We disagree with Maurice McGregor's suggestion that the real cause of the uncontrolled growth in expenditures of the Ontario Drug Benefits Program (ODBP) is the belief on the part of the program's administrators that their resources will not be limited. McGregor's letter indicates confusion between the case of unlimited resources and the case in which resources are allowed to grow. In a world with unlimited resources, there is no scarcity and thus choices need not be made between different programs (i.e., there are no opportunity costs). In this situation, maximizing total health improvements requires only information on effectiveness; no information about costs is needed. In contrast, in the situation where program resources (such as those for the ODBP), even if scarce, are allowed to increase, choices will be needed: the additional resources must be taken from elsewhere, and those resources are insufficient to support all new interventions. Contrary to McGregor's claim, the information provided by the incremental cost- effectiveness ratio (ICER) is insufficient to identify the efficient use of additional resources (see Appendix 1 to our commentary1). Only by considering opportunity costs can the “best value for those resources” be determined.
McGregor's assessment that ODBP administrators believe that resources “will, in fact, not be limited” is not supported by evidence. In his description of the decision-making process of the ODBP, Laupacis stated, “Given that resources for health care are limited, it seems sensible . . . that cost-effectiveness is the main criterion used to determine which drugs are reimbursed from the public purse.”2 Administrators were led to believe that selecting programs on the basis of ICER values would maximize total health improvements from whatever resources were made available. Decision-makers can be blamed for consistently failing to recognize that the use of such methodology is a prescription for uncontrolled growth in expenditures, but they should not be blamed for adopting the methodology in the first place.
Perhaps researchers will, at some point, admit that promoting simple tools such as the ICER represents a departure from economic principles and fails to address the decision-makers' problem, as illustrated by the uncontrolled (but predictable3) growth in ODBP expenditures. If not, there might be grave consequences (e.g., cancellation of a program perceived by government as unaffordable). We recommend giving economics principles a chance before it is too late.
Amiram Gafni Professor Stephen Birch Professor Department of Clinical Epidemiology and Biostatistics McMaster University Hamilton, Ont.