Getting rid of the Reference Drug Program would be a costly mistake

New CCPA report says program saves Pharmacare millions and should be retained
March 27, 2002

(Vancouver) The Canadian Centre for Policy Alternatives says a study it released today shows BC's Reference Drug Program has been effective at slowing down the growth of prescription drug expenditures, without harm to patient health. The Centre says the program should not be scrapped, and is worthy of replication in other jurisdictions.

The study, written by Victoria-based drug researcher Alan Cassels, is being released a few days before the BC government's Reference Drug Program Consultation Panel is to present its final report (due March 31). The government's Panel was tasked with "finding a cost-effective alternative to BC's Reference Drug Program" (RDP). The CCPA, however, is urging the Panel to defend the RDP.

The report, entitled Paying for What Works, calls the RDP a model for rational policy making. "The logic behind RDP is simple," says Cassels. "Under RDP, if there is no evidence that a newer, more expensive drug is therapeutically superior to a cheaper, equally effective treatment, then it just makes sense that the taxpayer should pay for the less expensive drug first."

"Governments around the world are struggling to control escalating pharmaceutical costs," says Cassels, "and many are looking to emulate BC's success with reference pricing. It makes no sense to scrap a system that works, notwithstanding the vigorous opposition to the program from the brand-name pharmaceutical companies."

Thus far, RDP covers five categories of drugs, and is estimated to save BC's Pharmacare program $44 million a year, reports Cassels. "BC's RDP has now been extensively and rigorously studied. And contrary to the claims of some, these evaluations make clear that the RDP has not led to adverse health outcomes such as increased hospitalizations, death or increased costs to other parts of the heath system. Given the financial pressures the health care system is facing, the province should, in consultation with physicians, pharmacists and consumers, examine whether RDP can be expanded to new categories of drugs."