Reducing the Health Care and Societal Costs of Disease: The Role of Pharmaceuticals

The Conference Board of Canada, 105 pages, July 11, 2013
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This report uses the experience of Ontario to better understand the impact of pharmaceutical innovation on health care costs and on other costs of disease borne by society such as productivity losses due to disease.

Document Highlights

The report finds that the added costs associated with pharmaceutical innovation were offset by reductions in health care resources and productivity losses associated with disease. In particular, the $1.22 billion spent on six classes of pharmaceutical drugs in 2012 generated offsetting health and societal benefits of nearly $2.44 billion.

Under a baseline projection of pharmaceutical demand over 2013–2030, all six classes of drugs examined provide health and societal benefits in excess of the estimated costs of treatment, with the ratio of benefits to costs increasing over the longer term.

By increasing patient compliance, overall health and societal benefits of patients using pharmaceutical therapy would increase. Likewise, over the longer term, new pharmaceutical innovation is projected to deliver health and societal benefits that outweigh the added costs associated with prescribing the new drugs.

Table of Contents

Executive Summary

Chapter 1—Background

Chapter 2—Overview of the Project

  • Stage 1
  • Stage 2
  • Stage 3
  • Stage 4
  • Stage 5

Chapter 3—The Recent Use and Costs of Pharmaceuticals in the Treatment of Disease in Ontario

  • ACE Inhibitors
  • Statins
  • ACE Inhibitors and Statins (Combined Therapy)
  • Prescription Smoking Cessation Aids
  • Biguanides
  • Inhaled Steroids
  • Biologic Response Modifiers

Chapter 4—The Economic Impact of Pharmaceutical Use in Ontario, 2007–2012

  • Results, by Each Drug Class
  • Summary Results—All Drug Classes

Chapter 5—Simulation of the Model to Reflect Base-Case Projections

  • Base-Case Results, by Treatment Class, 2013–30
  • Summary Results—All Drug Classes

Chapter 6—Simulation 1: Increased Patient Compliance With Drug Therapy

  • Increased Compliance Scenario Results, by Treatment Class, 2013–30
  • Summary Results—All Drug Classes

Chapter 7—Simulation 2: New Pharmaceutical Innovation

  • New Pharmaceutical Innovation Scenario Results, by Treatment Class, 2013–30
  • Summary Results—All Drug Classes

Chapter 8—Limitations

Chapter 9—Summary

Appendix A—Methodology and Assumptions

  • Assumptions
  • Overview
  • Pharmaceutical Efficacy
  • Compliance Rates
  • Event Rates
  • Average Cost of Disease
  • Health Care Event Costs
  • Societal Event Costs
  • Prescription Drug Purchases in Ontario
  • Prescription Drug Costs, 2013–30
  • Model Used to Project Disease and Risk Factor Prevalence
  • Attributable Risks and Prevalence for Disease
  • Macroeconomic Perspective of Pharmaceutical Innovation

Appendix B—2007–12 Results, by Drug Class

Appendix C—2012–30 Base-Case Results,by Drug Class

Appendix D—2012–30 Scenario 1 Results, by Drug Class

Appendix E—2012–30 Scenario 2 Results,by Drug Class

Appendix F—Bibliography

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