I tend to try to hide in the shadows, so it's okay.
My name is Doug Coyle. Thank you very much for giving me the opportunity to present my views today.
I am a health economist and have worked in this research area for the past 24 years. I am based at the University of Ottawa, where I teach graduate students on the methods to appraise new technologies in terms of their costs and benefits and whether or not they represent value for money.
I've conducted a number of studies assessing the cost-effectiveness of a range of technologies, including drugs, devices, vaccinations, screening programs, and exercise programs.
I'm a member of the Ontario Ministry of Health's Committee to Evaluate Drugs, where I help make recommendations on the funding of new pharmaceuticals. I was previously a member of the Canadian Expert Drug Advisory Committee, which gives similar advice at a pan-Canadian level, and also of the Ontario Health Technology Advisory Committee, which makes recommendations on the funding of new technology to hospitals.
I have in the past consulted for industry, but have no such commitments at present.
The topic today is the cost of adopting new technologies into the health care system. I'm going to take a very broad definition of what we mean by technology. I'll assume that we refer not just to devices, diagnostic tools, and information technology, but also to drugs, health care practitioners, and other health-related services, including those related to the prevention and not just the treatment of disease.
I have three points to make today. The first point I'd like to raise is that not all new technologies represent value for money. Despite the claims of manufacturers, most new technologies are unlikely to save money. The downstream costs that are averted through their adoption are not sufficient to cover the upstream costs of their purchase.
We need to assess whether prices given for new technology are justified given the benefits that are being forecasted. Thankfully there are techniques to assess the cost-effectiveness or value for money of new technologies. These techniques are mature. We can make decisions using all available evidence through synthesizing the information available. We should focus on the opportunity costs of adopting new technologies. In other words, what are the health care interventions and disease prevention interventions that we cannot adopt because of the costs of taking on these new technologies?
I'd like to give you today the example of Soliris. Soliris is a new drug for the treatment of a disease called paroxysmal nocturnal hemoglobinuria. Thankfully, we call it PNH, which makes it a little easier for us to follow.
PNH is a rare blood disorder. Soliris is effective. It reduces the incidence of thromboembolism, the major cause of mortality in this disease, and reduces the need for blood transfusions, the major management cost of the disease. However, Soliris costs $500,000 per patient per year. The funding of Soliris would cost almost $25 million per annum even if only 20% of those eligible would receive treatment. With that $25 million, we could provide many other services in terms of health care to Canadians, which would provide much greater health benefits.
The second point I want to raise is how best to provide support for innovative products. When I present my research, such as the Soliris study, a question I often get from the audience is, “When will Canada start paying for innovation?” The implication of this question is that by restricting or denying funds to new technologies, we are ignoring innovative products. However, we have to define what we mean by innovation. Innovation must include considerations of effectiveness and cost-effectiveness.
In Canada we do reward innovation. We provide patent protection to new products and we give tax credits for research and development. Funding technologies that do not represent value for money simply leads to our inability to fund other technologies that provide greater benefits to the population as a whole.
Much of the focus on innovative products and their lack of funding, and the focus on new technologies rather than existing technologies, emanates from industry, those who support industry, and those who industry supports. We need to take a more considered approach to funding decisions relating to all technologies, not just those that are commercially sponsored.
We should ensure that funding is given to those technologies that represent value for money, including those that are not commercially sponsored. We need to encourage risk-taking in our manufacturing industry related to health care technologies. By guaranteeing funding to new technologies, we are not helping industries. Industries that become too reliant on government subsidies and preferred supplier arrangements stagnate and decline.
We need a much more transparent process in making decisions as well as transparency in agreements between manufacturers and health care payers. Such agreements at the provincial and federal level are typically confidential. Openness encourages innovation and assures fairness.
The third point I'd like to raise is the one I really want you to take home—the need for a more comprehensive approach to technology funding. The focus currently is very much on the funding of new technologies that have a commercial interest. This leads to funding decisions that do not recognize the current funding situation, such as the fact that we have limited resources available for health care, nor does it consider all the alternative technologies available for health care.
In economics we call this isolation bias: the focus on the decision of funding one technology while ignoring all the alternatives available. It causes bias because individuals have the idea that we can fund everything if we only consider one technology at a time, as opposed to taking an approach that considers all available technologies.
We need to consider all the technologies that are out there. Many of these existing technologies are under-funded, yet have the evidence to support their effectiveness and cost effectiveness. Many of these do not have commercial sponsors.
I'm going to give you a list of some of the technologies that have been shown to be both effective and cost effective:
-physiotherapy appointments to assist recovery from and the prevention of surgery can actually save us money;
-chiropractic care for lower back pain;
-exercise programs for patients with chronic illness, which have been shown to be more effective and less costly than drug therapy;
-elimination of co-payments for necessary heath care such as transportation by ambulance;
-improved housing conditions to reduce health care expenditures in the long term;
-providing well newborn visits by public health nurses;
-providing hospice respite care, so those who look after their loved ones can have some breaks and carry on providing unpaid services, which saves our health care system a very large amount of money;
-providing services to support the mentally ill living in the community, which is one of the few technologies we have shown that actually saves us money in the long term;
-providing harm reduction services such as needle exchange programs and safe injection sites.
These technologies suffer from a lack of commercial interest in promoting them. No one is conducting research to highlight their benefits, and there is no limited lobbying, because of the lack of a commercial sponsor.
To summarize, I'd like to reiterate three points. First, not all new technologies represent value for money. Second, innovation must mean representing value for money and is rewarded through patent protection. Third, decisions relating to health care funding of technologies cannot be taken in isolation and require consideration of all potential technologies, not just those for which there are commercial interests promoting them.
I thank you all for your time.