The Mad, Fairytale World of Drug Approval in Canada

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Gerry Jeffcott, of 360 Public Affairs, gave a presentation for the CCSN on the drug approval process in Canada on March 27, 2014. He outlines the divide between public and private networks, cost management, as well as the review and approval process for pharmaceuticals in Canada.

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The Mad, Fairytale World of Drug Approval in Canada

  1. 1. The Mad, Fairy-tale World of Drug Approval in Canada! CCSN Webinar Presentation March 27, 2014 Gerry Jeffcott Senior Associate, 3Sixty Public Affairs
  2. 2. Presentation Overview • The Canadian medication review and approval process • Health Canada • The PMPRB • National HTA processes • Public plans • Private plans • Uncrating the annual Canadian pharmaceuticals bill • Hospitals • Public payers • Private payers • Pharmaceuticals cost management • Public plans • Private plans
  3. 3. Canadian Pharmaceutical Review and Approvals Process Step 1 – Marketing Authorization Health Canada review Safety, efficacy and manufacturing quality Notice of Compliance (NoC) / Notice of Compliance with conditions (NoC/c) Product monograph outlines indications covered and clinical claims which can be made Step 2 – Pricing Review Patented Medicines Prices Review Board (PMPRB) review Maximum Average Potential Price (MAPP) established Step 3 – Reimbursement Review Common Drug Review (CDR) Expert review of comparative clinical and cost-effectiveness for most new medicines Formulary listing recommendation issued (list, do not list or list with conditions) Pan-Canadian Oncology Drug Review (pCODR) Expert review of comparative clinical and cost-effectiveness for oncology medications Formulary listing recommendation issued (list, do not list or list with conditions) Local /Regional Review (For generics and older medications) Expert review of comparative clinical and cost-effectiveness Formulary listing recommendation issued (list, do not list or list with conditions) Step 4 – Jurisdictional Formulary Decision-making Public Drug Benefit Plan review of expert committee recommendations For consideration of jurisdictional budgetary capacity, plan characteristics, determination of clinical criteria (if any), price and utilization negotiations and reimbursement status Formulary listing decision issued / Inclusion on formulary or and / or
  4. 4. Federal Reviews • Responsible for protecting Cdns’ health and well-being • Regulatory authority charged with ensuring medicines are safe, effective and manufactured appropriately • NoCs outline indications and allowable clinical clams • Cost / prices are not considered • Ensures that prices for patented medicines sold in Canada are not “excessive” • Determines the maximum (factory-gate) prices that can be charged in Canada for patented medications • Also regulates the level of price increase manufacturers may take on an annual basis Health Canada review Safety, efficacy and manufacturing quality Notice of Compliance (NoC) / Notice of Compliance with conditions (NoC/c) Product monograph outlines indications covered and clinical claims which can be made Patented Medicines Prices Review Board (PMPRB) review Maximum Average Potential Price (MAPP) established
  5. 5. National HTA Reviews • Independent agencies created and governed by their sponsoring jurisdictions • Responsible for conducting comparative clinical and cost- effectiveness reviews • Produce non-binding, scientifically-based, expert recommendations addressing whether a medication should be reimbursed and under what circumstances • Generally “No means no and yes means maybe” Common Drug Review (CDR) Expert review of comparative clinical and cost- effectiveness for most new medicines Formulary listing recommendation issued (list, do not list or list with conditions) Pan-Canadian Oncology Drug Review (pCODR) Expert review of comparative clinical and cost- effectiveness for oncology medications Formulary listing recommendation issued (list, do not list or list with conditions) or
  6. 6. Formulary Decision-making (Public Plans) • Public drug plans vary widely, but all determine coverage on their drug benefit plan formularies • All rely on advice from local expert review committees; Some conduct additional HTA reviews after CDR/pCODR • All consider: • Budgetary capacity • Plan characteristics • Determination of clinical criteria (if any) • Price and utilization negotiations Public Drug Benefit Plan review of expert committee recommendations For consideration of jurisdictional budgetary capacity, plan characteristics, determination of clinical criteria (if any), price and utilization negotiations and reimbursement status Formulary listing decision issued / Inclusion on formulary Local /Regional Review (For generics and older medications) Expert review of comparative clinical and cost- effectiveness Formulary listing recommendation issued (list, do not list or list with conditions)
  7. 7. Formulary Decision-making (Public Plans) Local • Req’d in BC, AB, ON • Optional in SK • MB requires UMAs • Atlantic provinces do not have sufficient infrastructure to support them • Not available in QC, but under review pan-Cdn Purchasing Alliance • A nat’l negotiations mechanism • Involves all provinces and territories (except Quebec). • One jurisdiction negotiates on behalf of all • Separate agreements are completed with each interested jurisdiction Product Listing / Utilization Management Agreements • Confidential negotiated agreements between innovative manufacturers and drug benefit programs to facilitate improved access • Terms intended to address limitations identified by HTA reviews • Typically involve manufacturers offering financial considerations (i.e., rebates)
  8. 8. Formulary Decision-making (Private Plans) • Many plans are still “open”, but a growing percentage are “managed” • Individual plan sponsors decide what to cover, but based on advice from insurers, PBMs, benefits consultants, brokers and others • Insurers typically offer plan templates which can be customized to meet a given sponsor’s needs • Formal medication review committees generally do not exist within the private drug plan sector • Reviews are conducted by in-house committees, contracted health professionals or contracted external expert groups. They are used to assess new products and recommend formulary positioning
  9. 9. Who Pays for Pharmaceuticals in Canada Total 2013 Rx Meds Expenditure - $29.3 B* 100% of total Public Sector share - $12.2 B 41.6% of total Provincial Drug Benefit Plans - $10.5 B 35.8% of total; 86.1% of public share Federal Drug Benefit Plans - $0.6 B 2.0% of total; 4.9% of public share Other Publicly Funded Meds Expenditure - $1.1 B 3.8% of total; 9.0% of public share Private Sector share - $17.1 B 58.4% of total Private Insurers - $10.1 B 34.5% of total; 59.1% of private share Out-of-Pocket Contributions (from consumers) - $7.0 B 23.9% of total; 40.9% of public share * Not including medicines dispensed in hospitals Source: Prescribed Drug Spending in Canada 2012 Report, CIHI
  10. 10. Rx Medicines Administered in Hospitals • According to Industry Canada’s Pharmaceutical Industry Profile, hospital sales represented 11% or $2.45 B of the $22.3 B spent on pharmaceuticals in 2011 • Medications administered in Canadian hospitals to eligible residents are fully funded by the public health care system (Medicare) • Note – these sales are separate from and in addition to the totals from the previous slide • Pharmaceuticals purchased by hospitals are counted as part of the national hospitals bill by CIHI
  11. 11. Public Payers • Provinces and territories collectively pay for almost 40% of Rx meds nationally through their drug benefit programs • Variations exist, but all 10 provinces and 3 territories provide subsidized Rx meds for welfare recipients - most also cover seniors • There are also programs to address special needs, (i.e., organ recipients, cystic fibrosis patients, etc.), but these vary widely by jurisdiction • All require varying co-payments and/or deductibles, all manage restrictive formularies and have mandatory generic substitution policies in place. • Some offer ‘universal’ (BC, SK, MB, QC & soon AB, ) programs and others offer catastrophic coverage (ON, NS, PE, NF & soon NB) • There is significant variation in coverage rules and reimbursement of specific medications between the provinces Provincial Drug Benefit Plans - $10.5 B 35.8% of total; 86.1% of public share
  12. 12. Public Payers • The fed. gov’t runs several programs which pay for about 2% of the total expenditure on Rx meds in Canada • They provide subsidized coverage for Rx meds directly to: • First Nations and Inuit persons • The military • RCMP members • Veterans (military and RCMP) • Inmates in federal prisons • Refugees • The fed. gov’t. also funds and co-manages the Public Service Health Care Plan (PSHCP) with its unions (the cost of which is not included in the 2% figure) Federal Drug Benefit Plans - $0.6 B 2.0% of total; 4.9% of public share
  13. 13. Public Payers • This category refers to spending by other gov’t departments / agencies on Rx meds • Primarily it includes workers compensation programs’ sending and the drug insurance fund premiums collected by Quebec Other Publicly Funded Meds Expenditure - $1.1 B 3.8% of total; 9.0% of public share
  14. 14. Private Payers • Private plans pay for >35% of Rx meds costs in Canada. Provided by: • Life and Health Insurers (SunLife, Manulife, Great-West Life, etc.) • Not-for-Profit providers (Blue Cross, Green Shield Canada) • Among them, 10 companies dominate the national market, collectively representing 95% of the business • In Ontario, (53% of the nat’l market), 3 players control the lion’s share • Reg’l markets are dominated by 1-2 players (usually Blue Cross affiliates) • Each has multiple plan models which are customized to meet sponsor needs • The majority of plans cover most Rxs (based on some standard restrictions) • But, a growing number of plans are “managed” through customized formularies and/or restrictive measures Private Insurers - $10.1 B 34.5% of total; 59.1% of private share
  15. 15. Private Payers • More than 21% of the total nat’l Rx meds bill is paid by individuals, including those who not eligible for public or private plan coverage and/or whose meds are not covered by public or private payers. They include: • Self-employed and their families • The unemployed and their families • Non-insured or under-insured workers and their families • Much of the out-of-pocket expense comes from co-payments and deductibles • Note - Only about 10% of seniors maintain private insurance coverage beyond retirement which means that any meds not covered by the provincial formulary are out-of-pocket expenses for those patients Out-of-Pocket Contributions (from consumers) - $7.0 B 23.9% of total; 40.9% of public share
  16. 16. Cost-management (Public Plans) • Limits on OTCs, hospital meds, “lifestyle” & experimental treatments • Formulary reviews • Cost-sharing • Price / reimbursement limits • Mandatory generic substitution • Special authorization • Cost-effectiveness reviews • Clinical criteria • PLAs • Increased focus on utilization management (particularly for very high-cost meds) • Increased reliance on PLAs (particularly via the pCPA process) • Increased inter-jurisdictional collaboration • Increased attention on “value” differentiations Traditional Approaches What the Future Holds
  17. 17. Cost-management (Private Plans) • Limits on OTCs, hospital meds, “lifestyle” & experimental treatments • Cost-sharing • Annual or lifetime maximums • Mandatory generic substitution • Managed formularies • Tiered formularies • Plans which mirror public plans • Special authorization requirements • Therapeutic substitution • Case management • Pooling schemes CLHIA Report on Rx Drug Policy Calls for: − Health Canada to take a tougher approach to medication approvals − Strengthened consumer protection mandate for the PMPRB − Common, national minimum formulary − National, comprehensive, high-cost medication strategy − New approach to addressing orphan medicines
  18. 18. Discussion Step 1 – Marketing Authorization Health Canada review Safety, efficacy and manufacturing quality Notice of Compliance (NoC) / Notice of Compliance with conditions (NoC/c) Product monograph outlines indications covered and clinical claims which can be made Step 2 – Pricing Review Patented Medicines Prices Review Board (PMPRB) review Maximum Average Potential Price (MAPP) established Step 3 – Reimbursement Review Common Drug Review (CDR) Expert review of comparative clinical and cost-effectiveness for most new medicines Formulary listing recommendation issued (list, do not list or list with conditions) Pan-Canadian Oncology Drug Review (pCODR) Expert review of comparative clinical and cost-effectiveness for oncology medications Formulary listing recommendation issued (list, do not list or list with conditions) Local /Regional Review (For generics and older medications) Expert review of comparative clinical and cost-effectiveness Formulary listing recommendation issued (list, do not list or list with conditions) Step 4 – Jurisdictional Formulary Decision-making Public Drug Benefit Plan review of expert committee recommendations For consideration of jurisdictional budgetary capacity, plan characteristics, determination of clinical criteria (if any), price and utilization negotiations and reimbursement status Formulary listing decision issued / Inclusion on formulary or and / or
  19. 19. Thank you! Gerry Jeffcott gjeffcott@3sixtypublicaffairs.com Ph – (613) 851-1602

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