Canada

Canada’s publicly funded healthcare system is often considered to be a source of national pride. While Canadians benefit from near-universal coverage of physician and hospital services, they are often left to pay out-of-pocket or rely on private insurance for prescription drugs dispensed outside of the hospital setting. Because regulations are divided between federal, provincial and territorial levels, disparities between public drug plans and unequal access to marketed products are major criticisms of this framework.

In addition to the tremendous repercussions for Canadians in terms of access and affordability, drug manufacturers are also faced with the significant challenge of navigating the complex and fragmented approval processes of multiple independent bodies for the pricing and reimbursement of pharmaceuticals. However, manufacturers equipped to manage this complex environment will find a competitive and attractive business landscape.

Canada’s Payer Stakeholders

• The Patented Medicines Prices Review Board (PMPRB) is the body responsible for regulating prices of all patented prescription and non-prescription drugs sold in Canada.
• The Canadian Agency for Drugs and Technologies in Health (CADTH) is an independent agency funded by federal, provincial and territorial governments. CADTH is a health technology assessment (HTA) agency that houses services including the Common Drug Review (CDR) and the Pan Canadian Oncology Drug Review (PCODR).
• CDR provides evidence-based clinical and economic information and expert advice to participating public drug plans (federal, territorial and all provinces except Quebec). While Ontario participates in CDR, certain products may also qualify for their own independent Rapid Review Process. With over 60 percent of the Canadian population living in Quebec and Ontario these provinces are incredibly important.
  • Conseil du medicament is Quebec’s influential HTA body.  It recommends drugs to be listed on the Quebec provincial formulary. Final decisions are made by Quebec’s Minister of Health. The formulary is published three times per year.
  • The Ontario Ministry of Health’s Rapid Review Process applies when a new product will fill a significant unmet medical need, or the listing will result in significant savings for the province.  A unique aspect of the Ontario Rapid Review Process is that submissions can be made before the receipt of Health Canada Notice of Compliance (NOC) authorizing the drug for sale within Canada.

Important Points to Keep in Mind

Health Canada is the federal health department responsible for approving new drugs. Health Canada releases a formal marketing and distribution authorization called Notice of Compliance or NOC following the satisfactory review of a new product submission.

Pricing and reimbursement are two separate considerations.

Pricing

Pricing approval for patented medicines is regulated by the federal government through PMPRB. While manufacturers are free to set the prices for their products in theory, the prices of patented medicines are monitored by PMPRB to ensure that prices are not “excessive”. The PMPRB assesses drug prices in accordance with the level of therapeutic innovation:

• Breakthrough – first to treat a particular illness effectively or address a particular indication effectively
• Substantial Improvement
• Moderate Improvement
• Slight/no improvement and line extensions

The prices of “breakthrough” drugs are pegged to the median ex-factory price for the same drug in reference countries. Pricing of other new patented drugs is managed via therapeutic price referencing.  Prices are limited so that the cost of the therapy is in the same range as other patented drugs already on sale in Canada. Prices can never exceed the highest referenced price or increase by more than the consumer price index (CPI).

Reimbursement

Reimbursement prices are not set by the PMPRB nor does it enter into pricing arrangements with manufacturers. The reimbursement process is governed by a combination of federal, provincial and private drug plans. The result is that reimbursement criteria and prices can vary considerably between plans.

Manufacturers should evaluate the potential of accelerated market access via the Ontario Rapid Review Process. A positive decision can shortlist a drug on the formulary and serve as a positive reference to build momentum for the rest of Canada.

Private payers may cover all Health Canada approved drugs, establish their own formularies, or follow the public drug plan in their provinces. In Quebec, private insurers are required to cover at least all drugs listed in the provincial formulary. Many private drug plans ask for submission dossiers and specific requirements vary by plan.

Hospitals maintain their own formularies through Pharmaceuticals and Therapeutics Committees.  Dossiers must be submitted to individual hospitals or hospital consortia.

Product listing agreements (PLA) tailored for unique product characteristics and payer concerns can help accelerate market access. These may be an option for overcoming negative CDR recommendations.

Implications for Industry

Due to the increased conversation around drug pricing, including price disparities between countries, there is pressure on manufacturers to maintain high list prices across a number of countries including Canada. Clinical trial data demonstrating successful outcomes and the unique health and economic value of a product can be used to convince highly skeptical HTA bodies in Canada and gain reimbursement at target price. Being well versed in the science and adept at communicating the story of your therapeutic value are necessary skills for achieving access in Canada.

The Canadian drug evaluation and reimbursement system has a high rejection rate. With more than 30 percent of the Canadian population directly affected by the CDR recommendations, a flexible and well thought out market access program is a must. There is more than one way to approach market access in Canada, and GLOBALHealthPR’s experienced team is adept at evaluating all available options to derive a strategy that can vastly increase the chances of success for a manufacturer.