E-drug: NICE & its implications (cont'd)
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I think that the conference that was described is interesting. Any time
industry gets worried about an initiative it usually means that it thinks
that its profits are being threatened.
Co-payments are patient contributions towards the cost of a
prescription. They can either take the form of a fixed amount per
prescription or a percentage of the cost of the entire prescription/of
just the drug cost/of just the dispensing fee. Industry is usually in
favour of copayments. When governments cover the entire cost of a
prescription prices are usually kept low to keep government spending
low. When patients are paying some of the cost of a prescription then
government is not as worried about prices and will often allow prices
to rise somewhat because patients will cover the extra costs. This
obviously works in industry's economic interests. However, there is
evidence from trials in a variety of developed countries that
copayments have adverse effects on vulnerable segments of the
population that have trouble affording the copayments. People forgo
purchasing both necessary and unnecessary drugs which leads to
poorer health outcomes and in the end the costs to the health care
system are probably higher overall.
Loss leader means that companies sell drugs to hospitals below costs.
They do this for a couple of reasons. First, if a patient is started on a
drug in hospital they are likely to continue taking the drug once they
are released. The community price for the drug may be substantially
higher than what the hospital pays. Second, if doctors in training
programs become accustomed to prescribing a particular brand of a
drug while they are working in hospitals they are likely to carry that
practice forward once they have finished their training. On both
accounts, the industry gains and therefore companies are willing to
take a loss on hospital sales of some, but by no means all, drugs. I
would suspect that you find companies selling below cost to hospitals
in areas where there is a lot of competition between essentially similar
products.
Joel Lexchin MD
121 Walmer Rd.
Toronto, Ontario
CANADA M5R 2X8
Phone: (416)-964-7186
Fax: (416)-923-9515
e-mail: joel.lexchin@utoronto.ca
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