Patients in Canada often have to “fail” on an old drug before they can access a newer, potentially more effective treatment. This practice, known as step therapy or fail-first policies, forces people living with chronic conditions like ulcerative colitis or epilepsy to endure ineffective medications or side effects before provincial health plans will cover a higher-cost option.
One Patient’s Battle With the System
The cost of waiting is significant. Josh Berman, the president and CEO of Crohn’s and Colitis Canada, knows the system firsthand. Diagnosed with ulcerative colitis in 2021, he was in severe pain and making up to 25 trips to the bathroom daily. The medication that finally helped him had been available since his diagnosis, but he could not access it until he showed that previous treatments had failed. “I had to play the part of a lab rat with less effective, less expensive medications,” Berman said.
Will Florence, a stagehand, faces a different barrier. Epilepsy has kept him from working, and he needs a vagus nerve stimulator implant to control his seizures. He cannot get the surgery until he proves his current medication is not working.
The cost of these treatments varies widely. Older, non-biologic drugs like 5-ASA, developed in the 1930s, typically cost up to roughly $4,000 per year. Newer biologics, which target the root of inflammatory diseases, can range from $13,697 to $29,855 annually. For some conditions, such as neuromyelitis optica spectrum disorder, costs can exceed $500,000 per person per year.
Dr. Dalia Rotstein, a neurologist at St. Michael’s Hospital in Toronto, notes that these diseases often strike young adults just starting their careers and families. Delaying access to effective treatments can be devastating. “We want to provide compassionate care on a daily basis,” she said. “To be saddled with a chronic disease and diagnosis, it can be devastating.”
Defending the Cost-Saving Policies
However, proponents of step therapy argue that the policies are about fiscal responsibility. Graham Statt, a former assistant deputy minister for Pharmaceutical and Supplementary Benefits in Alberta, said governments are trying to make rational decisions that include cost effectiveness and the broader sustainability of the health-care system. “Government payers aren’t cheap or mean, but they’re trying to make really rational decisions,” Statt said.
Yet evidence suggests that delaying these drugs may ultimately cost more. Dr. Laura Targownik, a division director for Gastroenterology and Hepatology at the University of Toronto, participated in research on access to a biologic for Crohn’s disease. The study found that patients who had earlier access to the newer, more expensive drug had lower rates of hospitalizations and surgery, by about half, when compared to people who experienced delayed care. This led to lower long-term costs for each patient.
Provincial health programs adopted these policies in the early 2000s. Private insurers followed in the mid-2010s. The rules state that if a cheaper, similar drug exists, a patient must try it first. In Manitoba, clinical markers track failed attempts on inadequately controlled disease. Ontario uses codes that require physicians to submit data on failed attempts. Atlantic provinces share resources from the Atlantic Common Formulary. Each region essentially enforces the same rule: take the lower-cost option before the higher-cost one.
Pushing for Faster Access to Treatments
Governments say these rules ensure access to safe treatments while saving public money. Jaye Lang, a press secretary for Alberta’s Primary and Preventative Health Services, stated the programs are designed to support responsible use of health-care dollars. B.C. Health officials echoed this view, noting their drug review process is evidence-based and considers cost-effectiveness. Pharmaceutical companies also want the rules loosened. Regulatory approval from Health Canada is slow, and step therapy adds even more time to getting drugs to patients. They can market new medications elsewhere where payers value innovation more.
Bettina Hamelin, president of Innovative Medicines Canada, noted that Canada holds about two per cent of the global pharmaceutical market. She said the decision is to go to jurisdictions that value and pay for innovation. The pharmaceutical industry points out that newer drugs often work better than older ones. Modern biologics target inflammation at its source, unlike older drugs that suppress the immune system entirely. This can lead to severe side effects. Some of the newer drugs are so expensive they can cost upwards of $40,000 to $50,000 per year for conditions like multiple sclerosis.
When care is delayed, disease progression worsens. This leads to higher costs through more intensive treatments, lost employment, and disability needs. Dr. Laura Targownik’s research supports this view. Her study found that patients who accessed the newer drug within two years had half the rate of hospitalizations and surgery compared to those who waited. Despite this evidence, some experts believe that older drugs work just as well as new ones. Dr. Mina Tadrous cautioned that society often assumes new equals superior, but that is not always true.
The Market Shifts Toward Innovation-Friendly Jurisdictions
Pharmaceutical companies are pushing to loosen these restrictions. They argue that step therapy makes it harder to get new treatments to patients. Regulatory approval from Health Canada is already slow, and step therapy adds more delays. She said companies are increasingly choosing other jurisdictions that value innovation and provide faster access.
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