Elsevier

Health Policy

Volume 88, Issues 2–3, December 2008, Pages 308-316
Health Policy

Drug formulary decision-making in two regional health authorities in British Columbia, Canada

https://doi.org/10.1016/j.healthpol.2008.04.006Get rights and content

Abstract

Objectives

Growing pharmaceutical demands challenge healthcare organizations to set drug funding priorities (i.e. establish a formulary list). This responsibility typically rests with pharmacy and therapeutics (P&T) committees, yet how the process transpires within regional health authorities is unclear. The purpose of this study was to construct an explanatory model of drug formulary priority-setting as it occurs within regional health authorities.

Methods

A grounded theory approach was employed to study the practices of two regional health authority P&T committees in British Columbia, Canada. Data sources spanned committee documents, meeting observations (n = 4), and semi-structured interviews with committee members (n = 15). Data analysis involved coding using the constant comparative technique and writing analytic memos.

Results

Regional P&T committees engaged in two activities related to drug formulary priority-setting: developing auto-substitution policies and reviewing drug addition requests. Four processes were central to decision-making: (i) negotiating margins of therapeutic advantage; (ii) seeking value for the resources allocated; (iii) interfacing between community and institutional settings; (iv) situating decisions within an organizational context.

Conclusions

Findings highlight opportunities for institutions to improve the fairness of agenda-setting practices, and for additional collaboration between policy-makers who prioritize drugs for publicly funded formularies applicable to institutional versus community settings.

Introduction

In Canada and elsewhere, growth in total expenditures for prescribed and non-prescribed drug therapies has been observed over time. Recent figures demonstrate that annual expenditures on prescribed drugs in community settings in Canada rose from $2.6 billion in 1985 to $16.5 billion in 2003 [1]. Across Canadian hospitals, the average expenditure per inpatient day also increased by 8.3% from 2002 to 2003 ($56 to $60) [1].

A formulary is one available mechanism for attempting to contain drug expenditures. It represents a continually revised list of drugs (and sometimes also nutritional supplements and blood products) for which a particular payer reimburses its beneficiaries [2], [3], [4]. Formulary-related decisions are typically made by a multi-disciplinary pharmacy and therapeutics (P&T) committee [5], [6]. These committees can exist across various organizational levels: individual healthcare facilities, regional health authorities, public and private drug benefit plans, and health maintenance organizations.

Studies about drug formulary priority-setting have yielded information about P&T committee membership and mandate, procedures for reviewing drug addition requests, what considerations are made, and decision reporting [7], [8], [9], [10], [11], [12], [13], [14], [15]. Similar to the broader literature about priority-setting and policy-making in healthcare, scientific evidence is but one type of evidence that is used. The importance of scientific evidence for ascertaining clinical merit and cost-effectiveness has been well described. However, examination of non-scientific considerations (e.g. political pressure and resource constraints) has been less complete. This discrepancy has been attributed to a culture of scientific rationality in which decision-makers do not recognize, or indeed edit out, non-scientific considerations from interview narratives and official documents [7], [16], and suggests that observational data collection techniques should be employed when studying this issue [9], [14].

Developing a theoretical framework can be a useful research goal for integrating previously isolated incidents, and anticipating future consequences [17]. In the realm of drug formulary priority-setting, only two explanatory models – or theoretical frameworks – based upon empirical data have been reported on to date, both of which utilized observational data collection techniques. Both the PausJenssen et al. [10] and Singer et al. [11] explanatory models reflect the experiences of committees making formulary recommendations for a government-subsidized drug benefit plan in the province of Ontario which provides coverage to certain residents (seniors, social assistance recipients, or those whose drug costs constitute greater than a specified proportion of their income which is deemed acceptable) primarily for drugs utilized on an outpatient basis. Findings derived from the experiences of provincial public drug benefit programs may not, however, easily transfer to the contexts of regional health authorities which have been established in several Canadian provinces due to differences in funding jurisdiction [11].

In British Columbia, for example, the provincial Ministry of Health operates a public drug benefit program (PharmaCare) which offers several plans to residents of the province that subsidize medications dispensed primarily by community pharmacies for use in community settings. The degree of subsidization varies across PharmaCare plans, which are population-specific (e.g. recipients of income assistance, residents whose net income falls below a specified threshold but do not receive income assistance, severely handicapped children living in the community, patients wishing to receive palliative care at home). Resources are also allocated from the Ministry of Health to five regional health authorities, a portion of which is then designated for each regional drug budget. The regional drug budget funds those drugs that are prescribed, dispensed and administered to patients during their stay within regional medical institutions (e.g. hospital and mental health facilities) irrespective of whether a resident lived within that region of the province. Therefore, issues related to maintaining a drug inventory (e.g. purchasing and monitoring stock) and medication administration (e.g. dosing convenience for healthcare staff) may be unique to a regional health authority context. At the time of study, separate formularies and P&T committees existed for Pharmacare and the regional health authorities.

The purpose of this study was to develop an explanatory model of the processes used by regional health authority P&T committees to set priorities for regional drug formularies, in order to advance understanding of both scientific and non-scientific considerations.

Section snippets

Materials and methods

A qualitative, grounded theory study was conducted. Regional P&T committees in two regional health authorities in British Columbia were selected on the basis of researcher accessibility for observing committee meetings: Fraser Health Authority (FHA) and Interior Health Authority (IHA).

A purposive sampling procedure [18] was used to identify characteristics of committee members that would be desirable to capture when conducting semi-structured interviews (e.g. a variety of professions).

Results

Although the FHA and IHA regional P&T committees differed in size (26 versus 15, respectively), their membership compositions were similar. Physicians were the most numerous member group yet pharmacists, nurses, health authority administrators and nutritionists were also represented. Although pharmacy departments acted as Secretariats for both committees, physicians served as Chairs. Several members were reported to have graduate-level training in epidemiology and/or health economics.

The

Discussion

The four processes described above allowed regional P&T committees to decide whether, as well as how, drugs should be added to the regional formulary (with or without restriction; replacing another agent). Committee members drew upon a wide range of information such as scientific literature, clinical anecdotes, regional trends in hospital admission and drug utilization, budget data, formularies in other jurisdictions, previous decisions, contracts with pharmaceutical companies, and stakeholder

Conclusions

The primary contribution made by the present study constitutes an explanatory model which outlines how regional P&T committees negotiate issues of therapeutic advantage, value, the blurred border between community and institutional settings, and organizational context. The process of setting drug priorities for a regional formulary is both dynamic and complex: “There are a lot of balls in the air. You have personalities. You’ve got big agendas (…) You have studies. You have talks. You have

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