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Provinces could save millions in prescription drug costs, new research finds

Toronto, June 26, 2012

By Leslie Shepherd

Dr. Chaim Bell
Dr. Chaim Bell

Taxpayers could save millions of dollars if hospitals and provincial governments harmonized their prescription drug plans, new research suggests.

Hospitals in Canada manage their formularies – the list of generic and brand-name drugs they dispense – independently. Yet many patients are discharged on medications they will have to purchase through publicly funded drug benefits programs.

Dr. Chaim Bell, a physician and researcher at St. Michael's Hospital and scientist at the Institute for Clinical Evaluative Sciences, noted that health care expenditures in Canada are on a steep upward climb, reaching $191 billion in 2010.

Medications represent an increasing share of those costs, currently around 16 per cent. A few classes of drugs account for the bulk of those expenses. For instance, the annual cost of angiotensin-converting enzyme (ACE) inhibitors in Canada doubled over the previous ten years to reach $956 million in 2006.

Dr. Bell decided to investigate how much public money could be saved if hospitals, when starting patients on new medications, prescribed the cheapest one. His results were published in the journal PLoS One today.

Using data from ICES, he looked at three commonly prescribed medications that account for a large chunk of prescription drug costs in Canada:

  • proton pump inhibitors (used to treat stomach ulcers and reflux acid)
  • ACE inhibitors and
  • angiotensin receptor blockers (both of which are used for high blood pressure, as well as treating heart failure and preventing kidney failure in diabetics)

The cost for filling all PPI, ACE inhibitor and ARB prescriptions in Ontario for one year, April 2008 to March 2009, was $2.48 million, $968,000 and $325,000 respectively.

Substituting the least expensive version of each drug could have saved $1.6 million, or 47 per cent, for PPIs, Dr. Bell found. It could have saved $162,000, or 17 per cent, for ACE inhibitors and $14,000, or four per cent, for ARBs in the year following the patients’ discharge from hospital.

"At a time when every health care dollar matters and has to be spent wisely, these findings suggest that hospitals and governments should look at ways to break down the silos around prescription drug purchasing and dispensing," Dr. Bell said.

"It's all taxpayers’ money. Whether it's billed to a hospital cost centre or a government drug plan cost centre, it all comes from the same source."

About St. Michael’s Hospital

St. Michael’s Hospital provides compassionate care to all who enter its doors. The hospital also provides outstanding medical education to future health care professionals in more than 23 academic disciplines. Critical care and trauma, heart disease, neurosurgery, diabetes, cancer care, and care of the homeless are among the Hospital’s recognized areas of expertise. Through the Keenan Research Centre and the Li Ka Shing International Healthcare Education Center, which make up the Li Ka Shing Knowledge Institute, research and education at St. Michael’s Hospital are recognized and make an impact around the world. Founded in 1892, the hospital is fully affiliated with the University of Toronto.

About ICES

ICES is an independent, non-profit organization that uses population-based health information to produce knowledge on a broad range of health care issues. Our unbiased evidence provides measures of health system performance, a clearer understanding of the shifting health care needs of Ontarians, and a stimulus for discussion of practical solutions to optimize scarce resources. ICES knowledge is highly regarded in Canada and abroad, and is widely used by government, hospitals, planners, and practitioners to make decisions about care delivery and to develop policy.

Media Contacts

For more information or to interview Dr. Bell, please contact:

Leslie Shepherd
Manager, Media Strategy
St. Michael's Hospital
416-864-6094 or 647-300-1753
shepherdl@smh.ca