Excess med spending in Canada is pouring billions down the drain

by Leo Almazora13 Jan 2017
Over the last five years, Canada has squandered $15 billion on highly priced prescription drugs, reveals research by health benefits company Express Scripts Canada for CBC’s the fifth estate.

Between 2011 and 2015, Canadian employer-funded insurance plans have wasted more than $3 billion a year on expensive drugs with cheaper alternatives, as well as unnecessary dispensing fees. Over that period, average annual expenditure by private insurers on drugs was approximately $16 billion.

“It's quite a staggering number,” commented John Herbert, Express Scripts Canada’s director of strategy, product development, and clinical services. Herbert noted that Canadians could save money by going for lower-cost, clinically effective options.

A major example is diabetes medication: clinical guidelines from the Diabetes Association of Canada recommend that doctors prescribing the generic Metformin (which costs just $65 per year) as a first option, but Express Script Canada’s research found that more than $100 million was wasted by ignoring those guidelines.

While there may be medical reasons for that, experts say that wouldn’t explain everything. “My guess is that drug promotion is very influential in terms of doctors not following the guidelines," said Toronto family doctor Sheryl Spithoff.

Doctors are often dependent on doctors to learn about new drugs and their potential benefits, which experts say invariably leads to a conflict of interest.

In a hidden camera investigation orchestrated by the fifth estate, a doctor wore a hidden camera to the Family Medicine Forum, the largest annual conference for family physicians held in Vancouver last November.

The doctor recorded instances of drug representatives strongly suggesting that the DAC’s guidelines are “backwards” and that their companies’ diabetes drugs could help people lose weight – a tactic that’s tantamount to off-label prescription. The representatives mentioned possible side effects or risks only when the doctor prompted them.

“We really need to think carefully about making sure that a drug benefits system in this country, a pharmaceutical strategy in Canada, is grounded entirely on good quality clinical evidence,” said University of British Columbia health economist Steve Morgan. “Not over a box of doughnuts at a meeting with a sales rep or on the floor of a convention center.”

Speaking for private insurers in Canada, CLHIA Vice-President Stephen Frank told the fifth estate that insurance companies offer tools to help cut waste on private workplace drug plans, and more and more employers are starting to use them.

“That's taking a bit of time on the private side,” Frank said. “It's a question of how quickly it's going to move, not a question of if.”


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Universal pharmacare is the cure for high Canadian drug costs, says expert 
Founder of ‘Moneyball for health benefits’ says employee plans unsustainable 
 

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