The impact of HTA decisions on market access of oncology drugs in Canada
The pricing and reimbursement (P&R) landscape for pharmaceuticals is gradually changing in Canada, particularly as the provinces have banded together in recent years under the Council of the Federation Alliance. As part of the alliance they have launched various initiatives that will likely put significant pressure on pharmaceutical pricing moving forward. I discussed one such initiative last year that was focused on capping 18 of the most heavily prescribed generic drugs at 18% of the price of the branded product. For innovative drugs, the pan-Canadian Pharmaceutical Alliance (pCPA) leverages the strong negotiating power of all the provinces to secure better prices on branded drugs.
Unlike the US, Canada has official bodies such as the PMPRB, as well as HTA agencies such as the CADTH and pCODR that add layers of regulation and oversight on pricing of drugs after being granted marketing authorisation by Health Canada. The funding or formulary listing decision is usually accompanied by a negotiation on price, and increasingly, the Council of the Federation's pCPA is conducting joint negotiations on behalf of the provinces in order to secure bigger discounts and greater equity in access across Canada.
Canada spent approximately CAD28.8 billion (USD22.7 billion) on prescription drugs in 2014; however, this was distributed between private insurers (35.7%), out-of-pocket (OOP) spend (22.2%), and the public sector that represented 42.1% or CAD12.1 billion of the overall spend. Despite multiple levels of pricing and reimbursement regulations in Canada, the country remains one the highest ranked in terms of per capita spending on drugs among the Organisation for Economic Co-operation and Development (OECD) member countries. Based on the latest available international data, Canada's per capita drug expenditure was USD771, second-highest after the United States at USD1,010.
As pressure is increasingly building up on manufacturers to bring forward new treatments with notable added benefit, and cost-effective pricing, IHS decided to examine the impact pCODR decisions have on funding decisions across the provinces.
I carried out a review of all the pCODR assessments for innovative oncology drugs completed in 2013 and 2014. It seems that in the majority of cases, provinces do follow the agency's recommendations - more so for the negative recommendations than for the positive. All candidates that received a "do not fund" recommendation from pCODR failed to secure funding from any of the provinces.
However, positive decisions, particularly those conditional on an improvement in the cost-effectiveness of the study, were somewhat less influential, with some provinces still deliberating over their approval for funding years after the agency's final decision, and others issuing a "no funding" decision. A major contributor to this final hurdle is likely to be the failure to reach an agreement on the final price.
In my review Prince Edward Island was found to have the highest number of ongoing deliberations, over 70%, despite the majority of the final assessments being issued prior to January 2014 - over a year ago. Meanwhile, Newfoundland and Labrador was the province with the highest number of "no funding" decisions for treatments commonly funded in other provinces (11%). Interestingly, the pCPA joint pricing negotiations were conducted, or are ongoing, by the Council of the Federation for over half of the candidates reviewed in 2013 and 2014. This, however, did not speed up the time for provincial plan approval, and did not guarantee that all provinces would approve funding of the drug under the terms established by the alliance. Another interesting finding was that Gastrointestinal cancer treatments received the largest proportion of negative listing recommendations (75%) among the therapeutic segments, while Genitourinary therapies realised the highest amount of "recommended" approvals without further adjustments needed to achieve cost-effectiveness (75%).
Moving forward, drug manufacturers are likely to encounter additional challenges with regards to market access in Canada. As innovation and novel therapies enter the market with unique mechanisms of action and never before seen improvements in outcomes, costs of treatment with specialty drugs, specifically oncology drugs have been increasing considerably. This trend is being actively countered by the pCPA that completed 49 joint price negotiations by the end of 2014. These price reductions together with the generic price capping (examined in one of my previous blogs) have generated over CAD315 million in annual savings according to the Council of the Federation. If in the future Pharmacare were to become a reality in Canada, pricing pressure would escalate considerably and HTA assessments would likely carry significantly more weight for market access across the country.
The detailed report regarding the impact of pCODR on market access is available under the IHS World Markets Oncology Service, and additional results are being submitted for presentation at an upcoming pharmacoeconomic conference this year.
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