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

Regulatory and Public Reimbursement Processes Canadian Agency for Drugs and Technologies in Health (CADTH) Pan-Canadian Public New Health Fit for drug Pharmaceutical drug Canada humans Alliance (pCPA) plans Institut national d'excellence en santé et en services sociaux (INESSS) Priority: ~8 months 6-12 months; can 6-36 months Standard: 10 years overlap with Health Canada for ≤6 months ~12 months Patented Medicine Prices Review Board (PMPRB) Starts once a new patented drug has been sold (~12 months)

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 1200 Days 1000 800 600 400 200 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Canada

Median Regulatory Review Times in Canada and the US 1200 Days 1000 800 600 400 200 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Canada United States

Median Regulatory Review Times in Canada, the US and Europe 1200 Days 1000 800 600 400 200 0 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Canada United States European Union

Ranking of Submissions in Canada Relative to United States and Europe, 2002-2016 80 % 70 Median delay after first 60 submission: 166 days 50 40 30 20 10 0 Submission to Canada Canada first Canada second Canada third

Ranking of Submissions and Approvals in Canada Relative to United States and Europe, 2002-2016 80 % 70 Median delay Median delay after first after first 60 submission: approval: 166 days 50 367 days 40 30 20 10 0 Submission to Canada Approval in Canada Canada first Canada second Canada third

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 Drugs for rare Drugs for ultra-rare recommendation disorders disorders (≤10 per 100,000) (≤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 Germany Sweden France Italy Switzerland UK USA  Ceiling price set based on product’s uniqueness and PMPRB’s assessment of its therapeutic benefit

Pan-Canadian Pharmaceutical Alliance  Federal, provincial and territorial governments’ organization 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 Negotiation Negotiation No with without negotiation agreement agreement Recommendation Reimburse without conditions 100.0% 0.0% 0.0% Reimburse with conditions 79.8% 20.2% 0.0% Reimburse with conditions, 87.6% 9.7% 2.7% including major price reduction 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 Modify comparator countries in international comparison to tilt balance towards countries with lower drug prices Germany Sweden France Italy Switzerland UK USA Remove Switzerland and USA and add Australia Belgium Japan Netherlands Norway South Korea Spain Likely to lead to a 20% reduction in ceiling price

Proposed PMPRB Revisions: Stage 2 Pharmacoeconomic analysis: Category 1 Must have ICER <$60,000/QALY;  First-in-class or substantial in some circumstances, threshold improvement over existing will be $90,000 to $150,000/QALY therapy  Incremental cost- effectiveness ratio (ICER) >$30,000 per QALY Market size and GDP tests:  If estimated annual sales >$20 threshold for clinically Potential million in any of first 5 years of significant indications for price  Expected annual market sales, further price adjustment of reduction 10% reduction for each additional sales in Canada >$20 $10 million in revenue up to 50% million per year of 80%+  Average annual treatment  If annual cost >per capita GDP, cost above per capita GDP another price reduction required Category 2  All others

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 overdue 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