Pharmacy Management Methods in Canada, Including Lower-Cost Therapy for Heartburn

■■ Pharmacy Management Methods in Canada, Including Lower-Cost Therapy for Heartburn Total health care spending in Canada was Can $3,003 per capita in 2003, nearly 50% less than the $5,635 per capita spent in the United States in the same year. Steinbrook, in a recent commentary, explained that 70% of health care funding in Canada comes from the public sector, and the private sector, by law, cannot provide either hospital or physician services, except supplemental coverage for perquisites such as private hospital rooms. Private funding of health care services in Canada is concentrated in pharmacy, dental services, optometry, home care, and other services not covered by the government. There is, however a dizzying array of regulations among the 10 provinces in Canada, which have the responsibility for managing health care. Review of the heartburn class of drugs, an important category of spending in Canada as in the United States, provides insight into the challenges and opportunities in managing the pharmacy benefit in Canada. Since 2002, the Canadian proton pump inhibitor (PPI) market has been affected by 2 specific opportunities for drug cost savings: generic omeprazole base and low-cost rabeprazole. There are currently 6 PPIs on the Canadian market: brand-name omeprazole magnesium, generic omeprazole base, esomeprazole, lansoprazole, pantoprazole, and rabeprazole. Omeprazole overthe-counter (OTC) has presented a valuable opportunity for cost savings for U.S. plan sponsors, an outcome that has been described in previous articles in JMCP, Health Canada has not yet approved any PPI for OTC sale in Canada. In addition, Canadian pharmacy benefit managers do not engage in rebate contract arrangements with pharmaceutical manufacturers. Therefore, Canadian drug plan sponsors have had to explore other benefit design options to obtain drug cost savings in the PPI class. This issue of JMCP explores one such Canadian plan design with respect to PPI drug cost savings. Canada has 10 provinces. Each province provides some level of public drug insurance for low-income seniors and recipients of social assistance. Some provinces provide universal drug coverage; some provide universal coverage to all seniors. Most provinces also provide access to coverage for those whose outof-pocket drug costs are high in relation to their income. In some provinces, the public plans are the primary drug claim payers, whereas other provinces have designated themselves as the payers of last resort. Each provincial plan is unique in terms of eligibility and plan design. The relationships between public and private plans in Canada can be complex, and the proper coordination of available public and private coverage is important to Canadian plan sponsors. The article by Mabasa and Ma in this issue of JMCP should be considered in the context of the Canadian PPI market and the relationships between public and private drug plans. Rabeprazole was introduced to the Canadian market in June 2002 at a price significantly below that of the other PPIs available at the time. The favorable pricing of rabeprazole presented a potentially valuable opportunity for public and private drug plans throughout Canada. Various plan designs have since been implemented by public drug plans to promote the use of rabeprazole over the other PPIs that are higher in cost. These plan designs have included: • Prior authorization for PPIs that require the initial use of rabeprazole and/or generic omeprazole base (in British Columbia, Nova Scotia, and Newfoundland and Labrador; Manitoba implemented similar requirements in March 2006); • Reference-based or maximum-allowable-cost (MAC) programs (in Saskatchewan); • Granting full (unrestricted) benefit status to rabeprazole when other PPIs in the formulary are limited-use drugs (in Ontario [the other PPIs are covered only when specific clinical criteria are met. The most commonly used criteria include nonerosive gastroesophageal reflux (GERD) disease after failure of histamine2-receptor antagonist therapy (firstline treatment for erosive GERD), confirmed peptic ulcer therapy, and prophylaxis induced by nonsteroidal antiinflammatory drugs]).


■■ Pharmacy Management Methods in Canada, Including Lower-Cost Therapy for Heartburn
Total health care spending in Canada was Can $3,003 per capita in 2003, nearly 50% less than the $5,635 per capita spent in the United States in the same year. 1 Steinbrook, in a recent commentary, explained that 70% of health care funding in Canada comes from the public sector, and the private sector, by law, cannot provide either hospital or physician services, except supplemental coverage for perquisites such as private hospital rooms. 2 Private funding of health care services in Canada is concentrated in pharmacy, dental services, optometry, home care, and other services not covered by the government. There is, however a dizzying array of regulations among the 10 provinces in Canada, which have the responsibility for managing health care. 3 Review of the heartburn class of drugs, an important category of spending in Canada as in the United States, provides insight into the challenges and opportunities in managing the pharmacy benefit in Canada.
Since 2002, the Canadian proton pump inhibitor (PPI) market has been affected by 2 specific opportunities for drug cost savings: generic omeprazole base and low-cost rabeprazole. There are currently 6 PPIs on the Canadian market: brand-name omeprazole magnesium, generic omeprazole base, esomeprazole, lansoprazole, pantoprazole, and rabeprazole. Omeprazole overthe-counter (OTC) has presented a valuable opportunity for cost savings for U.S. plan sponsors, an outcome that has been described in previous articles in JMCP, [4][5][6] Health Canada has not yet approved any PPI for OTC sale in Canada. In addition, Canadian pharmacy benefit managers do not engage in rebate contract arrangements with pharmaceutical manufacturers. Therefore, Canadian drug plan sponsors have had to explore other benefit design options to obtain drug cost savings in the PPI class. This issue of JMCP explores one such Canadian plan design with respect to PPI drug cost savings.
Canada has 10 provinces. Each province provides some level of public drug insurance for low-income seniors and recipients of social assistance. Some provinces provide universal drug coverage; some provide universal coverage to all seniors. Most provinces also provide access to coverage for those whose outof-pocket drug costs are high in relation to their income. In some provinces, the public plans are the primary drug claim payers, whereas other provinces have designated themselves as the payers of last resort. Each provincial plan is unique in terms of eligibility and plan design. The relationships between public and private plans in Canada can be complex, and the proper coordination of available public and private coverage is important to Canadian plan sponsors.
The article by Mabasa and Ma in this issue of JMCP 7 should be considered in the context of the Canadian PPI market and the relationships between public and private drug plans. Rabeprazole was introduced to the Canadian market in June 2002 at a price significantly below that of the other PPIs avail-able at the time. The favorable pricing of rabeprazole presented a potentially valuable opportunity for public and private drug plans throughout Canada. Various plan designs have since been implemented by public drug plans to promote the use of rabeprazole over the other PPIs that are higher in cost. These plan designs have included: • Prior authorization for PPIs that require the initial use of rabeprazole and/or generic omeprazole base (in British Columbia, 8 Nova Scotia, 9  Generic omeprazole was introduced to the Canadian market in January 2004. It was withdrawn temporarily because of a patent dispute on May 18, 2005, and was finally reinstated 2 weeks later on June 3, 2005. 14 Despite the low cost of generic omeprazole in Canada, most provinces have realized little utilization of this product because of regulatory barriers to interchangeability. Brand-name omeprazole magnesium (tablets) and generic omeprazole base (capsules) are considered noninterchangeable in most provinces because the generic version contains a different salt and is provided in a different dosage form (capsule vs. tablet). Manitoba is the only Canadian province to date that has made generic omeprazole (tablet) fully interchangeable with brand-name omeprazole magnesium (capsule). 15 Two provincial drug plans, Saskatchewan and Newfoundland and Labrador require the use of both rabeprazole and generic omeprazole base before other PPIs will be eligible for coverage. 10,12 Patent disputes, combined with issues regarding interchangeability and availability, have slowed the uptake of generic omeprazole everywhere in Canada except Manitoba.
Other provinces (Alberta 16 and Quebec 17 ) continue to provide full benefits for PPIs or require prior authorization for all PPIs without preference to any particular product (Prince Edward Island 18 and New Brunswick 19 ). Esomeprazole is listed by provincial plans in British Columbia, Saskatchewan, and Quebec (subject to any applicable plan designs with respect to PPIs), but is not listed by other provinces.
Measures taken by public plans to encourage the use of rabeprazole have been generally successful for the public payers. 20

C O M M E N TA RY
In British Columbia, the implementation of a preferred-PPI policy promoting rabeprazole has led to desired utilization changes without negatively contributing to gastrointestinal bleed rates. 21 However, measures taken by various provincial plans are generally believed to have had only a limited effect on physician prescribing habits outside the populations served by the provincial plans. Table 1 illustrates the share of claim (prescription) volume for each PPI in Canada by province and age band. 22 Manitoba' s acceptance of omeprazole interchangeability is clearly evident in the 36% prescription market share for persons younger than 65 years and 45% for persons 65 years or older, shares that are 4 times higher than in Quebec, the second highest-use province for generic omeprazole (base); Manitoba' s use far exceeds that of any other province. Those provinces that have implemented policies favoring rabeprazole (British Columbia, Saskatchewan, Ontario, Nova Scotia, and Newfoundland and Labrador) typically show higher utilization of this product but often less utilization in nonseniors, who are generally less likely to be eligible for public plan reimbursement. Esomeprazole utilization is highest in those plan members under the age of 65 years (these individuals are least likely to be eligible for reimbursement under their provincial plans). Esomeprazole utilization is also generally higher in provinces where the drug is listed by the provincial plan (British Columbia, Saskatchewan, and Quebec).
The apparent disparity between public and private plans in PPI utilization has reinforced the need for Canadian private plan sponsors to encourage the use of rabeprazole and generic omeprazole. In their article, Mabasa and Ma explore the use of a MAC program as applied to the PPI category in an Ontariobased employer-sponsored drug plan. Although reference-based or MAC plan designs have been implemented in other provinces for various therapeutic drug categories (British Columbia 23 and Saskatchewan 12 ) and they have been considered in other provinces (Ontario 24 ), they remain uncommon among Canadian private plan sponsors. Physician, pharmacy, and patient resist-

Public Drug Plan Formulary Features Pertaining to PPIs
Prior authorization program requires use of rabeprazole before other PPIs will be reimbursed. 8 There are no PPI restrictions. 16 MAC program pays $1.51 per tablet or capsule for PPIs. 12 Generic omeprazole is fully interchangeable with brandname omeprazole magnesium. 15 Rabeprazole receives full benefit status. For other PPIs, clinical criteria must be satisfied. 13 There are no PPI restrictions. 17 Prior authorization is required for all listed PPIs. 19 Prior authorization program requires use of rabeprazole and generic omeprazole before other PPIs will be reimbursed. 9 Prior authorization is required for all listed PPIs. 18 Prior authorization program requires use of rabeprazole and generic omeprazole before other PPIs will be reimbursed. 10

*Esomeprazole is not a benefit of most provincial public plans. It is a full benefit in Quebec and is available in British Columbia and Saskatchewan as an alter
native after treatment failure. MAC = maximum allowable cost; PPI = proton pump inhibitor.  25 reportedly considered implementing such a plan design (reference-based pricing had been previously identified by the ODB Program as a policy option for government consideration). 26,27 Some of this resistance was likely initiated and facilitated by pharmaceutical manufacturers, but it was also significantly driven by the Ontario Pharmacists' Association. Ontario pharmacists were concerned that significant changes were being considered for the public drug plan without meaningful consultation with the pharmacy community. 28 The MAC intervention described by Mabasa and Ma for an Ontario private plan sponsor is similar to the public plan design implemented in Saskatchewan for PPIs. The MAC program described by Mabasa 7 It was also successful in increasing the share of PPI claims for rabeprazole to a level similar to that seen in Saskatchewan. It did not, however, fully bridge the gap seen in Ontario between rabeprazole use in seniors (eligible for the public drug plan) and nonseniors (not eligible for the public plan).

Summary of PPI Market Shares (% of Pharmacy Claims) by Province for Seniors and Nonseniors in Canada 22
While there should be no anticipated adverse effects as a result of switching from one PPI to another, the study by Mabasa and Ma did not examine outcomes other than drug cost outcomes. Part of the reason for not measuring nondrug outcomes is that medical costs, such as physician visits and hospitalizations, are fully insured by public health plans in Canada while drug costs are often privately insured.
Readers of the article by Mabasa and Ma will note that the average cost per claim identified in the article is higher than would be expected had every claim been reduced to the reference price. There are 2 primary sources for this discrepancy. First, and as noted by the authors, 7 an exception process exists to allow payment of nonpreferred PPIs in some circumstances. This is consistent with existing practice in Canadian public drug plans to provide an exception process to allow payment of higher-cost agents for those experiencing treatment failure with lower-cost agents. For example, in Saskatchewan (the only public-payer MAC program for PPIs in Canada), exceptions to the MAC policy may be granted to those who have failed treatment with 2 PPIs priced within the MAC policy (currently only rabeprazole and generic omeprazole meet this criteria) or for those requiring a PPI by nasogastric tube. 12 Second, it is important to note that a number of the covered members of this group resided in the province of Quebec. Quebec legislation mandates that private drug plans offer coverage that, at a minimum, corresponds with the coverage provided by the Régie de l'assurance maladie du Québec (the Quebec provincial public plan). 29 As all of the available PPIs are full benefits of the public plan, the administration of a MAC plan design becomes difficult in Quebec. Now that the direct cost-savings potential of a MAC program has been demonstrated, it will be interesting to see if these results will lead to wider implementation and acceptance of MAC programs in Ontario and the rest of Canada. The opposition to such programs shown, to date, by the physician and pharmacist communities may be overwhelmed by increasing evidence of the effectiveness of PPI formulary restrictions favoring less-expensive PPIs.