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Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
Michelle Boudreau - Patented Drug Pricing and Coverage
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Michelle Boudreau - Patented Drug Pricing and Coverage

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  1. Pharmacare 2020 Conference Vancouver, Feb 26-27, 2013 Michelle Boudreau Executive Director, PMPRB
  2. Outline ________________________________________________  Policy objectives in practice  How does it really work: an imperfect alignment?  Concluding remarks2
  3. Policy Objectives in Practice - key quotes and court pronouncements ______________________________________________ “…changes (to Bill C-22) will also ensure consumer protection by creating a drug prices review board to monitor drug prices. . .”  The Honourable Harvie Andre made this comment upon introducing Bill C-22 for second reading on November 20, 1986.  The protection of consumer interests was one of the “Five Pillars” of public policy addressed by amendments to the Patent Act creating the PMPRB.3
  4. Policy objectives in practice- key quotes and court pronouncements ______________________________________________ “…The Board’s interpretation of its mandate under the relevant provisions was consistent with its consumer protection purpose and should not be disturbed.”  Supreme Court of Canada’s decision in the Celgene/Thalomid matter, January 20114
  5. Policy objectives in challenging and changing reality… ________________________________________________  Policy objective of the day – 25 years ago – was Canada’s drug prices would never be the highest and would be, on average, in the “middle”  Very dynamic market with many factors at play  A national regulatory framework that sets a ceiling (“non-excessive price”) for all consumers, all patented drugs and all payers and cash-paying consumers  Transparency in pricing around the globe makes comparisons increasingly challenging as a price regulator5
  6. How does it really work - price tests ________________________________________________  Blend of therapeutic improvement & international referencing  Recognize incremental pharmaceutical innovation  At introduction, price premium aligned with therapeutic improvement:  Four levels of therapeutic improvement: 1) Breakthrough – Median of International Price Comparison (MIPC) 2) Substantial Improvement – Higher of top of Therapeutic Class Comparison (TCC) and the MIPC 3) Moderate Improvement – Higher of mid-point between top of TCC test and the MIP, and top of TCC (primary & secondary factors apply here) 4) Slight/No Improvement – Top of TCC  After introduction, monitor Average Transaction Price (ATP) subject to CPI based price increases and cannot be greater than highest international price (HIP)6
  7. How does it really work - price tests ________________________________________________  Price tests are applied in accordance with therapeutic improvement  Based on specific circumstances, price ceilings at intro may be set differently  For example, in 2011, within the “slight or no improvement category” (70% of new drugs)  the highest international price comparison (HIPC) test sets the Maximum Average Potential Price (MAPP) 30% of the time because the TCC was higher than HIPC, or a TCC could not be conducted  the TCC sets the MAPP 40% of the time7
  8. How does it really work - MAPP compared with public price ________________________________________________ Drug Cat Intro- Intro - Pivotal MAPP Intro Publicly MIP HIPC Test Bench available Price price (ATP) Brand-X SNI 1.15 2.95 TCC 2.45 0.68 0.69 Brand-Y SNI 1.40 1.85 TCC 1.52 1.50 1.50 Generic-A SNI 0.85 1.50 TCC* 0.65 0.42 0.33 * Brand price sets the MAPP – brand price $0.658
  9. Average Ratio of 2011 Price to Introductory Price, by Year of Introduction ________________________________________________ 1.10 1.06 1.06 1.06 1.05 1.04 1.03 1.02 1.01 1.01 1.00 1.00 0.99 0.98 0.99 Ratio 0.97 0.95 0.94 0.93 0.93 0.90 0.85 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: PMPRB9
  10. Concluding remarks ________________________________________________  Recognizing innovation and ensuring a non-excessive price = a delicate balance  Very dynamic market with many factors at play  Consumer protection vis-à-vis drug pricing remains an important policy objective  Transparency in pricing around the globe makes comparisons increasingly challenging as a price regulator  Affordable access and sustainability is a concern shared by consumers, regulators and payers10
  11. Thank you. Merci. michelle.boudreau@pmprb-cepmb.gc.ca www.pmprb-cepmb.gc.ca Twitter: @PMPRB_CEPMB11
  12. Annex – additional information and statistics12
  13. Market trends - Canada Compared to the World ________________________________________________  In 2005 and 2011, Canadian drug sales accounted for 2.4% and 2.6%, respectively, of the global market  Small, but significant market13
  14. Market trends - Canada Compared to the World ________________________________________________  Growth in drug sales outpacing comparator countries14
  15. Market trends - Canada Compared to the World ________________________________________________  Canadian prices comparatively higher than a number of OECD countries 2.50 Avg Bilateral Foreign-to-Canadian Price Ratios: Top 300 selling oral solids in Canada 2.00 1.50 1.00 0.50 0.00 IMS Health Data, 201015
  16. Market trends - Canadian Public Drug Plan* Spending on Rx Drugs, Rates of Growth and Annual Totals, 2005/06 to 2010/11 * NPDUIS, all public drug plans, including NIHB, are included with the exception of Newfoundland; Yukon; NWT’s and Quebec. Its important to keep in mind that there may be some provincial plans, like disease specific plans, that are not included even if the province is included. The totals include drug cost, retail/wholesale mark-ups as well as dispensing fees.16
  17. PMPRB Price Tests - How Does it Really Work? ________________________________________________  Of the 109 New Drug Products introduced in 2011:  12% under investigation  69% were of slight or no improvement  25% of moderate improvement  5% of substantial improvement 1% breakthrough17
  18. PMPRB Price Tests - International Referencing ________________________________________________  Reference pricing at introduction and for existing drugs based on 7 comparator countries - France, Germany, Italy, Sweden, Switzerland, UK, and US  Policy changes in these countries could impact prices in Canada  Over last three years, Germany has most often been the highest referenced price for PMPRB price tests, followed by US  Recent cost containment measures by reference countries may lead to lower prices in Canada (e.g., Germany) Frequency in setting Highest International Price Comparison test at introduction 16 14 12 10 8 6 4 2 0 France Germany Italy Sweden Switzerland UK USA 2008 0 2 0 1 0 2 3 2009 0 7 0 1 1 0 3 2010 0 6 0 0 0 0 4 2011 0 5 1 1 0 0 1518
  19. Regulatory Statistics High level of compliance - On average, 93-95% overall compliance 2011 2010 New Drug Products 109 68 Introduced Number of 69 87 Investigations Between 2000 and 2009, average of 86 new patented drug products/year  Of the 109 new drug products introduced in 2011:  79% within Guidelines  13% under investigation  8% outside of Guidelines but do not trigger an investigation19

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