Reference-based refinements
===========================

* John Graham

The claim by Sebastian Schneeweiss and colleagues1 that “between 1995 and 1997, when [reference-based pricing] was actively expanding, increases in PharmaCare's costs were contained” disagrees with data published by the Canadian Institute for Health Information2 (CIHI). According to CIHI, BC PharmaCare's expenditures increased from $329 million in 1995 to $410 million in 1997, a 25% increase in 2 years. Over the same period, total provincial and territorial spending on public pharmaceutical benefits for the rest of Canada decreased by 2%, from $2720 million to $2668 million.2 Furthermore, Schneeweiss and colleagues' failure to observe negative health consequences from reference-based pricing may result from the fact that only 5353 of 37 362 subjects switched from a restricted to a reference angiotensin-converting enzyme (ACE) inhibitor when the policy was established. The majority chose to pay the difference in cost themselves or received exemption through special authority. The resulting lack of statistical power meant that a 19% increase in hospital admissions for “switchers” in the 2 months after implementation of reference-based pricing for ACE inhibitors was considered insignificant because the confidence interval was –1% to 42%.3 Therefore, the argument that reference-based pricing was not associated with negative health outcomes is unconvincing.

**John Graham** Director Pharmaceutical Policy Research The Fraser Institute Vancouver, BC

*Competing interests*: The Fraser Institute has received charitable donations from a number of pharmaceutical manufacturers; these donations make up less than 3% of the Institute's budget. Mr. Graham has received travel assistance and an honorarium from one of these companies.

## References

1.  1. Schneeweiss S, Maclure M, Dormuth C, Avorn J. Pharmaceutical cost containment with reference-based pricing: time for refinements [editorial]. CMAJ 2002; 167(11):1250-1.
    
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2.  2. Canadian Institute for Health Information. *Drug expenditures in Canada, 1985-2001*. Ottawa: The Institute; 2002. p. 44, 92.
    
    

3.  3. Schneeweiss S, Walker AM, Glynn RJ, Maclure M, Dormuth C, Soumerai SB. Outcomes of reference pricing for angiotensin-converting-enzyme inhibitors. N Engl J Med 2002;346(11):822-9.
    
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