Abstract

Growth in pharmaceutical expenditures in Canada is approximately double the rate of growth in other healthcare expenditures. Conventional approaches to controlling expenditures are not working. The policy options proposed by Laupacis, Anderson and O'Brien for managing pharmaceutical budgets - better evidence, better dissemination, additional regulation and increased dialogue - are necessary but not sufficient to bring about more cost-effective prescribing. This paper suggests three additional strategies that will complement existing policies: restructuring consumer co-payments such that consumer cost-sharing varies inversely with therapeutic necessity; introducing physician budgets for those pharmaceuticals for which there is reasonable suspicion of overuse; and price-volume contracting with pharmaceutical firms, consistent with evidence from pharmaco-economic evaluation. The first strategy will send better signals to the consumer as to the value of the pharmaceuticals they are consuming. The latter two strategies will provide incentives for physicians to prescribe and industry to market their pharmaceuticals in a fashion more consistent with cost-effective use of these drugs. Better evidence and better dissemination are simply not enough.