s Canada heads into a federal election in October 2019, the first half of 2019 has been a busy time for pharmaceutical policy-related announcements. Issues that have been topics of discussion for decades have finally risen to the top of the political agenda, impacting areas such as rare diseases, national pharmacare, and drug pricing, to name a few. These developments are particularly relevant to reimbursement policies.

Interim Advisory Council Report on National Pharmacare Implementation

The Council’s mandate was to provide independent advice to the federal Ministers of Health and Finance on how to best implement national pharmacare in a manner that is affordable for Canadians and their families, employers, and governments.

The Advisory Council released an interim report in March 2019, identifying key challenges with respect to prescription drug coverage, including:

• gaps in coverage (i.e., insufficient coverage or no coverage at all) for approximately 20% of Canadians,
• inconsistent access to prescription drug coverage across jurisdictions and populations, and
• significant growth of and sustainability challenges for Canada’s spending on prescription drugs.

The interim report also included the Council’s recommendations on the core principles that should underpin national pharmacare, as well as initial recommendations to address in the short term to build a foundation for national pharmacare.

Proposed “Core Principles of National Pharmacare”

• Ensure that all Canadian residents have access to prescription drugs based on medical need, without financial or other barriers to access.
• Ensure that coverage is portable and consistent across all jurisdictions.
• Provide access to a comprehensive, evidence-based formulary, with special consideration for drugs for rare diseases.
• Be designed and delivered in partnership with patients and citizens.
• Be founded on strong partnership between federal, provincial, and territorial governments and Indigenous peoples.
• Include a robust pharmaceutical management system that promotes safety, innovation, value-for-money, and sustainability of prescription drug costs.

The report also proposes the following Foundational Elements that must be addressed as fundamental building blocks towards the creation of a national pharmacare program:

• Create a national drug agency.
• Develop a comprehensive, evidence-based national formulary.
• Invest in drug data and information technology (IT) systems.

As is evident below, this interim report helped to inform much of what was proposed vis-à-vis pharmaceutical policy changes in the 2019 Federal Budget.

Federal Budget 2019

Canadian Drug Agency

The government proposes the creation of a new federal agency – Canadian Drug Agency (CDA) – to improve access and prices of prescription drugs. (Interestingly, in an era of “everything old is new again”, the CDA proposal is quite similar to the Canadian Agency for Pharmaceutical Information Assessment [CAPIA] proposal which was developed in the early 1990s and to some extent drove the creation of CADTH’s precursor, the Canadian Coordinating Office for Health Technology Assessment [CCOHTA].)

The CDA is envisioned to be responsible for the following functions:

a) Evaluating the effectiveness of new prescription drugs

• This is currently done on an ad hoc basis by a variety of players in the Canadian health system, including Health Canada, the Canadian Drug Safety and Effectiveness Network (DSEN), individual provincial government agencies, academic organizations, and industry.
• There is no standard framework for real-world evidence generation, although Health Canada recently released a guidance entitled Optimizing the Use of Real World Evidence to Inform Regulatory Decision-Making and there are additional joint efforts underway on this topic between Health Canada and the Canadian Agency for Drugs and Technology in Health (CADTH).

b) Negotiating prices with manufacturers on behalf of public drug plans

• This is currently done by the pan-Canadian Pharmaceutical Alliance (pCPA), which was established by the provincial and territorial governments in 2010 to conduct joint negotiations for brand name and generic drugs in Canada to achieve greater value for publicly funded drug programs and patients through the use of the combined negotiating power of participating jurisdictions.

c) Recommending which drugs are the best value-for-money for Canadians

• This is currently a function of the Canadian Agency for Drugs and Technology in Health (CADTH) and of the Institut National d’Excellence en Santé et en Services Sociaux (INESSS) in the province of Quebec.
• The agency is intended to be national in scope, so it is not clear what the implications are for INESSS and its activities.

d) Providing impartial and independent advice on drug evaluation and price negotiation

• As noted, these functions are currently done by CADTH/INESSS and pCPA, respectively.

e) Consulting with provinces and territories on developing a national formulary

• This is linked to the aspirations towards a national pharmacare program noted above.
• The overall aim would be to create a national baseline of consistent formulary listings and patient access rules which could be applied to both public and private plans.

The federal government believes that having the CDA perform combined value-for-money evaluations and price negotiations could save public drug plans up to $3 billion per year over the long term.

Rare Disease Strategy

For instance, the October 2018 P/T Expensive Drugs for Rare Diseases Working Group proposal of a supplemental process for complex/specialized drugs acknowledged the need for different considerations in the assessment of drugs for rare diseases (DRDs). The pCPA submitted a brief to the House of Commons’ Standing Committee in December 2018 (Barriers to Access Treatment and Drugs for Canadians Affected by Rare Diseases and Disorders), proposing a range of roles for the federal government vis-à-vis DRDs (i.e., funding support, pricing controls, and collaboration with P/T public drug plans and the pCPA to better align, collaborate, and coordinate approaches to address DRD evidence and pricing issues).

Recognizing that Canadians need access to high-cost drugs, the federal government now proposes implementing an official process to ensure that patients with rare diseases have access to effective, medically necessary therapies at an affordable cost. Specifically, the federal government is looking to develop an approach to gather and evaluate evidence for DRDs, to improve the consistency of decision-making/access to these products across Canada, and to develop strategies for negotiating with manufacturers.

Unfortunately, funding for the Drugs For Rare Disease Strategy will not start until 2022-23, with the federal government intending to invest $1 billion over two years and then up to $500 million per year ongoing. It is also likely that this funding will be linked to expected progress on creating and implementing the CDA to drive evaluations and overall cost-containment.

What’s Next?

Regardless of the political results, each proposal provides only high-level direction to what are very complex policy issues that will take a long time to work through. For example, negotiations with public as well as private drug plans to align policies (envisioned under the national formulary initiative) would likely take years, given their diverse incentives as well as the role of medications in achieving provincial health policy goals.

The rare diseases proposal provides patient advocacy groups a concrete opportunity to shape the policy environment for DRDs long into the future. While the federal government is delaying funding for several years and linking it to the creation of the CDA, existing agencies (i.e., CADTH and pCPA) would be more than capable of establishing the framework proposed by the government in the interim.