Sebastian Schneeweiss, M.D., Sc.D. Instructor in Medicine and Epidemiology Director for Policy Studies Division of Pharm

1. Designing Pharmacy Benefits to Improve Quality and Contain Costs Sebastian Schneeweiss, M.D., Sc.D. Instructor in Medicine and Epidemiology Director for Policy Studies Division of Pharmacoepidemiology and Pharmacoeconomics Brigham and Women’s Hospital and Harvard Medical School

2. Reference Drug Pricing in British Columbia (BC) Out-of-pocket contribution Reference price Total drug price RP is not a pricing policy but a reimbursement policy Paid by drug benefits program

3. Reference Pricing in BC • Introduction of reference pricing (RP) for ACE inhibitors and calcium channel blockers on January 1, 1997. • The new RP policy affects all elderly persons (65 years or older). • Reference pricing came with exemptions for frail elderly patients that were generously approved by Pharmacare.

4. Pharmacy savings in prevalent ACEI users 12 month savings: $6,700,000 Schneeweiss et al. J Can Med Assoc, 2002

5. Baseline level Expenditures for additional visits in prevalent ACEI users Additional expenditures for visits: $700,000 Schneeweiss et al. N Engl J Med 2002 Schneeweiss et al. J Clin Epi 2002

6. Reduced time between visits in patients who switched ACE inhibitors Schneeweiss et al. J Am Geriatr Assoc 2002

7. No effect on other health services • We concluded in earlier work that there is no increase in the incidence of hospital admissions or emergency room hospitalizations. • No effect on admissions to long-term care facilities. • No effect on mortality. Schneeweiss et al. N Engl J Med 2002

8. Pharmacy savings in incident ACEI users 12 month savings: $200,000 24 month savings: $800,000

9. Administrative costs for prior authorization of RP drugs Schneeweiss et al. Health Economics, submitted

10. No price changes in high-priced ACE inhibitors related to RP

11. Net health care savings