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Pharmaceutical Policy a Major Pillar in Canadian Federal Election
anadians go to the polls on October 21, 2019 to elect their Federal government representatives. The party that forms the next Federal government will determine whether planned policy initiatives focused on the pharmaceutical system will move forward. While we have covered the early stages of these initiatives in past issues of the Global Forum, the following represents the current state of key policies and their potential impact if the current Liberal government is re-elected.
Patented Medicines Prices Review Board
Draft Regulations were released via the Canada Gazette Part I in late 2017, with subsequent comments making it clear that more time and more substantive consultations with stakeholders would be necessary. A Steering Committee on Guidelines Modernization and a Technical Working Group were established to assess and make recommendations on implementation issues related to the proposed Regulations.
Health Canada announced the final Regulations on August 9, 2019 with no substantive changes from the original draft despite months of efforts and input received from a wide range of stakeholders and experts. A summary of the changes is in Figure 1; the amended Regulations will come into force on July 1, 2020.
Change | Details |
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Change in Reference Countries |
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Reporting Third Party Price Rebates |
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Additional Economics-Based Price Review Factors |
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Reduced Reporting Requirements |
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- New comparator countries: Australia, Belgium, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, and United Kingdom
- Removal of US and Switzerland from the original basket of countries
- Prices and revenue information reported by patentees must be net of all price or other adjustments including discounts, rebates, and free goods and services made by the patentee or “any party that directly or indirectly purchases or reimburses for the purchase of the medicines”
- This includes confidential pricing agreements with provinces, etc.
- Additional price review factors to consider while determining whether the price of a patented medicine in excessive
- Pharmacoeconomic value of the medicine in Canada
- Size of the market for sale of medicine in Canada and countries other than Canada
- GDP and GDP per capita in Canada
- For patented generics, veterinary and over-the-counter drugs
- Reporting only by specific request by the PMPRB
A group of pharmaceutical companies has filed a judicial review application, challenging the constitutionality of the changes to the methods by which the PMPRB regulates the costs of patented medicines. The basis of their argument is that “the Federal government does not have the authority to fundamentally alter the role of the PMPRB through the recent changes to the Patented Medicines Regulations.”
National Pharmacare
The final report outlined 60 recommendations for implementing a National Pharmacare program, covering the current landscape of drug coverage, the key challenges facing the Canadian drug prescription system, and a proposal for implementing and financing such a program. Figure 2 summarizes some key recommendations.
Theme | Recommendations |
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Principles for National Pharmacare |
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Implementation of National Pharmacare |
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Canada Drug Agency (CDA) |
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Biosimilars |
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Expensive Drugs for Rare Disease |
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Financing of National Pharmacare |
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Role of Private Payers |
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- Federal government to work with provincial and territorial (P/T) governments to establish a universal, single-payer, public system of prescription drug coverage in Canada
- The five fundamental principles embodied in the Canada Health Act (i.e., Universal, Comprehensive, Accessible, Portable, and Public) should be applied to National Pharmacare
- Begin implementation in 2020
- Launch National Pharmacare with a list of essential medicines by January 1, 2022
- Expand the initial essential medicines list toward a fully comprehensive formulary no later than January 1, 2027
- CDA was introduced as a concept in the March 2019 Federal budget
- Positioned as a new Federal agency to improve access to and prices of prescription drugs
- Envisioned to be responsible for evaluating the effectiveness of new prescription drugs; negotiating prices with manufacturers on behalf of public drug plans; recommending which drugs are the best value-for-money for Canadians; providing impartial and independent advice on drug evaluation and price negotiation; and consulting with provinces and territories on developing a national formulary (for the purposes of a National Pharmacare program)
- Recommendation to mandate biosimilar substitution for innovator biologics
- This strategy was previously announced in the March 2019 Federal Budget
- The CDA would establish a distinct pathway for the consideration of drugs for rare diseases (DRDs)
- Within this framework, CDA would work with clinicians and patients to gather structured real world evidence on the impact of DRDs and negotiate performance-based funding agreements with manufacturers
- The Federal government would provide long-term funding to provinces and territories, including the incremental cost of National Pharmacare, in a manner similar to other health transfer payments
- NOTE: Inter-governmental financing arrangements require the consent of the Parliament of Canada and at least 70 percent of participating jurisdictions representing two-thirds of their combined population
- Private insurers would be permitted to provide coverage for copayments as well as for drugs not on the national formulary
It is clear that a number of the Council’s recommendations would result in Federal government encroachment on the responsibilities of P/T governments – everything from decisions about automatic substitution of biosimilar products, to pricing negotiations, and health system funding. Thus, a key issue determining the feasibility of moving forward with the Advisory Committee’s proposal is the willingness of P/T governments to relinquish power in some of their core areas of constitutional purview.
As noted above, financing arrangements envisioned for National Pharmacare would require approval by 70 percent of participating provinces and territories, representing two-thirds of their combined populations. Some provinces have already stated their opposition to the plan, although this has not dissuaded the Federal government in their quest.
Implications: PMPRB
- In addition to the issues raised by patient groups noted above, the impact on clinical trials coming to Canada is another concern. The consequences of such changes on patients with cancer, rare conditions, and other vulnerable populations where important new therapies are being developed — more specifically, launch delays which impact these populations’ access to these therapies — could be catastrophic.
- It is very difficult to calculate the impact of the regulatory changes in the absence of updated PMPRB Guidelines that define how the new Regulations will be operationalized. The draft Guidelines will be published for comment in September 2019, and will be finalized in advance of the July 1, 2020 implementation in parallel to implementation of the Regulations. The uncertainty this introduces to decisions made on a global basis cannot be underestimated.
- The absence of “genuine” consultation throughout this process has undermined the credibility of both Health Canada and PMPRB staff with stakeholders. The impact of this on relationships and engagement will be an important determinant of the success of future federal health policy initiatives.
Implications: National Pharmacare
- It is not clear how the role of private drug plans will play out under a National Pharmacare program. Currently, many patients have private plan access to treatments that are not funded under public drug plans. The risk of private insurers removing drug plans from their benefit offerings could impact timely patient access to new medications.
- Addressing the complexity of issues related to P/T versus Federal jurisdiction will be critical to the ability to move forward with any National Pharmacare program. These kinds of discussions have never been simple in the Canadian context and are likely to drag on much longer than anticipated by any stakeholder.