Research Project

Coverage Policy: International Best Practice

Drug coverage policy involves important resource allocation decisions—in essence, determining where the funds to pay for medicines come from, and how those funds are used. Designing coverage policy becomes an act of balancing evidence, ethics and economics.

This CHSPR project will identify international practices in drug coverage policy, determine which practices are best, and translate those findings for the Canadian context. It will focus on formulary-based coverage policies, including listing decisions, reference based pricing, tiered co-payments and special authority listings.

CHSPR will collect consistent information about international policies and the institutional context in which they are made. The research team will also conduct a systematic review of what the research literature indicates about the effects of different formulary-based coverage policies: how do policies impact access to medicines, health outcomes, trends in drug costs, and the distribution of financial burdens.

In evaluating international policies as well as research studies conducted in disparate settings, CHSPR researchers will focus on contextual data that will help the team to identify best practices and facilitating factors that would enable favourable policy outcomes in Canada.This new CIHR-funded project will build on earlier work that CHSPR has conducted with funding from the Commonwealth Fund, New York.

The Centre’s initial Commonwealth Fund study in this area described Canada's experience with public drug benefit programs for seniors, finding that comprehensive coverage for seniors is eroding under the pressure of uncontrolled prescription drug costs. The authors conclude that sustainable pharmaceutical benefit programs—whether in Canada or abroad—require effective pricing and utilization management, and strong political leadership.

The second Commonwealth Fund study explored the evolution of outcomes-based drug coverage by BC PharmaCare. The report explains that coverage policies under BC PharmaCare restrict public subsidy until manufacturers provide valid evidence of a comparative health outcome advantage versus therapeutic alternatives. Implementing and maintaining such outcomes-based coverage policies has required a system of evidentiary review and support.

The third Commonwealth Fund study looked at centralized assessment processes for evidence-based pharmaceutical policy making in Australia, Canada, New Zealand and the United Kingdom. Through comparative analysis and qualitative interviews, this study found that centralizing the assessment of pharmaceuticals can raise evidentiary standards and reduce duplication of efforts, but establishing transparency will be increasingly important as centralized assessments become more influential.


  • Canadian Institutes of Health Research
  • The Commonwealth Fund