DRUG COSTS CALLED 'UNSUSTAINABLE'

Governments Must Take Expense As Well As Effectiveness Into Account,
Minister Warns

QUEBEC -- To deal with soaring drug costs, governments should look at
approving drugs based on their cost efficiency, not just their medical
effectiveness, federal Health Minister Allan Rock says.

"We need to take a good, hard look at the cost effectiveness of drugs we
are approving," he said yesterday in a speech to the Canadian Medical
Association.

"In many cases, drugs are approved without consideration of the additional
costs they impose on the health-care system. It seems to me we need to
consider, when we approve drugs, safety and efficacy, but at some point we
also need an assessment of cost effectiveness in a systemic way."

Mr. Rock said he will formally make the proposal at a meeting of health
ministers in September.

The minister said the idea is a response to repeated complaints that Ottawa
approves drugs based on purely technical grounds. The provinces say they
face immediate pressure to add new drugs to their formularies -- lists of
drugs that are covered by health-insurance plans -- driving up costs sharply.

"They tell me sometimes the new drug is only marginally more effective in
the outcome but is vastly more expensive in cost."

As a result of this and other factors, drug costs are rising to
"unsustainable" levels, he told delegates to the CMA annual general council
meeting in Quebec City.

Spending on prescription drugs has soared almost fivefold in Canada over
the past 15 years, according to the Canadian Institute for Health
Information. Canadians now spend more on prescription drugs, $12.4-billion,
than the cost of doctors' services, $11.7-billion annually.

CMA president Peter Barrett reacted cautiously to the idea of an expanded
drug-review process.

"You have to be careful to look beyond the cost of the drug, and look at
the benefits to society," Dr. Barrett said, adding that while it is true
new drugs can cost significantly more, they can result in major savings to
the health system by, for example, making hospital stays unnecessary. He
conceded that many new drugs provide only marginal benefits, but worried
that limiting access would discourage innovation.

Mr. Rock said a new drug-approval process would not deny drugs to patients
in need. Rather, it would ensure that all appropriate drugs are available
in a cost-effective manner.

He said many models would be considered, but he is most familiar with the
process in Australia. There, a committee of patients, clinicians, health
economists and ethicists reviews all new drugs to determine whether they
should be placed on a formulary. Mr. Rock said this would be preferable to
the current Canadian system, where governments "grapple with these issues
on a province-by-province basis, sometimes in a way that is not
co-ordinated at all."

In a question period after his speech to the CMA, Mr. Rock found himself
under repeated attack for the government's approval of medical marijuana.
Physicians complained that the drug's benefits were unproved and that the
new rules are creating a perception that marijuana is safe, even for
recreational use.

The Health Minister vigorously defended the government's approach, saying
it's an "innovation based on compassion" that is being thoroughly
researched. He also said the distinction between medical and recreational
use of the drug is clear.

"I think we can make distinctions that are guided by logic and reason. I
don't think anyone would argue against the medical use of morphine because
some people abuse it. People understand the distinction."