quality evaluations were being done externally. However, we do know what evaluation Pharmacare was able to do in the interim. Four months after joining Pharmacare, one of us (M.M.), as manager of Statistical Analysis and Evaluation, was asked to conduct an evaluation of RDP with three data analysts working in other parts of the ministry; this was to be completed in two weeks, just before the presentation of the provincial government's annual budget. The monthly numbers of medical services and hospitalizations for sentinel diagnoses among people who switched drugs after the policy was put into place were plotted for time periods before and after the policy's implementation. These numbers showed fairly constant rates, with seemingly random fluctuations from month to month and no sudden changes after instatement of the policy. That evaluation served its immediate purpose and the information was used by the director of Pharmacare at many public meetings for two years. However, ultimately it was recognized as scientifically flawed, because the cohort of people who switched was defined in the middle of the process rather than at the start of follow-up. This can allow for sequence bias in before-and-after comparisons whereby the outcome of interest—the dependent variable (e.g., hospitalization)—can precede and therefore cause the independent variable (e.g., switching medications).
The lesson here is that there is a large cultural gap between what an administrative organization does for evaluation and what health service researchers do. These functions are complementary, not conflicting. Insiders and outsiders should continue doing what each does well, but should collaborate on each other's components.
Results of Impact Evaluations of RDP
Evaluations by University of Washington and McMaster University researchers were initiated in 1996 and 1997. In 1997 Pharmacare contacted Stephen Soumerai, a recognized expert in health policy evaluation at Harvard, and invited him to participate in the evaluation of RDP. The evaluations were still in progress as of early 2001 because the data sets are massive and the methodology problems proved challenging: two cohorts must be defined in the same way, one in advance of the "before" period, and one before the "after" period. Otherwise, historical controls are not comparable (due to the above-mentioned sequence bias); dozens of patterns of switching between drugs are complicated by many patients who simultaneously take two drugs from the same class; the nonzero before-policy rates of switching, switching back, and stopping drugs must be subtracted from the after-policy rates; the timing of stopping is unknown and must be inferred; and the fact that hospitalizations cause drug switching must be controlled in any analysis of whether switching causes hospitalizations.
Critics Accuse Pharmacare of No Evaluation
After the pharmaceutical industry failed to stop RDP by advertising and court challenges, a small number of RDP critics with industry support created the BC Better Pharmacare Coalition. It advertised that RDP had not been evaluated and should be stopped until evaluation was completed. However, an evaluation subcommittee had already been formed six months after the first phase of RDP had been implemented, and had developed procedures for evaluating RDP impacts on patients and the health system in general. One key document created by this committee was a peer-review process for RDP evaluation proposals. Two key organizations that had signed on to the coalition withdrew when they learned that Pharmacare was assisting the three universities with independent evaluations. At the same time, the industry supported the launch of an evaluation, coordinated at the Fraser Institute (a conservative think tank) by a general practitioner, that had already published articles in BC newspapers strongly criticizing RDP. That evaluation effort was slow to begin, in large part because initially recruited investigators decided not to continue with the project.
Randomized Policy Trial
A third aim of SDFP was to assess feasibility of randomized controls for policy evaluation. We found that physicians considered randomized trials the gold standard for evaluation but considered policy trials infeasible. We also found that seniors were comfortable with the idea of delaying a policy change in a subgroup "as long as it is OK with my doctor." This information helped the RDP Expert Advisory Committee approve a randomized control group, whereas three years earlier a similar committee advising Pharmacare quickly rejected the idea as unworkable and unethical.
The lesson learned from these trials is that if researchers develop a sustained collaborative relationship with policymakers and sensitivity to their concerns, it is feasible to conduct a randomized policy trial with a randomized control group in which the policy is delayed briefly.
PERSONAL REFLECTIONS
Researcher Observations
We discovered major impediments to funding research and evaluation by Pharmacare but substantial interest in evaluation if it were supported by external funds and synchronized with the policy cycle. Researchers inside government can help obtain funds and achieve synchronization, while independent external researchers are needed to persuade reviewers of impartiality. One of the best ways a drug program can foster collaboration is to allow randomized delayed controls, because this demonstrates the policymakers' commitment to rigorous impact evaluation that can inform both the researcher and the funding agency. However, it is difficult for external evaluators to advocate randomized policy trials without appearing self-serving and insensitive to the realities of decision making. This can be avoided by having an internal researcher do much of the bidding and help tailor the proposal to deal with decision makers' concerns.
In our "public-policy laboratory," we learned that the traditional academic process of developing research ideas long in advance of peer review funding and data collection did not work well. It was only by luck that delays in the Nebulizer to Inhaler Conversion Program equaled the delays in peer review of the external grant for the policy trial. We also learned to be amenable to rapid changes and concerned about the impact our research would have on policy staff.
On the other hand, we found that a major opportunity for developing collaboration with policymakers was to offer assistance with the development and implementation of policymakers' ideas. Efforts on behalf of specific policies were rewarded with attempts to understand and accommodate evaluation methods into new policies.
Policymaker Observations
In a review of the Canadian health care system sponsored by the federal government, it was noted that "the probable effect on drug costs of any public (or private) reimbursement policy can be gauged by the tone and vigour of the industry's response" (Lewis et al. 1997). Since the implementation of this policy was opposed extremely vigorously by the pharmaceutical industry, it can be assumed that it had significant impact on the industry's revenue and on the provincial expenses as well. On a more objective basis, the policy was estimated to have saved Can$44 million annually for the drug program.
Despite this opposition, the RDP policy was introduced successfully. In addition to its solid philosophical foundation and basis in evidence, its success was largely due to the commitment from all levels of the provincial government: the cabinet, the minister of health, the deputy minister, the executive director of Pharmacare, the physician director of the ministry's Clinical Support Unit, and Pharmacare's pharmacists.
Collaboration with researchers enhanced the policy cycle but depended on their direct experience of the roller-coaster dynamics of the process and the constantly changing context. In general, there needs to be a mutual recognition between the researcher and the policymaker of each other's expertise and role in the system. The policymaker needs to recognize and value the researcher's expertise and academic strength, while the researcher must acknowledge the expertise and authority of the policymaker. When this is achieved, there are tremendous opportunities to generate new knowledge that will allow the advancement of health and public policy.
GLOSSARY
BC
British Columbia: The third-largest, westernmost province in Canada.
DBC
Drug Benefit Committee: The Pharmacare committee that recommends to the director of Pharmacare what drugs to cover and with what restrictions, based on the reviews of evidence by the Therapeutics Initiative and by the Pharmacoeconomic Initiative.
Drug class
A group of medications with similar chemical structures that exert their intended effects by the same pharmacologic mechanism.
LCA
Low Cost Alternative Program: The term used by BC Pharmacare for its policy of fully covering the lowest cost drug within a class of chemically identical drugs. The LCA is normally a generic drug with the lowest average Pharmacare-claimed price over a period of months. Patients who wish the brand-name drug or a more expensive generic may pay the difference in price.
Pharmacare
The publicly funded drug insurance program with an annual budget of about Can$700 million, administered by the BC Ministry of Health for all British Columbia residents with different deductibles and co-payments for different subgroups of the population.
PharmaNet
The single provincewide secure pharmacy network linking all retail pharmacies in British Columbia to a central computer with an online record of each patient's prescription medications that the patient filled in British Columbia in the past 13 months. The system became established in September 1995 and enables instantaneous adjudication of patients' drug claims under relatively complex drug coverage rules.
PI
Pharmacoeconomic Initiative: An expert committee, chaired by a health economist, that reviews pharmaceutical manufacturers' economic evaluations of new drugs; such evaluations are required by Pharmacare before a new drug will be covered. The PI advises the Drug Benefits Committee of the potential cost-effectiveness of the new drug. The PI is based at the University of British Columbia and is funded by a contract from the Ministry of Health.
PMAC
Pharmaceutical Manufacturers Association of Canada: The trade association of patented medicine manufacturers, renamed Canada's Research-Based Pharmaceutical Companies (CRPAC).
PMPRB
Patented Medicines Prices Review Board: An independent quasi-judicial body created by the federal government in 1987 to monitor drug prices during their periods of patent protection in Canada, and to establish maximal, nonexcessive prices for all new chemical entities that are patented.
Randomized Policy Trial
The term used in British Columbia for a policy implemented for the majority of patients and physicians, but delayed for six months in a randomized control group of 10 percent of physicians and patients.
RDP
Reference Drug Program: The program in British Columbia that applied the principle of Reference Pricing—similar drug insurance coverage for similar drugs—to the coverage of drugs for the elderly, the poor, and patients with special needs.
RDPEAC
RDP Expert Advisory Committee: A committee charged with providing expert advice to the executive director of Pharmacare on the implementation of the Reference Drug Program in British Columbia. It is composed of physicians, pharmacists, epidemiologists, staff resources, and other experts.
RP
Reference Pricing: An insurance policy by which, in a class of similar drugs, one or more less expensive drugs are fully covered as the "reference" drugs. Patients have the option to pay the difference in price for more expensive drugs in that class if they or their doctors do not want to use one of the reference drugs. In British Columbia, this was initially called Reference Based Pricing and later called the Reference Drug Program. Unlike RP in many other countries, the program in British Columbia allowed full coverage of drugs costing more than the reference drug if the patient had specific clinical needs for the alternative.
SA
Special Authority: The term used by BC Pharmacare for prior authorization of an exemption for a patient from one of Pharmacare's policies, such as RDP.
Stage I Reference Pricing
The term used in Germany for Reference Pricing within a group of chemically identical drugs made by more than one manufacturer. The reference price is usually that of a generic drug. Patients have the option of paying the extra cost of a brand-name drug in that class. (See LCA.)
Stage II Reference Pricing
The term used in Germany for Reference Pricing within a group of chemically slightly different but pharmacologically interchangeable drugs, regarded as therapeutically equivalent.
Stage III Reference Pricing
The term used in Germany for policy encouraging therapeutic substitution across different drug classes. This form of reference pricing was not implemented in British Columbia.
TI
Therapeutics Initiative: Established by the Department of Pharmacology and Therapeutics in cooperation with the Department of Family Practice at the University of British Columbia, the TI provides physicians and pharmacists with up-to-date, evidence-based, practical information on rational drug therapy. It includes a multidisciplinary committee of clinicians, researchers, and others who meet monthly to review published evidence of the comparative effectiveness of prescription medications. This committee sends the results of its reviews to the Drug Benefit Committee. Before Pharmacare covers a new drug, it must be assessed by the TI. The TI is funded by the Ministry of Health but functions at arm's length from the government, pharmaceutical industry, and other vested interests.
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Acknowledgment: We wish to thank Laura Esmail for her assistance with this report.