OTTAWA - Soaring drug bills in Canada could be cut if doctors simply paid attention to the cost of the medications they prescribe, says a new federal report.
The study, commissioned by Industry Canada, found that Canadian physicians are generally oblivious to drug prices and often prescribe an expensive pharmaceutical when a cheap one would do.
"In Canada, there is no formal mechanism that credibly brings cost into the physician's decision-making process'' when issuing prescriptions, says the report by IMS Health Consulting Inc.
The situation is better in the United States and Great Britain, where health-management systems that do take drug prices into account help reduce pharmacy bills.
"Incorporating appropriate cost considerations into the medical decision making process could offer reduced costs to the health care system,'' the report concludes.
The Feb. 1, 2007, document was obtained by The Canadian Press under the Access to Information Act. IMS Health Consulting fought its release in Federal Court for several months before recently withdrawing the legal challenge.
The study examined what happens to drug sales when cheaper generic versions of pharmaceuticals go on sale after the expiry of Canada's eight-year patent protection for the brand-name equivalent.
After several months, the generic version typically supplants the brand-name version, and brand-name drug companies stop promoting their own version. The process in Canada is driven by provincial drug formularies that allow pharmacists to quietly substitute the generic version even though a doctor may have prescribed a brand name, allowing provinces to save on pharmacare programs.
But the appearance of a generic drug has almost no impact on sales of closely related medications in the same class, the study found, citing the example of statins -- drugs that lower cholesterol levels.
Although the generic statin known as simvastatin is now available, it has not cut into sales of the more expensive Lipitor, another statin that has become Canada's first drug to hit $1 billion in sales.
Lipitor, which remains protected by patent, is chemically similar to simvastatin though it is not the same molecule. However, health-care experts say the cheap generic is often just as effective for patients as the more expensive brand-name drug in the same class.
But doctors, who are bombarded with marketing materials promoting brand names, simply do not consider the cost burden to the patient or to government pharmacare plans when writing prescriptions. The study suggests that were there a mechanism to make them aware, the health system would save money as happens in the United States through so-called HMOs, or health maintenance organizations, that keep a close eye on the bottom line.
"My experience is that doctors in this country are remarkably ignorant about price,'' Dr. Gordon Guyatt, a health professor at Hamilton's McMaster University and a doctor with 25 years' experience, said in an interview.
"It's not that people aren't interested -- it's all the pressures of everything you've got to remember and deal with. It's very easy to ignore.''
The IMS findings mirror those of Dr. Joel Lexchin, co-author of a study last month that demonstrated just how little physicians know about drug prices.
"One of the surprising things we found was that the more expensive the drug is, the more doctors underestimate the price, and the less expensive a drug is, the more they overestimate the price,'' said Lexchin, an emergency physician and professor at York University's School of Health Management and Policy.
Lexchin's paper, written with G. Michael Allan and Natasha Wiebe, concludes that doctors' ignorance of costs "could have profound implications for overall drug expenditures. Much more focus is required in the education of physicians about costs and access to cost information.''
Lexchin notes that other brand-name drugs in a class sometimes do work better for patients than cheaper generics, "but most of the time they don't,'' and the extra dollars are wasted.
He and Guyatt argue that computer systems that allow doctors to check drug prices before they prescribe could go a long way to cutting Canada's drug bill, despite the initial capital cost.
The IMS study cautions that any move to make drug prices an integral part of doctors' decision making will have to be "balanced'' to ensure brand-name drug companies still have sufficient revenues to invest in research.
The untendered contract with IMS cost taxpayers $74,200. An Industry Canada spokeswoman says the study was distributed internally to the Competition Bureau, Health Canada and other federal organizations.
