It was May 1, 2003, when the government of British Columbia announced that it was “providing a new PharmaCare coverage arrangement for patients with gastric ulcers and acid reflux disease that will ensure continued access to high-quality medication while protecting $42 million in PharmaCare resources over three years. The new arrangement, which takes effect July 15,

[2003] affects the use of proton pump inhibitors.1

Sadly, the government predictions were far off the mark. In fact, after a thorough examination of the province’s own linked databases, we note that this ‘new arrangement’ actually cost our healthcare system and patients more than $43.5 million. We’ve just had a study published in the peer-reviewed journal, Alimentary Pharmacology & Therapeutics, called Increased health costs from mandated Therapeutic Substitution of proton pump inhibitors in British Columbia, co-authored by Brett Skinner of the Fraser Institute, Dr. James Gray, gastroenterologist, chair of the Canadian Society of Intestinal Research (CSIR) Medical Advisory Council, and Vice-President of the CSIR Board of Directors, and Gail Attara, CSIR’s executive director.2


The ‘New Arrangement’ – 2003

We’ve reported on this ‘new arrangement’ before in the pages of The Inside Tract®; it’s called Therapeutic Substitution. It is a PharmaCare policy requiring British Columbians who were already approved for proton pump inhibitor (PPI) medication, to switch the cheapest brand name PPI medication or risk loss of pulic insurance coverage of their PPI medication. This policy was unprecedented in Canada at that time.

By the end of May 2003, more than three-quarters of the gastroenterologists in BC, met with the executive director of the Canadian Society of Intestinal Research, expressing potential health concerns that could arise from the enforcement of this policy. Following this meeting, CSIR’s executive director, a physician representing the BC Medical Association, and two gastroenterologists from the BC Society of Gastroenterology presented their concerns to BC’s Minister of Health Services, the Assistant Deputy Minister, and the executive director of PharmaCare, strongly recommending that the Ministry and PharmaCare halt this change in policy. The government decided to proceed as announced, ignoring our concerns.

When the policy came into effect in July 2003 all patients taking a PPI to treat acid related diseases, such as severe GERD, had to stop taking the medication that was working for them, and start taking the cheapest brand name drug. BC made this change to the reimbursement policy without any evidence to support the benefits of such a mass switching of patients from one drug to another, and without having conducted a pilot project to see if there might be a risk to patient health.

The BC PharmaCare program administrators assumed that all of the medications in the PPI class were interchangeable despite the fact that they are all brand name products with unique chemical profiles, not generic versions. BC did not substitute one product for its generic ‘equivalent,’ but it substituted one brand name product for another, totally different chemical.


A First Look at the Consequences – 20053

During 2003–2004, many of the individuals affected by this policy contacted CSIR complaining of destabilization of their acid-related diseases resulting from forced medication switching. Some reported a return of symptoms, such as severe heartburn, and some reported side effects including diarrhea, vomiting, nausea, chest pain, fatigue and, less commonly, vomiting blood. A number of these complaints required increased access to healthcare, leading us to suspect a change in health-related expenditures because of this policy.

With increasing queries as to the impact of the Therapeutic Substitution of PPIs in BC, CSIR undertook an initial examination of the impact of the policy from the patients’ perspective. The findings suggested that Therapeutic Substitution of PPIs in BC has resulted in a significant impact among patients.

Physical – Most symptoms patients experienced after switching were associated with the gastrointestinal system, with the most common physical effect being a return of GERD symptoms. Physical symptoms ranged in intensity from mild to severe.

Emotional – In large part, patients characterized the emotional impact of the Therapeutic Substitution policy in terms of an overarching sense of concern and fear about their health, disappointment, and anger directed at the Government/PharmaCare or implementation of this policy, overall anger and resentment, and feelings of depression.

Financial – Some patients experienced an increased financial impact when their medication was no longer covered by PharmaCare and secondary costs due to increased use of antacids and wasted/unused prescriptions.

Health Service Utilization – The impact of switching from the original PPI to the policy-substituted medication extended beyond the personal/patient realm to the healthcare system. Some patients were required to seek out healthcare services that they would not have otherwise required. These included increased general practitioner, specialist, and emergency room visits; as well as increased diagnostic testing, hospital stays, and pharmacist consultations.

CSIR thanks the more than 280 British Columbians who gave so generously of their time to share their experience and contribute to this work.


Published, Peer-Reviewed Study – 2009

CSIR and Dr. James Gray applied in 2005 to the BC Government for access to its linked databases of individual-level patient records for the entire population of the province in three separate databases: hospitals (Hospital Separations), physicians’ services (Medical Services Plan) and prescription drugs (PharmaNet). The hospital and physicians’ databases reflect patient utilization, which is almost entirely publicly funded. The PharmaNet database includes all prescription drug sales in the province, whether publicly or privately paid. Patient records link across these databases, because each patient is assigned an anonymous, unique numerical identifier that is the same for each database.

CSIR’s specific request included individual level data on the utilization of hospitals, physician services, and PPI prescriptions, for all patients who filled a prescription for a PPI during the years studied. When we received the massive data files, in August 2007, we engaged the help of Brett Skinner, for which we are extremely grateful. We completed this study without pharmaceutical industry funding, as required under our contract with the provincial government. All authors volunteered their time to this study.


Study Conclusions

(the following is an excerpt from Alimentary Pharmacology and Therapeutics2)

Our study finds that the 2003 implementation of Therapeutic Substitution policy for proton pump inhibitors in BC probably generated significant direct, avoidable, net healthcare costs over the period 2003 to 2005, potentially totalling up to $43.51 million. After controlling for individual case variation in age, gender, and a proxy for pre-existing health status, regression analysis revealed statistically significant greater overall use of PPIs, physician services, and hospital services independently associated with patients who complied with Therapeutic Substitution. Over the three-year period 2003–2005, this represented net healthcare expenditures totalling approximately C$43.51 million (C$9.11 million in total PPI drug expenditures, C$24.65 million for physician services, and C$9.75 million for hospital services).

Our empirical findings appear to undermine one of the basic rationales for Therapeutic Substitution, which is cost savings. In order for Therapeutic Substitution to be justified, any public savings from the policy must significantly outweigh the public and private additional costs of increased use of medical goods and services that could arise when physicians’ prescribing advice is ignored and patients’ choice is diminished.

It is not enough for the savings from substitution merely to offset increases in other healthcare costs. It is even worse if substitution policy results in additional net healthcare costs, as our study suggests actually occurred in BC among persons taking PPIs. The evidence presented in this study suggests (with cautions noted in the full study) that Therapeutic Substitution policy for proton pump inhibitors in BC was statistically associated with significantly greater individual use of healthcare by the patients affected by the policy, that the effect was likely independent of confounding variables, and that the effect was large enough to create net costs at the aggregate level.

This study also did not estimate broader socio-economic costs such as productivity or efficiency losses, or effects on other family members that could be associated with the additional healthcare utilization for our patient cohort. We did not examine distortions in the delivery of physician services, such as any potential extra staffing costs required to handle an increased number of Special Authority requests to BC PharmaCare, or PharmaCare’s extra costs in processing these requests. We also did not examine crowding-out effects on other patients from the increased utilization of healthcare resources among PPI switchers.



If a patient, whose condition is stabilized on a prescribed medication regime, is forced to switch to a different medication, for no reason other than that their drug plan mandates the switch, then more frequent physician visits, diagnostic testing, hospital services, and drug costs result, increasing overall healthcare costs.

Now that this body of evidence is in the public domain, we have asked the BC government to halt all Therapeutic Substitution and are waiting for a reply.

Skinner BJ, Gray JR, Attara GP. Increased health costs from mandated Therapeutic Substitution of proton pump inhibitors in British Columbia. Alimentary Pharmacology and Therapeutics. 2009;29(8):882–891.
CSIR Original Research
First published in the Inside Tract® newsletter issue 170 – 2009
1. British Columbia Ministry of Health Services: Media Release. Patients, PharmaCare to Save Millions of Dollars, 2003HSER0022-000419, May 1, 2003.
2. Skinner BJ, Gray JR, Attara GP. Increased health costs from mandated Therapeutic Substitution of proton pump inhibitors in British Columbia. Alimentary Pharmacology and Therapeutics. 2009;29(8):882–891.
3. Therapeutic Substitution of Proton Pump Inhibitors in British Columbia: Findings From a Review of the Patient Experience. Canadian Society of Intestinal Research. April 2005