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Canadian Institute Conference - Arvind Mani's Presentation - Final - April 1 2015

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Canadian Institute Conference - Arvind Mani's Presentation - Final - April 1 2015

  1. 1. pdci.ca ©2015 PDCI Market Access Global Trends: Drug Pricing, Reimbursement and Market Access Arvind Mani Director, Market Access and Policy Research E-mail: Arvind.Mani@pdci.ca 1©2015 PDCI Market Access
  2. 2. 2 Canada in the Global Context Product Listing Agreements Pricing Cost Containment Trade Trade: How do international trade agreements potentially impact the Canadian pricing and reimbursement landscape? Pricing: To what extent does pricing from other markets impact pricing in Canada? Cost Containment: What is the global market access environment and emerging trends currently faced by manufacturers? PLAs: What are the global trends related to PLAs and how do they compare to Canadian PLA negotiations? ©2015 PDCI Market Access
  3. 3. Context 3©2015 PDCI Market Access
  4. 4. 4,600 The number of drug candidates in clinical development in 20133 $930bn The spend on pharma R&D in the past 8 years1 30% The proportion of drug candidates in cancer indications 20133 1Scrip 100 survey, 3Pharmaprojects Source: Scrip Intelligence, January 9th 2015 4 47 The number of novel products launched in 20132 Global Pharmaceutical Innovation 10 The number of first-in-class products launched in 20132 ©2015 PDCI Market Access
  5. 5. 120 Number of companies exceeding $500m drug sales globally in 20131 $5.2tn Drug sales in the last 8 years1 $709bn Drug sales recorded for 20131 1Scrip 100 survey, 2Scrip Intelligence New Active Substance Launches in 2013 Source: Scrip Intelligence, January 9th 2015 5 Global Pharma Sales ©2015 PDCI Market Access
  6. 6. 2,700,000 EMPLOYEES WORLDWIDE 810,000 US - 20134 700,000 Various other countries5 693,195 Europe - 20136 ~100,000 Japan and South Korea 4PhRMA, 5IFPMA, 6EFPIA Source: Scrip Intelligence, January 9th 2015 Global Pharma Employment 6©2015 PDCI Market Access
  7. 7. Canada as percentage of Global Market  Since 2006, Canadian drug sales continually account for ~2.6% of the global market 7 Distribution of Drug Sales Among Major National Markets, 2012 Source: PMPRB 2012 Annual Report citing IMS Health ©2015 PDCI Market Access
  8. 8. Canadian Pharma market larger than UK, Spain 8 Source: IMS Market Prognosis, May 2012 ©2015 PDCI Market Access
  9. 9. 2,700,000 EMPLOYEES WORLDWIDE 810,000 US - 20134 700,000 Various other countries5 693,195 Europe - 20136 ~100,000 Japan and South Korea 4PhRMA, 5IFPMA, 6EFPIA, 7Industry Canada Source: Scrip Intelligence, January 9th 2015 Global vs. Canada Pharma Employment 9 26,000 Canada - 20147 ©2015 PDCI Market Access
  10. 10. Global vs. Canada Pharma (in USD) 1PhRMA 22013 PMPRB Annual Report 3Scrip 100 survey 4Industry Canada 10 $140 bn Global pharmaceutical R&D in 20131 $0.7 bn Canadian pharmaceutical R&D in 20132 $709 bn Global drug sales in 20133 $20.5 bn Canadian pharmaceutical sales in 20132 26,000 Canadian pharma employees4 2.7 mn Global employees in 20133 ©2015 PDCI Market Access
  11. 11. Trade 11 Product Listing Agreements Pricing Cost Containment Trade ©2015 PDCI Market Access
  12. 12. Canada - EU Trade Agreement - CETA Comprehensive Economic and Trade Agreement (CETA): Pharma IP Provisions: (Details still to be announced) • Patent Term Restoration  Extended Data Protection •  Innovator Right of Appeal 12©2015 PDCI Market Access
  13. 13. CETA and Patent Act 13 Innovative Pharmaceutical lndustry Generic Pharmaceutical lndustry Private Drug Plans & Insurers PMPRB and Staff Patient Advocacy Organizations Health Canada Public Drug Plans Labour organizations ©2015 PDCI Market Access
  14. 14. Potential Amendments & Implications 1. PMPRB Jurisdiction & Definitions 2. Excessive Price Factors 3. Research & Development 4. Resolution, Hearings and Arbitration 5. Practical Amendments 6. Reference Countries 14©2015 PDCI Market Access
  15. 15. Pricing 15 Product Listing Agreements Pricing Cost Containment Trade ©2015 PDCI Market Access
  16. 16. Factors in setting pharmaceutical prices Domestic Factors • Return on investment • Competition / Market forces • Prices of alternatives • Price regulation / HTA / reimbursement policies International /Global Factors • External price referencing • Currency fluctuations • Health Reform 16©2015 PDCI Market Access
  17. 17. External Price Referencing • Most countries (other than the UK) apply some form of external referencing • Approaches / methodologies vary significantly 17©2015 PDCI Market Access
  18. 18. Price Change – PMPRB Reference Countries 18©2015 PDCI Market Access
  19. 19. Canada vs. International Price Trends (PMPRB) Rank 2005 Ratio 1 Italy 0.88 2 France 0.99 3 Canada 1.00 4 Sweden 1.05 5 UK 1.11 6 Germany 1.15 7 Switzerland 1.21 8 US 1.83 19 Rank 2013 Ratio 1 France 0.72 2 UK 0.78 3 Italy 0.79 4 Sweden 0.90 5 Switzerland 0.95 6 Canada 1.00 7 Germany 1.04 8 US 2.07 • Canadian prices higher than most European prices • There may be changes in PMPRB price guidelines if “high” Canadian prices persist Average Foreign-to-Canadian Price Ratios Source: PMPRB ©2015 PDCI Market Access
  20. 20. Pricing & International Price Referencing • Price increases are possible in the US, and to a limited extent in Canada but rarely in Europe and Japan • Currency exchange fluctuations are beyond the control of manufacturer • Price cuts are common in many European markets • Reimbursement status is reviewed periodically in some markets which can lead to new price negotiations • New health reform policies (e.g., Germany) 20©2015 PDCI Market Access
  21. 21. Cost Containment 21 Product Listing Agreements Pricing Cost Containment Trade ©2015 PDCI Market Access
  22. 22. Emerging Developments Related to Cost Containment 1. Delisting of Oncology Treatments 2. Off-Label Prescribing 3. Downgrading Coverage 4. Uptake of Biosimilars 5. Private Payer Exclusivity Arrangements 22©2015 PDCI Market Access
  23. 23. PDCI Survey on Global Cost Containment Trends 7 2 Location of Individuals Canada Europe 23 2 3 4 Perspective Private Payer Public Payer Industry • On-line survey • Contacted individuals in Canada and Europe • Survey conducted from March (19-25, 2015) Focused on 4 Elements: 1. Will other public payers attempt similar cost containment? 2. Will private payers attempt similar cost containment? 3. When could this happen in Canada? 4. How will industry respond? ©2015 PDCI Market Access
  24. 24. Results of PDCI Survey on Global Cost Containment Trends 24 1. Delisting of Oncology Treatments International Industry Canadian Public Payer Canadian Private Payer Canadian Industry Q1: Will other public payers start delisting cancer products? 0 3 6 9 No Yes Q2: Will private payers start delisting cancer products? 0 3 6 No Yes Q3: When will Canadian public payers start delisting cancer products? 0 3 6 ©2015 PDCI Market Access
  25. 25. Results of PDCI Survey on Global Cost Containment Trends 25 Public Payer: “It is unlikely a price decrease will overcome a lack of clinical evidence so proposals for PLAs may focus more on evidence gathering and/or risk-sharing.” Private Payer: “I hope pharma reconsiders their pricing models. Assuming quality and efficacy are comparable, then public payers are absolutely right to insist on price reduction or other added value as a condition of listing. Governments are stewards of taxpayer money for which there is no shortage of alternative uses.” Q: How do you think industry will respond to the delisting of their products? ©2015 PDCI Market Access
  26. 26. Results of PDCI Survey on Global Cost Containment Trends 26 Off-Label Prescribing Provisions International Industry Canadian Public Payer Canadian Private Payer Canadian Industry Q1: Will other public payers start using off- label prescribing provisions? 0 3 6 9 No Yes Q2: Will private payers start using off-label prescribing provisions? 0 3 6 9 No Yes Q3: When will Canadian public payers start using off-label prescribing provisions? 0 3 ©2015 PDCI Market Access
  27. 27. Results of PDCI Survey on Global Cost Containment Trends Q: How do you think industry will respond to the introduction of provisions for off-label prescribing? 27 Public Payer: “They [industry] will not appreciate the increased competition it [off-label prescribing] creates. In the Canadian market they may respond by lowering confidential public prices to maintain the private market.” International Industry: “They [industry] will encourage that evidence based medicine with appropriate labels should be used.” ©2015 PDCI Market Access
  28. 28. Results of PDCI Survey on Global Cost Containment Trends 28 Downgrading Coverage of Currently Listed Products International Industry Canadian Public Payer Canadian Private Payer Canadian Industry Q1: Will other public payers become more aggressive in reassessing currently covered products? 0 3 6 9 No Yes Q2: Will private payers become more aggressive in reassessing currently covered products? 0 3 6 No Yes Q3: When will Canadian public payers becoming more aggressive in reassessing currently covered products? 0 3 6 ©2015 PDCI Market Access
  29. 29. Results of PDCI Survey on Global Cost Containment Trends Q: How do you think industry will respond to aggressive reassessments of their products? 29 Private Payer: “Concede on original pricing to re-establish the relative value of their products relative to competitors.” Public Payer: “More aggressive marketing to physicians.” ©2015 PDCI Market Access
  30. 30. Results of PDCI Survey on Global Cost Containment Trends 30 Uptake of Biosimilars: Substitution International Industry Canadian Public Payer Canadian Private Payer Canadian Industry Q1: Will public payers move toward substitution of the biosimilar for the brand biologic? 0 3 6 9 No Yes Q2: Will private payers move toward substitution of the biosimilar for the brand biologic? 0 3 6 No Yes ©2015 PDCI Market Access
  31. 31. Results of PDCI Survey on Global Cost Containment Trends 31 Uptake of Biosimilars: Therapeutic Priorities Rank the following biosimilar classes in terms of which will have the most impact in driving payer adoption of biosimilar. 3 points = most impact; 2 points = medium impact; 1 point = least impact; 0 points = no impact 0 3 6 9 12 15 18 21 24 Rheumatoid Arthritis Diabetes Oncology International Industry Canadian Public Payer Canadian Private Payer Canadian Industry ©2015 PDCI Market Access
  32. 32. Results of PDCI Survey on Global Cost Containment Trends 32 Exclusivity Agreements Q2: Will public payers pursue exclusivity agreements? International Industry Canadian Public Payer Canadian Private Payer Canadian Industry Q1: Will other private payers pursue exclusivity agreements? 0 3 6 9 No Yes 0 3 6 No Yes ©2015 PDCI Market Access
  33. 33. Results of PDCI Survey on Global Cost Containment Trends Q: How do you think industry will respond if private payers start to pursue more exclusivity agreements? 33 Public Payer: “Much the same way as they did to public payers - PLAs, risk-shares and evidence-gathering.” Private Payer: “More aggressive marketing push direct to members via patient assistance programs, financial assistance” Public Payer: “The market will become more of an all or nothing for manufacturers. For the aggressive manufacturers there is a chance to get a greater market share. But overall manufacturers will not like this because it ultimately will drive down their profit margin per unit.” Canadian Industry: “More aggressive PLAs. As we saw years back with PPIs, there will always be a company that is willing to push negotiations for exclusivity” ©2015 PDCI Market Access
  34. 34. Product Listing Agreements 34 Product Listing Agreements Pricing Cost Containment Trade ©2015 PDCI Market Access
  35. 35. Product Listing Agreements 35 The Performance Based Risk Sharing (PBRS) web-enabled database was developed by the Pharmaceutical Outcomes Research & Policy Program at the University of Washington https://depts.washington.edu/pbrs/index.php ©2015 PDCI Market Access
  36. 36. PBRSA - Defined “Performance-based risk-sharing arrangements (PBRSAs)—involve a plan by which the performance of the product is tracked in a defined patient population over a specified period of time and the amount or level of reimbursement is based on the health and cost outcomes achieved.” 36 Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other Medical Products, June, 1, 2014, Garrison, Towse and Carlson. ©2015 PDCI Market Access
  37. 37. Taxonomy 37 Health outcomes- based schemes Non-outcomes based schemes Performance-based schemes between health care payers and manufacturers Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other Medical Products, June, 1, 2014, Garrison, Towse and Carlson. ©2015 PDCI Market Access
  38. 38. Taxonomy Outcomes guarantee Clinical Endpoint [E.X: Bortezomib in UK] Intermediate Endpoint [E.X: Simvastatin in US] Performance-based schemes between health care payers and manufacturers Health outcomes-based schemesNon-outcomes based schemes Performance-linked reimbursement (PLR) Pattern or process of care [E.X: OncotypeDX in US (United Healthcare)] Only in research [E.X: Cochlear implants in US(CMS)] Only with research [E.X: Risperidone in France] Coverage with evidence development (CED) Conditional coverage Conditional treatment continuation (CTC) [E.X: Alzheimer’s drugs in Italy] 38 Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other Medical Products, June, 1, 2014, Garrison, Towse and Carlson. ©2015 PDCI Market Access
  39. 39. Conditional Treatment Continuation Schemes 0 2 4 6 8 10 12 14 16 NumberofSchemes 39 Source: Office of Health Economics Research & Consulting, University of Washington 2014 Conditional treatment continuation: continuation of coverage for individual patients is conditioned upon meeting short-term treatment goals ©2015 PDCI Market Access
  40. 40. Taxonomy Outcomes guarantee Clinical Endpoint [E.X: Bortezomib in UK] Intermediate Endpoint [E.X: Simvastatin in US] Performance-based schemes between health care payers and manufacturers Health outcomes-based schemesNon-outcomes based schemes Performance-linked reimbursement (PLR) Pattern or process of care [E.X: OncotypeDX in US (United Healthcare)] Only in research [E.X: Cochlear implants in US(CMS)] Only with research [E.X: Risperidone in France] Coverage with evidence development (CED) Conditional coverage Conditional treatment continuation (CTC) [E.X: Alzheimer’s drugs in Italy] 40 Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other Medical Products, June, 1, 2014, Garrison, Towse and Carlson. ©2015 PDCI Market Access
  41. 41. Performance-Linked Reimbursement Schemes 0 5 10 15 20 25 30 NumberofSchemes 41 Source: Office of Health Economics Research & Consulting, University of Washington 2014 Performance-linked reimbursement: reimbursement level for covered products is tied, by formula, to the measure of clinical outcomes in the “real world” ©2015 PDCI Market Access
  42. 42. Taxonomy 42 Health outcomes- based schemes Non-outcomes based schemes Performance-based schemes between health care payers and manufacturers Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other Medical Products, June, 1, 2014, Garrison, Towse and Carlson. ©2015 PDCI Market Access
  43. 43. PDCI pCPA Benchmarking Survey • A request was sent to fill out the survey was sent to all the companies that have successfully negotiated an agreement with pCPA • Six companies, for a total of 7 products responded: • 1 oncology product • 6 non-oncology products List (including list with criteria/criterion, list with clinical criteria and/or conditions and list in a similar manner to other drugs in class) 66% Not considered cost effective at submitted price 17% Do not list 17% HTA Recommendations for Surveyed Products 43©2015 PDCI Market Access
  44. 44. PDCI pCPA Benchmarking Survey Types of financial agreements that were agreed upon Answer Choices Responses Price rebate (i.e. %discount from list price) 85.71% 6 Expenditure cap ( i.e. restriction on $ reimbursed for a given time period) 0.00% 0 Utilization cap (i.e. restriction on the number of patients reimbursed) 0.00% 0 Other 14.29% 1 Total 7 44©2015 PDCI Market Access
  45. 45. 45 Outlook ©2015 PDCI Market Access
  46. 46. 46 Outlook Product Listing Agreements Pricing Cost Containment Trade PTR Appeal PMPRB $£€¥ Referencing Health ReformDelisting Downgrading Off label PLAs SEBs Rebates CTC PLR ©2015 PDCI Market Access
  47. 47. 47©2015 PDCI Market Access
  48. 48. Biography Arvind Mani Director, Market Access and Policy Research PDCI Market Access Inc Arvind.Mani@pdci.ca www.pdci.ca Arvind Mani is the Director of Market Access and Policy Research at PDCI. Arvind leads a team of consultants on pharmaceutical reimbursement (budget impact analyses), policy, and patent litigation projects. Arvind has more than 15 years of experience working in industry, associations and consulting. He provides expert knowledge to companies, governments on pharmaceutical pricing, regulatory, market access, and patent issues and is also responsible for contributing to pricing and reimbursement policy and analysis projects. Before joining PDCI, Arvind spent several years as the Director of Corporate Affairs at the National Association of Pharmacy Regulatory Authorities (NAPRA) in Ottawa. Prior to NAPRA, he worked for 8 years at Canada’s Research-Based Pharmaceutical Companies (Rx&D), an association that represents the interests of innovative pharmaceutical companies in Canada. Arvind held various positions at Rx&D, including Research Analyst, Director of Regulatory Affairs, and Director of Policy Development. Prior to joining Rx&D, Arvind was a Market Analyst with Ciba Geigy (now Novartis Pharmaceuticals Canada Inc.). PDCI Market Access (PDCI) is a leading pharmaceutical pricing and reimbursement (P&R) consultancy based in Ottawa and Toronto. Established in 1996, the firm features a senior team of multi-lingual market access professionals with extensive experience assisting clients navigate the complex P&R challenges facing Canadian pharmaceutical manufacturers. PDCI develops successful P&R strategies and prepares comprehensive submissions to CDR, pCODR, public & private payers and the PMPRB. The firm’s senior consultants facilitate meetings with CDR/payers/PMPRB, negotiate product listing agreements (PLAs) and resolve pricing compliance issues with the PMPRB. PDCI maintains databases of international pharmaceutical prices and provincial drug claims and costs. 48©2015 PDCI Market Access

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