Join ISPOR  | Sign up for mailing List  | Follow Us: LinkedIn Twitter Facebook YouTube

The Official News & Technical Journal Of The International Society For Pharmacoeconomics And Outcomes Research


Adrian Levy PhD, Associate Professor, University of British Columbia, Director, Oxford Outcomes, Vancouver, BC, Canada

Pharmaceutical Outcomes Research and Policy in Canada - Context and Recent Developments

Canadian academic institutions have proven fertile for pharmaceutical outcomes research. Innovative research contributions have been made in the fields of pharmacoeconomics, pharmacoepidemiology, pharmaceutical policy and health-related quality of life. While multifactorial in nature, this focus on high quality outcomes research has arisen in part because of the structure and organization of health care in Canada.

The Canadian health care system is often identified as an example where publicly funded health care coverage is made available to all citizens. While this is largely true for the cost of physician and hospital services, the situation with coverage for medications is more complicated. Delivery of health care falls under provincial jurisdiction while regulatory approval is mandated federally and the setting of prices is, in reality, a shared responsibility. All ten provinces and three territories, as well as several other federally-funded recipient groups in Canada, have drug benefit programs which subsidize the cost of medications for eligible beneficiaries. The amount of these subsidies and definition of eligible beneficiaries varies from province to province.

The Canada Health Act describes agreed upon desired characteristics of the health care system. The Act is federal health insurance legislation which provides universal, publicly financed coverage of most hospital and physician services. This means that when a Canadian seeks medical care, the individual goes to a physician or hospital of his or her choice and presents a health insurance card, which is issued to each eligible resident of the province. The individual does not pay directly for medically necessary services and no dollar limits or deductibles apply. Thus, the Canada Health Act ensures that the provision of health care services do not depend on an individual's ability to pay. However, while legislation creates national standards, the Canadian health care system is actually a complex arrangement of funding mechanisms worked out between the governments at the federal, provincial and territorial levels. It is worthwhile noting that the Canada Health Act focuses on funding mechanisms, and in contrast to the United Kingdom's National Health Service, the health care system in Canada is not centrally organized or coordinated. This mean that, in Canada, hospitals are not-for-profit privately owned institutions, most physicians are private contractors to the public system, and the roles of governments include funding, legislation, regulation and the delivery of a small number of programs. The system is not population- based insofar as hospitals do not have defined catchment areas and family physicians do not have defined patient populations. Thus, Canadians have freedom to choose their own physicians and hospitals.

Prescription drugs are not considered an insurable benefit under the Canada Health Act. The direct costs of paying for medications falls to provincial and territorial drug plans and the payment arrangements differ in each of Canada's jurisdictions. Overall, the medications for approximately one-quarter of the Canadian population are paid for by governments (ranging from 9% in Manitoba to 43% in Quebec). The elderly over 65 years of age and recipients of social assistance have been covered in all provinces since the 1970s. In a majority of provinces, universal coverage only starts for persons who have relatively high drug costs. The actual plans differ substantially between provinces such that, while the net effect is that subsidies are typically bigger for lower income households, out of pocket expenses vary widely. Many employed individuals have the costs of medications subsidized through extended health benefits plans provided by private insurance companies.

The federal government in Canada has two fundamental roles for new medications entering the market. First, new drugs must meet national standards of efficacy and safety set by the ministry called Health Canada (analagous to the process undertaken by the Food and Drug Administration in the United States). Second, the Federal government is charged with regulating the country-wide price manufacturers can charge for newly patented medications through the Patented Medicine Price Review Board.

This division of responsibilities creates tension between the provincial governments which have to pay for medications and the federal government which regulates prices. Transfer payments from the federal government offset a portion of health care costs. Provincial and territorial ministries face perennial shortfalls in health care budgets and constantly seek ways of delivering the same or better health care within budget constraints.

Following a trend established in Australia in the early 1990s, first Ontario and then Canadian provinces inplemented reimbursement review processes for newly marketed pharmaceutical products. As the trend for reimbursement review spread, there was an obvious and rapid multiplication of the efforts. For example, there were ten health ministries, three territories and at least five federal funding programs that each required definitions of eligibility criteria for registrants, levels of pharmaceutical coverage, reimbursement criteria and independently reviewed economic submissions.

In response to variations in coverage of prescription medications and substantial duplication of efforts in reviewing the economic submissions, in 2002 the federal, provincial and territorial health ministers established the Common Drug Review process within the Canadian Agency for Drugs and Technologies in Health. This centralized reimbursement review process now provides recommendations to 18 participating publicy-funded drug plans (the province of Quebec, which inlcudes approximately one quarter of the population of Canada, does not participate). Despite the centralized review process, there continues to exist wide variability in the medications that are included on formularies in different Canadian jurisdictions and the amount that is paid by the public purse.

Perhaps as a result of the circumstances in delivering health care in Canada, university scholars have taken leading roles in the various domains of pharmaceutical outcomes research and health technology assessment.

One reason for Canada's pivotal role in pharmacoepidemiological research is the availability of many population-based sources of data. Canadian administrative health databases are among the most well developed anywhere and provide an excellent resource for pharmacoepidemiologic research. For this reason, Canada has been characterized as an “information-rich” environment. Canadian investigators have taken a leading role in using populationbased administrative databases for pharmacoepidemiologic studies of both the intended and unintended effects of medications. In addition to routine collection of administrative data, supplementary information may be collected through population-based disease and treatment registries. Canadian scholars have written seminal descriptions of various forms of bias and confounding, developed innovative study designs, and made other important methodological and statistical advances, in pharmacoepidemiologic studies.

The early implementation of reimbursement review processes in various jursidictions in Canada has led to continuously improving guidelines on the submission requirements and processes. Also, there has been a large number of published economic appraisals in the Canadian context as the reports submitted to public drug plans go on to appear in the peer-reviewed literature. Many of these studies have been published by investigators outside of academic environments, including the industry and government sectors. These developments have provided incentives for developing robust methods and interpretations of economic evaluations.

Pharmaceutical Policy
The structure of the health care system, with provincial governments responsible for the delivery of health care and public drug plans being the largest payors in the country, has led to the implementation of new policies aimed at making drug coverage more equitable, limiting the reimbursed amounts within specific classes of medication, and increased cost-sharing. These new policies have led to changes in coverage status of different sectors of the population and typically led to decreases in public reimbursement for prescribed medications. Several groups of investigators have focused on the system outcomes such as the changes in prescribing and the estimated reduced expenditures occuring after a new policy is implemented. Much less is known about the effects on patient outcomes of the new policies.

Health-related Quality-of-Life
Canadian scholars have also been at the forefront of designing techniques for measuring and valuing health-related quality of life. Utility elicitiation techniques that are now used ubiquitously, such as the time trade off, were pioneered in Canada. Also developed in Canada, the Health Utilities Index® is a generic, preference-scored, comprehensive system for measuring health status and producing utility scores.

The Common Drug Review was established in March 2002, began reviewing in September 2003, and since then has reviewed over 100 submissions. The process has undergone two reviews and many positive changes have occurred in response. Some of the notable changes have been: 1) to include two members of the public in all deliberations. These persons' opinions are helpful in identifying the non-evidentiary factors that may be considered and included in the process; 2) to enhance transparency through several means including developing non-technical versions of the recommendations; and 3) to establish standardized approaches for reviewing both “first-in-class” medications and those for rare disorders.

Joint Oncology Drug Review (JODR) Implemented in March 2007, the inter-provincial Joint Oncology Drug Review Process was established to create a more consistent review process of ambulatory-based oncology medications across the country. This process is now distinct from Common Drug Review.

Progressive Licensing In response to the advances in pharmaceutical sciences, drug development, and changes in public expectations, many countries are changing the processes around regulatory approval for medications. The Government of Canada is keeping pace through a new program called the Progressive Licensing project. Under this system, the current point-in-time licensing system will evolve in a cyclical progressive licensing model. The daunting task of jointly evaluating benefits and risks of medications in an environment in which different and often conflicting objectives must be balanced will require substantial input and compromise from all interested parties.

There is a growing need worldwide for high quality drug outcomes research and discourse on pharmaceutical policy. Canadian academics, policy- and decision-makers and industry employees have assumed leadership roles to fill that need. ISPOR is responding in kind by providing a forum for broad communications between different sectors and its members continue to generate leading outcomes research. The 13th annual ISPOR meeting in Toronto, with its record-breaking attendance, entertaining and informative oral and poster presentations around the meeting theme “Vive la Différence - Enhancing/Expanding Outcomes Research One Country at a Time”, attests to the fact that both outcomes research on medications and ISPOR are thriving in Canada.


  Issues Index | 2008 Issues Index  

Contact ISPOR @  |  View Legal Disclaimer
©2016 International Society for Pharmacoeconomics and Outcomes Research. All rights reserved under International and Pan-American Copyright Conventions. 
Website design by Eagle Systems USA, Inc.