Canada Grapples With Drug Price Escalation

On July 1, 2020, Canada will tighten up its regulations for the pricing of patented drugs with a series of changes that, among other things, drop 2 countries with among the highest drug prices, the United States and Switzerland, from the list of those whose drug prices can be used as comparators.

Canada will also allow the country’s Patented Medicines Prices Review Board to incorporate 3 new considerations into drug pricing decisions: pharmacoeconomic value, market size, and gross domestic product (GDP) in Canada. These will allow the country to weigh the price of a medicine in relation to how it affects the health care system and its value to patients, proponents say.

In a discussion at Virtual ISPOR 2020, the annual meeting of the International Society for Pharmacoeconomics and Outcomes Research, panelists reflected on these changes and other efforts to improve access and affordability to drugs for Canadian residents.

Seemingly Inexorable Rise of Prices

Like the United States, Canada is grappling with the seemingly inexorable rise of drug prices, largely the result of a steady procession of new specialty medicines for which there may not be comparable medicines available at lower cost. In addition to unsustainable prices, drugs are being approved with lower levels of evidence, creating uncertainty about their value across the spectrum of payers, patients, and clinicians, ISPOR panelists said.

“Gene and cell therapies, immunotherapies, and other cancer drugs, and even expensive drugs now used to treat more common diseases are just some of the new blockbusters that are promising to improve health outcomes, but they’re also contributing to the affordability crisis that we’re experiencing,” said Mitch Moneo, moderator and a member of the Therapeutics Initiative Oversight Committee in British Columbia.

The pending regulatory changes have given rise to concerns that drug innovation will be stifled and manufacturers may not want to launch in Canada. This is not the case, said Tanya Potashnik, MA, director of the Policy & Economic Analysis Branch of the Patented Medicines Price Review Board.

“We’ve been looking at this issue quite extensively, and we have provided evidence that, in fact, there are many countries that have lower prices than Canada, but yet outperform Canada with respect to the number of substances that are launched in those countries,” she said.

According to an analysis by her office, “price in and of itself is a weak determinant of whether a manufacturer decides to launch in a country.” Market size, the wealth of a country, and how much is spent on drugs are stronger determinants, she said.

Gauging the Impact of Regulatory Changes

Efforts were also made to find out whether the pre-announcement of these regulatory changes had produced any effect on product launches or the number of clinical trials in the country, and again the answer was negative, Potashnik said. “We’re not seeing any evidence that there have been any negative implications.”

But that doesn’t rule out a follow-up analysis, which will be carried out, she said. “The next focus will be to make sure that we have an evaluation that allows for a comprehensive assessment of the impact of these changes on various aspects of the Canadian ecosystem.”

Other countries also are starting to use pharmacoeconomic value, market size, and GDP to weigh the prices of new drugs in terms of value and affordability, she said.

“When you look at expensive drugs for rare diseases, it is a group of drugs that has been growing at a compounded annual average rate of about 30% over the last 5 years and now accounts for close to 10% of overall sales. So, Canada, like other countries, is finding ways to assess what would be an appropriate price tag for these,” Potashnik said.

A perspective on new drugs and pricing in Canada also was provided by Brent Fraser, BSc, MBA, vice president of Pharmaceutical Reviews for the Canadian Agency for Drugs and Technologies in Health (CADTH), which among other things provides recommendations on coverage for payers.

“The pipelines that we’re seeing with the new drugs coming forward are very robust. This does have some challenges—the fact that the volume of submissions that we’re receiving from manufacturers has been increasing year over year,” he said.

“There is a significant demand to get access to medications earlier,” he added.

Health Canada, an agency within the Canadian government that sets health policy, “is approving some drugs faster than what we’ve seen in the past and often misses on more immature-type data, and as a result it makes the health technology assessment work a bit more challenging.”

There is also a medicine affordability crisis in Canada that is forcing CADTH to move beyond health technology assessments to an intervention role. “We trying to identify those technologies that are most disruptive and for which there is the greatest need for access, and hopefully we can do some work during the regulatory phase so that there isn’t a delay in the recommendations” concerning these agents.

Fraser said CADTH is also talking more to physicians and patients to gauge the need for newer drugs and assess their potential to help patients better than existing medicines. “We're also looking at developing more evidence-informed implementation advice for the payers,” he said.

Visit the conference page for more from Virtual ISPOR 2020.