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Competitiveness, Prosperity and the Noble Leverage of Big Pharma Interests

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“Total health care spending in Ontario is expected to reach an all-time high of $80 billion in 2013, of which $51 billion was spent by the Ontario government … Despite these exceptional resources, Ontario does not achieve high value for health care dollars compared with international peers.”

These numbers are well known in Ontario but they are less often accompanied with the assertion that value is not being achieved.  They are from the most recent working paper published by Roger Martin and his Institute for Competitiveness and Prosperity.  At the heart of Martin’s argument is that Ontario both misunderstands the drivers behind rising expenditures and lacks the institutional capacity to control them.  The paper offers eight recommendations which are inter-related. I’d like to comment on just one here.

Martin suggests that a major reorientation of pharmaceutical policy is needed because Ontario spends significantly more on drugs than peer countries, while simultaneously offering less public coverage for out-of-hospital drugs. Drugs are the second most significant driver of Ontario government spending.  Hospitals account for 29% ($23 billion), drugs are 17% (~$14 billion in 2013) and physicians are 16% (~$13 billion in 2013).  Over the past three decades real per capita spending growth on drugs has been a whopping 312%.  Martin recommends implementing an Ontario-Made pharmacare program that is publically administered and universal.  He argues that such a program would ensure better access to medications and increase the ability to control drug spending.

A publically administered and universal drug program would take years, perhaps decades, to implement in Ontario.  In parallel to exploring the potential for such a program, perhaps Martin’s Institute could investigate how pharma’s motivations for improving medication-adherence and customer retention could be leveraged to create a win-win-win-win situation for pharma, patients, providers and system payers.  For example, pharma could fund personalized point-of-care patient education for prescribed drugs to improve patient understanding of the planned treatment and associated recommendations for lifestyle changes.  They could also fund personal health coaching to motivate and support patients in adhering to the regime.  This has the potential to address pharma’s strategic initiatives to “go beyond the pill” while improving outcomes for patients.  It also has potential to reduce health services utilization due to adverse events related to non-adherence.  Such a model might be considered a noble use of big pharma funds.

In his Longwoods presentation of the paper, Martin offered this commentary on the fact that Ontario physicians have become the highest paid in Canada over the last decade (average gross clinical payment per physician in 2011-12 was $375K).  “That is an enormous investment in physicians in this province…  If we don’t take advantage of that to make our system more efficient and more effective we have wasted that money in my estimation.  And that would be unjustifiable.  But I think there is a win-win, which is to [enlist physician leadership to help] make this system work better.”  His recommendation should also be applied to pharma.