Opportunities or Challenges: Need for Transparent Consultation and Reality-Based Thinking on Canadian Drug Pricing and Access to Innovation; How to Make PMPRB Guidelines, HTA, and National Pharmacare Work for Patients Neil Palmer, PDCI Market Access Inc

1. National Pharmacare: Budget “Estimates”
§ Parliamentary Budget Officer (2017) $19.3B
Ø Based on Quebec plan; generous assumptions
§ Canadian Health Policy Institute (2018) $26.2B
Ø Based on Quebec plan; more realistic assumptions
§ Advisory Council on the Implementation of National
Pharmacare (2019) $40B
Ø “Carefully chosen list of priority essential medicines” (2022)
Ø WHO’s Model List of 450 Essential Medicines or 125 primary
care drug list developed by Toronto clinicians
Ø List should expand, but not until January 2027
§ Canadian Taxpayers Federation (2019) $48.3-$52.5B

2. National Pharmacare: Political Party Election
“Promises” 2019
§ Conservatives
Ø Increase Canada Health Transfer
§ Greens $26.7B
§ New Democrats $10B
Ø Also for mental health, eye and dental care
§ Liberals $6B
Ø Down payment, also for mental health, home and
palliative care

3. Patented Medicine Prices Review Board
(PMPRB) Reforms – What Next?
CORD Conference
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November 19th, 2019

4. What are the changes?
• New basket of international price reference
countries
• New economic factors
– Pharmacoeconomic value
– Market size assessment
– Canadian GDP and Canadian GDP/capita
• All third-party rebates must be reported to
PMPRB
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* Details on following slides

5. “FACTS” from PMPRB and Health Canada
THESE AMENDMENTS WILL NOT:
• Reduce or delay access to new innovative medicines – in fact, several counties
with lower prices have faster access to new medicines than Canada;
• Adversely impact the levels of R&D investment in Canada – Canada’s peer
countries receive far greater levels of investment despite considerably lower
medicine pricing.
CANADA IS A HIGHLY PROFITABLE MARKET FOR PHARMACEUTICAL SALES AND WILL
REMAIN SO.
• These changes are similar to or drawn directly from those already in place in other
countries, including those with large pharmaceutical industries.
• Overall spending on patented medicines is expected to continue to rise, even as
prices drop.
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7. REGULATION AMENDMENTS: Expected Price Impacts
• MIPC of PMPRB11 applied to introductory price
– Estimated average 20% in list price reduction vs. current PMPRB7
– Impact on net revenues depends on level of PLA discounts, proportion
of private sales
• How will pharmacoeconomic value be used to set price?
– Will CBA thresholds be applied?
• $ 35K/QALY – high prevalence, high-priority
• $ 50K/QALY – most high-priority
• $ 150K/QALY – high-priority drugs for rare diseases
• CBA references 40% reduction on average, with a cap of 50%
reduction
– Will this be true in practice?
– Does it include reductions based on MIPC11, or is it additive?
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8. What are the issues with the proposal?
• Policy-making in the absence of data to define problem
• Reduced, delayed or denied patient access to medicines
• Wide discretion on implementation shifted to PMPRB
– Reliance of highly variable assumptions in economic models
• Potential for increased costs to public payers
• US State proposals for wholesale importation of Canadian meds
• Legal challenges
• Guidelines / implementation/consultation
– Will draft Guidelines reflect stakeholder input?
– Who will sit on the Technical Working Group?
– Can an effective consultation be completed in the proposed timeframe?
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UNCERTAINTY!