Elsevier

Health Policy

Volume 77, Issue 3, August 2006, Pages 339-351
Health Policy

The Common Drug Review: A NICE start for Canada?

https://doi.org/10.1016/j.healthpol.2005.08.006Get rights and content

Abstract

Prescription drugs are one of the fastest growing cost components of modern health care systems. Efforts to control escalating costs while simultaneously maximizing population health outcomes have led many countries to implement restrictive criteria on the funding of certain drugs. While drugs are licensed for sale based on evidence of safety and efficacy versus a placebo, many funders now require evidence of clinical- and cost-effectiveness compared to existing drugs as part of their reimbursement criteria. In some countries, concerns about duplication of drug assessment and administrative effort across different jurisdictions have led to experimentation with various forms of centralized drug review processes. Centralized drug reviews strive to standardize, inform, and improve drug reimbursement decisions through critical assessments of comparative clinical- and cost-effectiveness. The ultimate objective is to inform formulary listing decisions that both maximize health outcomes and achieve good “value for money”. This paper describes the Common Drug Review (CDR), a uniquely Canadian version of a centralized drug review process, and compares it with the much-studied National Institute for Health and Clinical Excellence (NICE) in the United Kingdom. Through this analysis, which draws on prior critiques and experiences of NICE, we highlight several critical issues for pharmaceutical priority setting that must be considered in the operation and appraisal of centralized drug review processes. These include the selection of drugs for review, centralized versus decentralized decision-making, receptor capacity at local decision making levels, and public participation.

Introduction

Drug benefit providers around the world are increasingly implementing restrictions on the coverage of pharmaceutical products in efforts to control soaring prescription drug costs. While drugs are licensed for sale based on evidence of safety and efficacy versus a placebo, many funders now require additional evidence of clinical- and cost-effectiveness compared to existing drugs as part of their reimbursement criteria. Such information is not usually generated in drug licensing processes. Funders must therefore collect and critically assess evidence of comparative clinical- and cost-effectiveness after a product is licensed for sale. In some countries, concerns about duplication of drug assessment and administrative effort across different jurisdictions have led to experimentation with various forms of centralized drug review processes. The ultimate objective is to inform formulary listing decisions that both maximize health outcomes and achieve good “value for money”.

This paper describes the Common Drug Review (CDR), a uniquely Canadian version of a centralized drug review process. We first review the origins of the CDR, describe its relationship with provincial formulary decision-making processes, and present evidence on the uptake of its early recommendations. We then compare the CDR with the much-studied National Institute for Health and Clinical Excellence (NICE) (formerly known as the National Institute for Clinical Excellence) in the United Kingdom, a system comparable to the CDR with centralized recommendations combined with decentralized funding. Using a comparative framework that draws on prior critiques and experiences of NICE, we highlight several critical issues for pharmaceutical priority setting that must be considered in the operation and appraisal of centralized drug review processes. These lessons, while important for Canadian decision makers, generalize beyond the CDR experience.

Section snippets

Pharmaceutical policy in Canada

Pharmaceuticals have accounted for the second largest share of Canadian health expenditures since 1997 [1]. Yet pharmaceuticals consumed outside hospital settings are not included under the Canada Health Act, the federal–provincial cost-sharing agreement that ensures national standards for universal public health insurance. As a result, there are currently 13 provincial and territorial drug plans, as well as several federal drug programs, in operation across Canada. Each has independently

The Common Drug Review

The CDR was established in 2003 as a model of centralized review for new drugs on behalf of participating drug plans. All federal, provincial and territorial drug benefit plans are participating in the CDR process, except for the province of Québec [7]. The CDR is funded by the provinces and managed by and housed at the Canadian Coordinating Office for Health Technology Assessment (CCOHTA), an organization at arms length from the government specializing in health technology assessment.

The

A NICE comparison

The Canadian CDR can be likened in certain ways to the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom (Table 2). Fundamentally, both systems issue centralized coverage recommendations within an environment of decentralized funding. NICE is an independent organization responsible for providing national guidance on treatments and care to the National Health Service (NHS) in England and Wales. NICE issues guidance on a range of health technologies, including

Pharmaceutical priority setting

Since its inception, NICE has attracted international attention and criticism for its national guidance and attempts at managing market entry of health technologies [17], [18], [19], [20], [21], [22], [23]. Three main issues are of particular relevance to other jurisdictions, including Canada. The first pertains to the drug review selection process; the second focuses on the centralization of decision-making; and the third relates to the capacity of decision makers to use evidence in local

Discussion

The CDR is a new initiative that evolved out of federal, provincial, and territorial drug review processes in Canada. Bearing resemblance to NICE in certain respects, the CDR process appears to address some of the critical issues NICE has faced, including, for example, recognizing the value of a transparent drug selection process, and the importance of enabling for the consideration of local opportunity costs in local drug coverage decisions. This may reflect learning from international

Conclusion

The Canadian CDR is a model of centralized review for all new chemical entities and new combination products that produces evidence-based, non-mandatory recommendations to participating drug programs. This combination of critical centralized assessment with decentralized decision-making devolves ultimate responsibility for drug subsidy decision-making to the point where local opportunity costs and priorities can be measured, provided there is adequate local receptor capacity.

In this paper, we

Acknowledgements

The Commonwealth Fund, a New York City-based private independent foundation, supported this research. SM is supported in part by the Canadian Institutes of Health Research and the Michael Smith Foundation for Health Research. CM is supported in part by the Canadian Priority Setting Research Network. The authors would like to thank Dr. Cam Donaldson, University of Newcastle, for his feedback on earlier version of this paper. The views presented here are solely those of the authors.

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