Abstract
Prescription and over-the-counter medications are an important and widely used part of healthcare in Canada. Such drugs represent an increasing proportion of total healthcare expenditures. The objectives of the paper are to examine pharmaceutical expenditures and utilisation in Canada, review the major cost control strategies for pharmaceuticals, and discuss the future issues and challenges for pharmaceutical policy in Canada. Compared with other Organisation for Economic Cooperation and Development (OECD) countries, Canada (until recently) has not been successful in controlling the rate of increase of healthcare expenditures and, more specifically, pharmaceutical costs. The key variables associated with high rates of increase in drug costs relate to increased per capita use of drugs, use of more expensive drugs, and rising prices of existing drugs. If policies are going to address the fundamental societal issues behind both the price and utilisation elements of pharmaceuticals, policy makers and third-party payers in Canada will probably have to focus, primarily, on manufacturers and major healthcare providers and, secondarily, on consumers. They will need to develop an internally valid package of consistent policies.
Similar content being viewed by others
References
Holbrook AM, McLeod SM, Fisher P, et al. Developing a Canadian Prescribing practices network. Can Med Assoc J 1996; 154(9): 1325–31
Health Canada. National health expenditures in Canada 1975- 1993. Ottawa: Supply and Services Canada, 1994
Kennedy W. Managing pharmaceutical expenditures: how Canada compares. Canada Health Action: building on the legacy. Vol 4. Striking a balance; health care systems in Canada and elsewhere. Ottawa: Health Canada, 1998
Auer L, Angus DE, Cloutier JE, et al. Cost-effectiveness of Canadian health care. Ottawa: Queens University of Ottawa Economic Projects, 1995
Morgan SG. Issues for Canadian Pharmaceutical Policy. Canada Health Action: building on the legacy. Vol 4. Striking a balance; health care systems in Canada and elsewhere. Ottawa: Health Canada, 1998
Gorecki P. Controlling drug expenditures in Canada: the Ontario experience. Ottawa: Economic Council of Canada, 1992
Lexchin J. Prescribing and drug costs in the province of Ontario. Int J Health Serv 1992; 22(3): 471–87
British Columbia Ministry of Health. Pharmacare initiatives saving money, improving services [press release]. Vancouver: Ramsay, 1995
Anderson GM, Lavis JN. Prescription drug use in the elderly: expenditures and patterns of use under Ontario and British Columbia provincial drug benefit programs. Ottawa: Queens University of Ottawa Economic Projects, 1994
Castonguay C, Borgeat L, Champigny-Robillard L, et al. Drug insurance: possible approaches. Report of the Committee of Experts on Drug Insurance (Bibliothèque nationale du Québec); 1996
Chiles V. Drug claims costs: a Green Shield Study. Can Pharm J 1995 Nov; 128(9): 39–43
Crop Conseil. Drug Benefit Programs in Canada. 1995
Patented Medicine Prices Review Board. Eighth Annual Report: for the year ended December 31, 1995. Ottawa:TSupply and Services Canada, 1996
Patented Medicine Prices Review Board 1996. The top 200 selling patented drug products in Canada. Ottawa: Supply and Services Canada, 1994
Lexchin J. Canadian marketing codes: how well are they controlling pharmaceutical promotion? Int J Health Serv 1994; 24(1): 91–104
Drake D, Uhlman M. Making medicine, making money. Kansas Universal Press Syndicate, 1993
Eastman HC. Report of the commission of inquiry on the pharmaceutical industry. Ottawa: Supply and Services Canada, 1985
Rachlis M, Kushner C, editors. Unhealthy alliance: medicine and the drug industry. In: Strong medicine: how to save Canada’s health care system. Toronto: Harper Collins Publishers Ltd, 1994: 124–51
Lexchin J. Enforcement of codes governing pharmaceutical promotion: what happens when companies breach advertising guidelines? Can Med Assoc J 1997; 156(3): 351–6
Tamblyn RM, McLeod PJ, Abrahamowicz M, et al. Questionable prescribing for elderly patients in Quebec. Can Med Assoc J 1994; 150: 1801–9
Manning PR, Lee PV, Clintworth WA, et al. Changing prescribing practices through individual continuing education. JAMA 1986; 256: 230–2
Pineault R. The effect of prepaid group practice on physicians utilisation behaviour. Med Care 1986; 14: 121
Tamblyn R, Perreault R. Methods to encourage the sensible use of prescription medication in the elderly. Position paper for The National Health Forum. Ottawa: Health Canada, 1995
Decter MB. Healing medicare: managing health care system change the Canadian way. Toronto: McGilligan Books, 1994
Hurley J, Johnson N. The effects of co-payments within drug reimbursement programs. Canadian Public Policy 1991; 17(4): 473–89
Reeder CE, Lingle EW, Schulz RM, et al. Economic impact of cost-containment strategies in third party programmes in the US. Pharmacoeconomics 1993; 4(2): 92–103
Evans RG, Williamson MF. Extending Canadian Health Insurance: options for Pharmacare and Denticare. Ontario Economic Council. Toronto: University of Toronto Press, 1978
Bacovsky RA. Drug submission, review, and approval processes for provincial and territorial government sponsored prescription drug plans in Canada. Report to the Joint Liaison Committee between the pharmaceutical industry and the Ontario government (mimeo). Toronto, 1997
Green Shield Canada. A report on drug costs. North York: Green Shield Canada, 1994
Reeder CE, Nelson Jr AA. The differential impact of copayment on drug use in a Medicaid population. Inquiry. 1985; 22: 396–403
Soumerai SB, Avorn J, Ross-Degnan D, et al. Payment restrictions for prescription drugs under Medicaid. N Engl J Med 1987; 317: 550–6
Soumerai SB, Ross-Degnan D, Fortess EE, et al. A critical analysis of studies of state drug reimbursement policies: research in need of discipline. Millbank Q 1993; 71(2): 217–52
Levy RA. Prescription cost sharing: economic and health impacts and implications for health policy. Pharmacoeconomics 1992; 2: 219–37
National Forum on Health (NFOH). Canada Health Action: building on the legacy. Ottawa: Health Canada, 1997
Woodhouse KW. The clinical perspective. Cardiology 1994; 85 Suppl. 1: 36–40
Guidelines for the economic evaluation of pharmaceuticals. Ottawa: Canadian Coordinating Office for Health Technology Assessment, 1997
Godwin M, Chapman J, Mowat D, et al. Delisting of drugs in Ontario. Can Fam Physician 1996; 42: 1309–16
Smith DM, McKercher PL. The elemination of selected drug products from the Michigan Medicaid Formulary: a case study. Hosp Formul 1984; 14: 366–72
Zurwitz JH, McLaughlin TJ, Fish LS. The effect of an Rx-to- OTC switch on medication prescribing patterns and utilisation of physician services: the case of vaginal antifungal products. Health Serv Res 1995; 30(5): 672–83
Anderson MC, Bolton C, Gordon J, et al. Competition and the pharmaceutical value chain: competitive issues in the overthe- counter and generic drug segments of the Canadian pharmaceutical industry. Queens Health Policy. Kingston: Queens University, 1995
Harrison P. Rx to OTC: how will the switches impact on pharmacies? Pharm Pract 1994; 10(4): 45–9
Canadian Pharmaceutical Association (CPhA). Provincial Drug Benefit Programs. 16th ed. Ottawa, 1996
Jang R. Medicaid formularies: a critical review of the literature. J Pharm Market Manage 1988; 2(3): 39–61
Angus DE, Auer L, Cloutier JE, et al. Sustainable health care for Canada. Ottawa: Queens University of Ottawa Economic Projects, 1995
Angus DE. Review of significant health care commissions and task forces since 1983-84. Ottawa: Canadian Hospital Association, 1991
Canadian College of Health Service Executive. tExternal Environmental Analysis and Health Reform Update. Special Report: Ottawa, 1994
Strand LM Cipolle RJ, Morley PC. Pharmaceutical care: an introduction. The Upjohn Company of Canada. Don Mills, circa 1991
Lipton HH, Bero LA, Bird JA, et al. The impact of clinical pharmacists consultations on physicians geriatric drug prescribing. Med Care 1992; 30: 646–55
Anderson GM, Lexchin J. Strategies for improving prescribing practice. Can Med Assoc J 1996; 154(7): 1013–7
Redwood H. New drugs in the world market: incentives and impediments to innovation. Am Enterprise 1993; 4(4): 72–80
Coambs RB, Jensen P, Her MH, et al. Review of the literature on the prevalence, consequences and health costs of non-compliance and inappropriate use of prescription medication in Canada. Prepared for Pharmaceutical Manufacturers Association of Canada. Toronto: University of Toronto Press, 1
Hovancsak CF, Yates WN, Schafermeyer KW. A study of the effectiveness of the Kansas drug utilisation review program. Kansas Drug Utilisation Rev Newsl 1984; 6(11): 1–4
Groves R. Therapeutic drug-use review for the Florida Medicaid program. Am J Hosp Pharm 1985; 42: 316–9
Pursel MB. Evaluation of the DUR program for the Iowa medical assistance program. Iowa Pharmacist. Des Moines, Iowa: Iowa Pharmacists Association, 1990
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Angus, D.E., Karpetz, H.M. Pharmaceutical Policies in Canada. Pharmacoeconomics 14 (Suppl 1), 81–96 (1998). https://doi.org/10.2165/00019053-199814001-00011
Published:
Issue Date:
DOI: https://doi.org/10.2165/00019053-199814001-00011