Pharmaceutical Policy Issues in Canada Nigel S B Rawson, PhD - - PowerPoint PPT Presentation

Pharmaceutical Policy Issues in Canada

Nigel S B Rawson, PhD President, Eastlake Research Group, Oakville, ON Senior Fellow, Fraser Institute, Vancouver, BC Affiliated Scholar, Canadian Health Policy Institute, Toronto, ON

Canada: More than “Two Solitudes”

Pharmaceutical Policy Issues

• Federal regulatory approval
• Health technology assessment processes
• Price controls and negotiations
• Drug plan reimbursement
• Proposed system changes

New drug Fit for humans Health Canada Canadian Agency for Drugs and Technologies in Health (CADTH) Pan-Canadian Pharmaceutical Alliance (pCPA) Public drug plans Institut national d'excellence en santé et en services sociaux (INESSS) Patented Medicine Prices Review Board (PMPRB) Starts once a new patented drug has been sold (~12 months) 10 years 6-12 months; can

• verlap with Health

Canada for ≤6 months Priority: ~8 months Standard: ~12 months 6-36 months

Regulatory and Public Reimbursement Processes

Federal Drug Regulatory Approval

Federal Regulatory Approval

• Traditionally slow compared with United

States and Europe

• Smaller human and financial resources
• For last decade, median review and approval

time consistent with United States and Europe

Median Regulatory Review Times in Canada

200 400 600 800 1000 1200 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Days Canada

Median Regulatory Review Times in Canada and the US

200 400 600 800 1000 1200 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Days Canada United States

Median Regulatory Review Times in Canada, the US and Europe

200 400 600 800 1000 1200 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Days Canada United States European Union

Ranking of Submissions in Canada Relative to United States and Europe, 2002-2016

10 20 30 40 50 60 70 80 Submission to Canada % Canada first Canada second Canada third Median delay after first submission: 166 days

Ranking of Submissions and Approvals in Canada Relative to United States and Europe, 2002-2016

10 20 30 40 50 60 70 80 Submission to Canada Approval in Canada % Canada first Canada second Canada third Median delay after first approval: 367 days Median delay after first submission: 166 days

Health Technology Assessment

Health Technology Assessment (HTA) Processes

• Canadian Agency for Drugs and Technologies in

Health (CADTH)

 Performs HTA for all federal, provincial and territorial governments, except Quebec  One process for cancer drugs, another for all other drugs  Reimbursement recommendations issued to government drug plans as to whether a drug should be publicly funded

• Institut national d'excellence en santé et en services

sociaux (INESSS)

 Quebec’s HTA agency  Makes reimbursement recommendations to Minister of Health and Social Services

CADTH Positive Reimbursement Recommendation Rate

Canada: cancer drugs Canada: other drugs UK: all drugs 80% 50-55% 76% Year of recommendation Drugs for rare disorders (≤10 per 100,000) Drugs for ultra-rare disorders (≤1 per 100,000) 2004 – 2015 56.5% 23.1% 2016 – 2/2018 87.5% 100.0%

Drug Pricing Controls and Negotiation

Pricing Controls: Patented Medicine Prices Review Board

• Work starts once a new patented drug has been sold
• Timing of start of PMPRB’s actions is variable
• PMPRB compares price that a company is charging in

Canada with prices in 7 comparator countries

• Ceiling price set based on product’s uniqueness and

PMPRB’s assessment of its therapeutic benefit

France Germany Italy Sweden Switzerland UK USA

Pan-Canadian Pharmaceutical Alliance

• Federal, provincial and territorial governments’
• rganization to negotiate prices of new and existing drugs

with pharmaceutical manufacturers

• pCPA’s objectives:

 Increase access to clinically effective and cost-effective drug treatment options  Achieve consistent and lower drug costs for participating jurisdictions  Reduce duplication of effort and improve use of resources  Improve consistency of coverage criteria among participating jurisdictions

• Process takes about 6 months but can take up to 3 years

Relationship between CADTH Recommendation and pCPA Negotiation, 2014-2018

Recommendation Negotiation with agreement Negotiation without agreement No negotiation Reimburse without conditions 100.0% 0.0% 0.0% Reimburse with conditions 79.8% 20.2% 0.0% Reimburse with conditions, including major price reduction 87.6% 9.7% 2.7% Do not reimburse 23.4% 4.7% 71.9%

Drug Reimbursement

Government Drug Plans

• Mainly for seniors, social assistance recipients and some

special groups, e.g. cancer patients, or when costs are catastrophic

• Offer some coverage to about 25% of Canadians
• Decision to reimburse based on jurisdiction’s priorities

and budget, together with HTA and pCPA results

• Complex systems of deductibles, copayments and

premiums and, for many drugs, special or restricted access criteria

• Variation in patient eligibility, out-of-pocket expenses and

which drugs are covered

• Significant inequalities between and within provinces
• Much dissatisfaction with government plans

Private Insurance Plans

• About two-thirds of Canadians have private drug insurance
• Broader coverage than public plans and time taken to

insure drugs usually shorter

• Private plans pay attention to CADTH HTA (not pCPA)
• Of 464 new drugs approved by Health Canada, 2004-2013

 89% insured by ≥1 private plan by January 31, 2015  50% covered by ≥1 public plan by January 31, 2015

• Comparing drugs covered by ≥1 public drug plan and ≥1

private plan, average number of days to insure new drugs

 132 days for private drug plans  468 days for public drug plans

Proposed Changes

Proposed PMPRB Revisions: Stage 1

France Germany Italy Sweden Switzerland UK USA

Modify comparator countries in international comparison to tilt balance towards countries with lower drug prices Remove Switzerland and USA and add

Australia Belgium Japan Netherlands Norway South Korea Spain

Likely to lead to a 20% reduction in ceiling price

Category 1

• First-in-class or substantial

improvement over existing therapy

• Incremental cost-

effectiveness ratio (ICER) >$30,000 per QALY threshold for clinically significant indications

• Expected annual market

sales in Canada >$20 million per year

• Average annual treatment

cost above per capita GDP Category 2

• All others

Pharmacoeconomic analysis: Must have ICER <$60,000/QALY; in some circumstances, threshold will be $90,000 to $150,000/QALY Market size and GDP tests:

• If estimated annual sales >$20

million in any of first 5 years of sales, further price adjustment of 10% reduction for each additional $10 million in revenue up to 50%

• If annual cost >per capita GDP,

another price reduction required

Potential for price reduction

• f 80%+

Proposed PMPRB Revisions: Stage 2

National Pharmacare

• Proposals for reforming drug insurance system have

been put forward over 40+ years

• Canadians almost always highly supportive when

asked about national pharmacare

• Aim of some politicians, government officials and

academics is a totally public system

• Others propose a “filling-the-gaps” approach

2019 Federal Budget on National Pharmacare

“Moving forward on implementing national pharmacare” with three “foundational elements”

• National Canadian Drug Agency – will combine HTA agencies

and pCPA, but no mention of PMPRB

• Development of comprehensive, evidence-based national drug

formulary – will this would be a small list of so-called “essential” medications, a limited formulary like New Zealand’s, or something much broader?

• National strategy for high-cost medicines for rare disorders – long
• verdue but what will it look like?

Conclusions

• Canadian prescription drug insurance processes face

several challenges over next few years

• High prices are threatening sustainability of both public

and private insurance systems

• Proposed changes have potential to decrease Canada’s

attractiveness for pharmaceutical manufacturers

• Potential for delays in and denial of patient access to

new innovative medicines that can provide life- changing outcomes