Reimbursement‐Based Economics – What Is It and How Can We Use It to Inform Drug Policy Reform?

Background In O ntario, approximately $3.8 billion is spent annually on publicly funded drug programs. The annual growth in O ntario P ublic D rug P rogram ( OPDP ) expenditure has been limited to 1.2% over the course of 3 years. Concurrently, the O ntario D rug P olicy R esearch N etwork ( ODPRN ) was appointed to conduct drug class review research relating to formulary modernization within the OPDP . Drug class reviews by ODPRN incorporate a novel methodological technique called reimbursement‐based economics, which focuses on reimbursement strategies and may be particularly relevant for policy‐makers. Objectives To describe the reimbursement‐based economics approach. Methods Reimbursement‐based economics aims to identify the optimal reimbursement strategy for drug classes by incorporating a review of economic literature, comprehensive budget impact analyses, and consideration of cost‐effectiveness. This 3‐step approach is novel in its focus on the economic impact of alternate reimbursement strategies rather than individual therapies. Results The methods involved within the reimbursement‐based approach are detailed. To facilitate the description, summary methods and findings from a recent application to formulary modernization with respect to the drug class tryptamine‐based selective serotonin receptor agonists (triptans) used to treat migraine headaches are presented. Conclusions The application of reimbursement‐based economics in drug policy reforms allows policy‐makers to consider the cost‐effectiveness and budget impact of different reimbursement strategies allowing consideration of the trade‐off between potential cost savings vs increased access to cost‐effective treatments.