International Experience With Pharmaceutical Policy: Common Challenges and Lessons for Canada

Pharmaceuticals are the focus of increased scrutiny by public insurers. Between 1985 and 1998, drug expenditure in Canada increased by 226% - approximately double the increase in total expenditure on health. Prescribed and non-prescribed drugs now comprise the second-largest share of health care expenditures after hospitals, surpassing physicians’ services. The National Forum on Health called for common strategies across the provinces, to manage pharmaceuticals from a health policy perspective. At the same time, the federal government and several provinces are interested in promoting pharmaceutical research and development (R&D), as part of the advancement of a knowledge-based economy. In the past, debates about pharmaceutical policy centred on the balancing of cost-containment and access to needed pharmaceuticals. The creation of an environment more conducive to attracting pharmaceutical R&D introduces additional tensions that will, no doubt, require concessions in current policies to manage pharmaceutical expenditures. In addition, a significant R&D investment will have predictable “downstream” effects on other sectors, such as academic research. In this study, we describe the experience of 7 Western industrialized countries in controlling pharmaceutical budgets while maintaining access to medically necessary prescription medications. In addition, we describe the potential impact of these policies on pharmaceutical R&D and the efforts of these countries to create a favourable climate for fostering R&D within their borders. We identify tensions that arise between health policy and industrial policy goals, and broad questions of directions and choices.