I'll finish quickly.
I was just making a point on appropriateness in prescribing. That is key. You've heard from others about this. That is a key element of a high-quality program where we're after value for money.
I want to make a couple of comments about formularies as they operate now. In a previous session, you heard from Brian O'Rourke, the president of CADTH, on the common drug review. That has been a great innovation in Canada. It got the provinces, the actual payers, together at a table to discuss drugs. I don't sit on that committee anymore, but I did for many years, and I can tell you that the premise used is quite good. I understand that you've committed to something on a formulary, but the problem for you folks trying to move ahead with a national process is that, although the review is excellent, it doesn't have much in the way of teeth. Occasionally, it deals with wrong information, without the actual comparators, without the actual prices that the provinces are paying. In Ontario we have routinely needed sober second thought on what this really means for the province. We have often been confronted with different results, which has led to some controversy in the media.
Before I make some general recommendations, I want to describe the typical formulary meeting. We do this regularly in clinical venues, in conference venues, just to have the audience pretend that they are part of the formulary. I have four drugs that we need to discuss.
One is a new immunotherapy for malignant melanoma. Metastatic malignant melanoma has previously been a virtual death sentence. There's now a class of drugs enabling a small number of patients to live considerably longer. We're actually talking about a cure. We have a new drug that costs $110,000 a year. The cost for quality-adjusted life, and we don't have time to get into that here, is essentially our metric for comparing one drug with other drugs that we use. The cost for QALY, quality adjusted life for a year, is $157,000. We typically have a threshold of around $50,000. Should we fund that drug? We know that it could save some lives, yet there will be a small number of patients for whom it is not cost effective.
We're also dealing with Kalydeco, or ivacaftor, which is a drug for a small genetic subset of cystic fibrosis patients. Probably 57 people in Canada could be helped by this drug, but the benefits are in a surrogate outcome, an outcome that doesn't actually describe the clinical benefit. It talks about lung function, which has only a small change, but there is some improvement in quality of life. The cost for QALY is almost $5 million, but it's children we're talking about.
Then we have a diabetes drug that affects three million people in Canada. There are many diabetes drugs. The cost is not very high, but our comparators are much cheaper, and we're talking about three million people. So the budget impact is tremendous.
Finally, we have the example of a cholesterol-lowering drug, a drug that's in the thousands of dollars per year compared with a well-known and very effective statin at $154. We are considering the potential for 11 million people with high cholesterol to eventually take this drug.
All of these have been key problems. We have our paradigm for considering the evidence, but the choices, even after you've made those important evidence considerations, are not all that clear-cut. If we were doing a strictly societal view where we have choices of physicians at the bedside, nurses at the bedside, we would probably make recommendations that are more negative.
I want to finish with what would be my wish list. I think we have to develop something nationally, based on principles of equity, efficiency, and affordability. We need essential drugs, all-people coverage of some sort, whether you call it pharmacare or something else. We have to negotiate much more aggressively on cost. We are probably entering an era in which we need funding priorities. Each clinical specialty will have to start developing its own priorities. This is happening in cancer now. We can't pay for everything. If people do not want to pay more taxes, we can't fund everything.
We need a national formulary. This is going to take a great deal of expertise beyond what we currently have. It should be transparent. We have an intelligent public and a good clinical workforce, but at present, our actual deliberations and the reasons we make our decisions are kept hidden. I think that's wrong.
In my own line of work around dealing with my colleagues every day, physicians and pharmacists, we do need much better education. We need some enforcement around the formulary decisions, and that's not there.
Thank you very much for this opportunity.