a patient receiving subsidized drugs under
research and development (R&D) costs.
the provincial health plan be treated with the
Countries with single-payer systems thus reap
least costly drug, even if it is a completely dif-
the benefits of new drugs without sharing the
ferent compound, as long as it is deemed to
burden of their development. As a result, many
have the same therapeutic effect. Twenty-
pharmaceutical firms based in single-payer
seven percent of physicians in British
countries have gone abroad to recoup their
Columbia report that they have had to admit
costs, and drug innovation is limited.
patients to the emergency room or hospital
One way that single-payer countries control
as a result of the mandated switching of med-
their drug spending is by delaying the intro-
icines, and 60 percent have seen patients'
duction of the newest, most expensive drugs or
conditions worsen or their symptoms accel-
by restricting access to them. In Britain, many
erate due to mandated switiching.98
drugs that are available to private pay patients
are not available to NHS patients.93 Each local
Despite the fact that countries with single-
health board decides which drugs will be cov-
payer systems go to great lengths to limit both
ered, and expensive drugs are often left off the
price and availability of prescription drugs, they
lists because of budget constraints. For exam-
don't appear to be all that successful at holding
ple, Dr. Edward Newlands, the British doctor
down drug spending. OECD data from 1992
Twenty-seven
who codeveloped the brain cancer drug
showed that when per capita spending on med-
percent of
Temodal, cannot prescribe it to his patients.
ications was adjusted for purchasing power par-
Fewer than one-third of British patients who
ity, the United States spent less than France,
physicians in
suffer a heart attack have access to beta-block-
Germany, and Japan. It spent a few dollars more
British Columbia
ers used by 75 percent of patients in the United
than Canada and substantially more than
report that they
States, despite the fact that postheart attack
Britain. During the 1990s, drug spending in the
United States inched up relative to other coun-
use of the drug reduces the risk of sudden death
have had to
from a subsequent heart attack by 20 percent.94
tries, but since much of that spending repre-
admit patients to
sents the substitution of drug therapies for
The American news media often feature
more expensive doctor and hospital services,
stories about buses of elderly Americans who
the emergency
the United States is getting a significant return
travel to Canada to buy cheaper prescription
room or hospital
on its investment in drugs.99 Research by
drugs. Less publicized, however, is the fact
as a result of the
that some Canadians travel to the United
Columbia University professor Frank Lichten-
States to buy drugs not available at any price
berg, for example, indicates that each dollar
mandated
in Canada. One of the newest drugs to treat
spent on drugs correlates with roughly a four-
switching of
dollar decline in spending on hospitals.100
noninsulin dependent diabetes--Glucophage
XR--is not available in Canada.95 Some drugs
medicines.
In short, it may be a good thing that the
are approved for use in one province, but not
United States spends more on prescription
another. Furthermore, Canada's federal
drugs than other countries. Effective pre-
Patented Medicines Price Review Board only
scription drugs can prevent or shorten
allows manufacturers to charge higher prices
expensive hospital stays and doctor visits,
for new drugs if they are judged to be "a sub-
and investment in pharmaceutical R&D
stantial improvement" over existing drugs.
yields more cutting-edge medications.
From 1994 to 1998 the board approved only
24 of the 400 drugs considered.96
Myth No. 10: Under National
A Fraser Institute study found that the
Health Insurance, Funds Are
main effect of Canadian price controls has
been to limit patients' choices, causing them
Allocated So That They Have
to rely more on hospitals and surgery.97 The
the Greatest Impact on Health
consequences of restricted access to drugs
have been particularly profound in British
The one characteristic of foreign health
Columbia. British Columbia can require that
care systems that strikes American observers
17