Canada's New Drug Pricing Rules: What are the Implications for Cancer Patients?
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Don’t miss our upcoming webinars: Subscribe today! In this webinar: Join our presenters, Wayne Critchley from Global Public Affairs and Ryan Clarke from Advocacy Solutions, and CCSN to learn more about changes to the Patented Medicine Prices Review Board (PMPRB) and receive guidance about how to support the cancer community’s engagement at this stage of regulatory reform. View the video: https://youtu.be/4IsiptCD0Tw To learn more about CCSN, visit us at survivornet.ca Follow CCSN on social media: Twitter - https://twitter.com/survivornetca Facebook - https://www.facebook.com/CanadianSurvivorNet Instagram: https://www.instagram.com/survivornet_ca/ Pinterest - https://www.pinterest.com/survivornetwork
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Canada's New Drug Pricing Rules: What are the Implications for Cancer Patients?
- 1. Proposed PMPRB Guidelines: Implications for Oncology Thursday, July 16, 2020 13:00-14:00 Presented by Wayne Critchley, Senior Associate, Global Public Affairs
- 2. Proposed PMPRB Guidelines: Implications for Oncology Wayne Critchley wcritchley@globalpublic.com
- 3. Overview • Setting the Stage • PMPRB 101 • The New Regulations and Guidelines • Impact on New Oncology Medicines • What’s Next
- 4. The Drivers of PMPRB Reform • Political – part of Liberal Party platform in 2015 – Linked to pharmacare? • Bureaucratic – PMPRB sought changes • High cost of new breakthrough medicines – Pressures on public and private payers 4
- 5. Why the Controversy? • Lack of consensus on: –Nature and magnitude of problem –Whether PMPRB is the appropriate vehicle –Mechanisms proposed by PMPRB –Adequacy of consultations –Anticipated impact 5
- 6. Will PMPRB Reform … Improve access by improving affordability? Reduce access by creating barriers to bring new drugs to Canada?
- 7. Cost vs. Price Public drug plan spending grew 6.6% annually from 2015-18 due to: • Increased utilization • Use of new higher cost drugs • Demographics • Impact of OHIP+ BUT: Prices of individual drugs actually declined over this period. (PMPRB, NPDUIS) Drugs account for smaller share of health spending than 10 years ago. (CIHI)
- 8. Drug Price Trends: On one hand … 8 Canadian prices have consistently been in mid-range of PMPRB7
- 9. But on the other hand … Canadian prices 4th highest among OECD35
- 10. Innovative Oncology Drugs Contribute to Growing Drug Costs Increased from 5% to 21% of Drug Sales in Past Decade
- 11. PMPRB 101 • Established by 1987 Patent Act - federal pharma patent policy – Prior to CADTH, CDR, pCODR, pCPA • Independent regulator, not a payer! – Makes no recommendations on funding and coverage decisions – Mandate: to ensure prices not excessive • Quasi-judicial tribunal – $$ legal proceedings – Can only order price reduction after public hearing – typically three years or longer • Has fulfilled mandate and helped keep Canadian prices in line with Europe and much below US 11
- 12. Current Guidelines • Based on therapeutic comparisons – Most new drugs limited to most costly drug that treats the same disease • International price comparisons – Breakthrough drugs limited to median of PMPRB7 • Over time: – Price increases limited to increases in CPI – Canadian price can never exceed highest foreign price • Principle: Canadian prices, on average, should not exceed median of PMPRB7 12
- 13. PMPRB has Achieved its Objectives • Prices declined 0.4% in 2018 – Have never increased more than CPI in 25 years • Canadian prices 20% below median foreign prices • ~110 voluntary compliance undertakings to date • In 2018-9, collected $2.5 million in excess revenues Average Ratio of Median International Price to Canadian Price, 2001 to 2017 Source: PMPRB
- 14. But, Critics Argue: • High cost of innovative new drugs puts pressure on drug budgets • Canadian prices overall are higher than most OECD countries, such as Australia and New Zealand • The US is not an appropriate comparator country • Patentees have not lived up to their 10% R&D commitment – (although this is arguable and not related to pricing) • OECD reports Canada has the fourth highest drug expenditures per capita in 2017
- 15. Major Changes in Environment Since 1987 • Cost containment by public drug plans: – price freezes, mandatory generic substitution, reference-based pricing policies, listing agreements, risk-sharing • CADTH, INESSS – CDR and pCODR – Rigorous clinical and cost-effectiveness reviews – Inform reimbursement decisions • pCPA – joint negotiation on PLAs and generic price reductions – Savings of ~30% - over $2 Billion annually – Do not list ~30% of new drugs if insufficient benefit • As a result, many had questioned the continued relevance of the PMPRB 2017 – Federal government announces PMPRB Reform
- 16. New PMPRB Regulations Basket of Comparator Countries • Remove higher- priced US and Switzerland • Add 7 lower priced countries New Economic Pricing Factors • Pharmacoeconomics • Size of market • Gross Domestic Product 3rd Party Rebates • Report prices net of third party rebates • i.e., PLAs 16 • Announced 2017; approved 2019 • Come into force January 1, 2021 • No changes to Patent Act or to “excessive” price standard
- 17. New Basket of Countries • PMPRB 7 becomes PMPRB 11 – Remove high-priced countries; Add lower- priced countries – PMPRB11 aligns with OECD median – Expected to lower prices for all patented drugs by ~ 20% PMPRB 7 PMPRB 11 France France Germany Germany Italy Italy Sweden Sweden UK UK Switzerland Australia US Belgium Japan Netherlands Norway Spain 17
- 18. Proposed Guidelines • Complete reformulation • Instead of reviewing average net price (net of discounts), will review – List Price – for most existing and new drugs – Rebated Price for high cost drugs • Mechanics have evolved from CG1 – November 2019 draft – current June 2020 draft 18
- 20. Price Limits • All existing and new patented drugs: – Maximum List Price (MLP) – Based on median international price, PMPRB 11 • Category 1 (high cost) new drugs: – MLP, plus – Maximum Rebated Price (MRP) – based on calculations using new economic factors
- 21. What is Category I? • Annual treatment cost ~ $90K, OR • Annual Revenues $50 million – Based on estimated market size • Expected to capture ~25% of all new medicines – Assume most targeted therapies and high cost drugs will be included – Thresholds have been increased from much lower thresholds initially proposed
- 22. Maximum Rebated Price • Calculated by PMPRB staff using complex formulas: – “pharmacoeconomic price” calculated from CDR and pCODR recommendations – MRP to fall in range of 20% to 50% reduction from MLP • Can be reduced further based on market size (sales over $50 million) – Additional reduction in MRP up to 35%
- 23. Impacts of reform • Lower prices – but by how much? – By 20% to OECD median? Plus substantial rebates? • Control drug expenditures – Limit to share of GDP? • Greater price uncertainty; delays in setting price limit • Access to new drugs? – IMC cites evidence new rules will lower availability of new drugs – PMPRB disputes that impact • Access to clinical trials? 23
- 24. Concerns with Proposed Guidelines • Complexity • Uncertainty – prior to launch and ongoing • Discretion to Board Staff – Risk increased number of hearings • Increased litigation • Focus on controlling revenues of manufacturer Will these concerns discourage manufacturers from launching new treatments? Clinical trials?
- 25. Impact on Oncology LSO Survey of Pharma Execs found 53% thought biggest impact of PMPRB reform will be in oncology (Feb, 2020)
- 26. Delayed Launches? Increase in delayed launches of new drugs since PMPRB Regs approved. (IMC, 2020)
- 27. Court Challenges • IMC v. Attorney-General – Federal Court of Canada – Are the new Regulations within the government’s authority? – June 2020 – trial decision struck down regulation for reporting rebates – May be appealed • Merck Canada et al v. Attorney-General – Quebec Superior Court – Is the amended PMPRB regime constitutional? – September 2020 - Hearing
- 28. Response to FCC Decision • PMPRB intends to proceed with proposed Guidelines • Question: How can it apply the Maximum Rebated Price threshold if PLA rebates not part of the equation?
- 29. What’s Next • Submissions to PMPRB due August 4, 2020 – PMPRB plans to finalize guidelines Fall 2020 – Intends to implement new regime January 2021 • Court challenges continue
- 30. Public Engagement • There are two formal input opportunities currently underway • Call for public input directly to PMPRB – closes August 4th – https://www.canada.ca/en/patented-medicine-prices- review/services/consultations/draft-guidelines.html • Call by the Conservative Party of Canada (Matt Jeneroux, MP) for public feedback – closes September 4th – https://mattjeneroux.ca/pmprb-feedback/
- 31. CCSN Engagement • CCSN will be providing input into both of these public consultation processes and posting a copy of their comments on the CCSN website – https://survivornet.ca • But because PMPRB was created under the Patent Act, which is federal legislation, proposed changes to their regulations and guidelines are under the purview of the federal government • Therefore, CCSN is also encouraging people to forward their input (including the comments of CCSN) directly their Members of Parliament (MPs) – https://www.ourcommons.ca/members/en
- 32. Canadian Cancer Survivor Network Contact Info 1750 Courtwood Crescent, Suite 210 Ottawa, ON K2C 2B5 Telephone / Téléphone : 613-898-1871 E-mail: jmanthorne@survivornet.ca or info@survivornet.ca Website: www.survivornet.ca Twitter: @survivornetca Facebook: www.facebook.com/CanadianSurvivorNet Instagram: @survivornet_ca Pinterest: http://pinterest.com/survivornetwork/