Panel 4: Pan-Canadian Pharmaceutical Alliance
Panel Description: This panel will focus on recent events surrounding the pCPA and how public payers believe that PMPRB reform may impact upcoming pCPA negotiations.
Moderator: Sherry O’Quinn
Panelists: Imran Ali, Jessica Arias and Heather McDonald
Sherry O’Quinn: Our focus is on recent events around the pCPA and the pharmaceutical landscape. A lot of this discussion is framed around healthcare sustainability. Here to take on this task are three panelists providing the pCPA perspective, the payer perspective and industry perspective. In preparation for this panel, we discussed the themes that this panel would cover including the evolution of the entire market access pathway. the main question that comes out related to this theme is how these changes interconnect with the pCPA? There is currently a lack of predictability in the Canadian market. We also want to take a look at the opportunities that these changes will present.
To start off myself and Suzanne McGurn had an opportunity to be at the IMC meeting and lay out our priorities including transparency, measurement, sorting, engagement and capacity. We are looking at transparency in terms of how we work. The process guidelines should move towards addressing that.
Measurement refers to how well we work, including timelines and other metrics. Sorting, since we know not all drugs are the same. We stay away from the word prioritization, but sorting refers to different processes for different drugs. Engagement includes how we work with different stakeholders. Finally, capacity, so how can our workflow evolve?
The pCPA team is myself and the Office, so ten people. This also includes the public drug plans which is sixty to seventy people who are directly involved. Important milestones include the creation of pCPA in 2010, and the IBM report in 2014 which included the recommendation to create the Office. Shortly after the pCPA Office was launched, Quebec and the federal plans joined as well. The end product of the pCPA process is LOIs, and 198 have been reached to date.
Objectives & Brand Process Guidelines
Objectives include increasing access, reducing duplication, achieving consistent and lower drug costs and improving consistency of decisions. Given that provinces vary, all decisions will not necessarily be identical. The core piece of the process guidelines shows what the process currently looks like with 4 main phases.
Pre pCPA is the HTA stage and phase 1 is initiation. The pCPA office would begin the second phase with the jurisdictions, and this is where the ‘black box’ exists the most and that we are addressing. From there they move into active negotiations (phase 3) and finally phase 4 is identified as completion.
So where are we right now? 198 LOIs have been completed, 30 have been closed, 70 were not pursued and 13 decided to individually negotiate. With $1.28 billion in combined savings annually, with $925 million for brand.
What are in these contracts? The items listed here are not mutually exclusive. First dollar rebates or volume based tiered rebates are the most common or patient/dose/treatment caps. Others which are less common are transparent price reductions, hard or category caps, free goods, grants and outcome or performance-based agreements. We have some of those in place but that is a large topic in itself.
Right now, we have 32 products in pCPA consideration and 42 in active negotiation as of May 31, 2018. From HTA recommendation to LOI it took approximately 10 months and those where the agreement was not reached the median was 8 months. Those in active negotiation are at 10 months and those in consideration have been under consideration for approximately 3.5 months.
Biosimilar Principles & Governance
Biosimilars first principles were released in April 2016. There was a consultation with industry last year with a wide range of feedback. We are working with other parts of the system including CADTH and Health Canada to better define that negotiating environment.
On governance, the pCPA has been around since 2010 but a significant portion of the negotiation activity has happened in the past two years. The implementation of formalized governance of the pCPA has been very helpful. Currently, the chair is Ontario and the vice chair is British Columbia. The governing council involves ADMs or equivalents from all jurisdictions.
Challenges and Opportunities
Some things fall into challenges and opportunities, for example, 10 months is not ideal for timelines. You may have noticed we have put some new targets in and we want to get down to 6 months. We see outcome-based agreements are both a challenge and opportunity. There are also challenges with specific types of drugs such as drugs for rare diseases or biosimilars. Another example are the time limited funding recommendations from pCODR; this is something new our process needs to consider.
I am a manager with provincial drug reimbursement programs at Cancer Care Ontario. Since joining CCO, I’ve seen significant changes including the transition of pCODR into CADTH, the creation of the pCPA Office, the development of the Cancer Drug Implementation Advisory Committee (CDIAC) and the PMPRB modernization. When it comes to driving sustainability in drug funding, we must balance financial obligations with treatment expectations while maximizing equity and quality of care under a constrained budget. So how do we ensure patients get what matters to them?
The average annual growth rate has been 11% which resulted in a doubling of expenditure from fiscal year 11/12 to 17/18. Not only are we dealing with increased cost, we are also dealing with increased uncertainty. Few new drugs demonstrate clinical benefits, and when there are positive impacts, the gains are unevenly distributed across disease states. Of the drugs analyzed by Salas-Vega (JAMA, 2017), Ontario funds a certain proportion; and while there are modest to no benefits with these drugs, the associated annual expenditures have been substantial.
Managing Costs & Uncertainty
Some new drugs offer benefits, and, in some cases, we simply don’t know. There is no relationship between the list price and the benefit of the cancer drug. So, what can we do? At Cancer Care Ontario we are supporting efforts to manage prices, reduce cost and assess value in the real-world. We are asking ourselves, “are we getting benefits from the drugs we fund”.
Additionally, the PMPRB is modernizing their regulations to manage excessive pricing. We are supportive of this work and do recognize the challenges associated with it. We would like to 1) make sure that new processes do not result in delays to access; 2) understand the role of the pCPA amidst the changes; and 3) see that transparency around pricing does not impact negotiation leverage.
In terms of reducing costs, we are working on a strategy to encourage biosimilar uptake such as modifying drug funding phases, increasing awareness and comfort with biosimilars, ensuring quality and safety when it comes to things like prescribing, labeling, administering, and monitoring uptake and safety. Additionally, we need to introduce strategies such as real-world evidence (RWE) analysis and address the challenges associated with this work like data integration, sufficient resourcing, and establishing a framework that promotes the use of the data for decision-making.
While value-based pricing has a nice ring to it, we need to consider the challenges as well, which are similar to those related to RWE analysis. How do we appropriately share risk? We cannot bypass the standards for HTA, but we need to address situations where the evidence does not exist.
In summary, system sustainability is challenged by new high-cost therapies coming to market; affordability is as important as clinical- and cost-effectiveness; flexibility is needed when it comes to areas where there is little to no evidence; and post-market evaluation is needed to verify that the value and benefit expected is seen. We need to explore the partnerships that will help us overcome the challenges to improve access to new high-cost therapies while promoting sustainability.
As a manufacturer this is an important topic, so I appreciate the opportunity to speak on a panel with other individuals who are a part of the ecosystem. Bayer is one of the earliest manufacturers to be involved with the pCPA. In terms of the outcomes of those agreements; our experience ranges from negotiations with completed LOIs to situations where it was not possible to reach an agreement. Bayer is also actively involved in the PMPRB modernization consultations.
Some key assumptions: we know PMPRB is proposing to change the basket of countries, to introduce new factors to set prices and that price rebates be reported back to PMPRB. Implementation of all of these proposals are generally estimated to have a 20-30% impact on list prices.
Challenge 1: List Prices & Negotiation Table
In terms of reporting agreements back to PMPRB, I have a number of questions. What would the reporting of rebates to the PMPRB mean for list prices moving forward, how will this be implemented and how will PMPRB use this information? The ultimate challenge is how will this shape the negotiation table? How will market behaviors challenge launch decisions and negotiations? As a local affiliate, the reporting of negotiated agreements into PMPRB may constrain my ability to sit at a pCPA table and, if I am able to negotiate, the negotiation options I have may be constrained.
Challenge 2: The Business Case
The second challenge relates to the business case. If the list prices drop by 20 to 30 percent as a result of PMPRB reform, then what type of net discounts will I be asked to give at the pCPA table? Will the pCPA participants still expect the same % discounts that have been requested from manufacturers to date? At the end of the day I only have so many marbles, if I am constrained at the outset then I have fewer marbles to negotiate with, and it may become much harder to reach negotiated agreements with the pCPA.
Challenge 3: The Ecosystem & Collective Objectives
In the payer, patient, and industry ecosystem we all have different starting points, but we have a collective goal of serving the patients. However, if the PMPRB reforms proceed as proposed and if the pCPA expectations for negotiated agreements remain, then we may be moving toward a system where fewer products are launched or where fewer products reach a negotiated agreement (and therefore get listed) in Canada. This, in effect, is a movement away from the collective goal of serving the patient. Therefore, we need to be deliberate in discussing the unintended consequences of policy reforms.
Although PMPRB reform poses multiple challenges in the context of pCPA negotiations, there may be opportunities as well.
First, do we need to negotiate on every drug? If list prices end up being reduced, then the gap between list prices and the prices that payers consider to be affordable should be smaller, if it even exists at all. Therefore, some or even many products may not need to go to pCPA but can instead move directly into provincial listings. Second, even if there is a need to negotiate, there is an opportunity for the negotiation to take less time given the gap between list and expected net should be smaller. Finally, this may represent an opportunity for us to collectively shift towards value-based negotiations. Can we kick down the door on this concept, and move towards negotiating on value? We need to collectively work together to set an aspirational vision on this. We need to set ourselves up for success in the interim. We need public-private partnerships for how to set Canada up for success in pay for performance agreements.
In addition to the impact of PMPRB reform on pCPA, we are also trying to navigate various other changes in the health policy ecosystem. At Bayer we aim to develop innovative medicines and aim to have patients access them in a timely manner. As we see policy changes coming, it is important to discuss what the impact of all of these changes may be on our collective goals. There are opportunities to shift the paradigm.