In recent years, many countries with publicly funded healthcare have started using cost-effectiveness analysis (CEA) along with review of clinical data as a tool to assess the overall benefit of a new drug to the society and set priorities with regards to health care budget. Cost effectiveness was formally incorporated into the Ontario drug review system in 1993 and the Canadian drug-review system in 2003. The issue of using cost effectiveness has become increasingly contentious in recent years: some newly approved cancer drugs cost $3,000 to $6,000 or more for one treatment cycle, but their high prices means that they were often classified as being not cost effective. This note reviews many of the competing interests in debates over drug funding and dilemmas about healthcare financing decisions in the presence of limited budgets.
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