Conclusions

1. Canada Submitting for a CND market price for a new drug vs submitting for reimbursement Jim Smyth, Manager Corporate Affairs Introduction Establishing the maximum allowable CND market price for a new pharmaceutical is independent from obtaining reimbursement. Objective To differentiate between obtaining a price for a new drug and the steps involved in submitting to payers for reimbursement • DRUG PRICING IN CANADA • The Canadian government established the Patented Medicines Price Review Board to control national drug prices and establish a maximum allowable CND selling price for patented medicines. The PMPRB utilizes both local and international drug price comparators determine if a CND drug price is excessive. If PMBRB assesses a drug price as excessive, the manufacturer is compelled by law to reduce their price and refund any excess revenue. Establishing a ‘non excessive drug price’ for a new drug does not mean that CND payers will assess the drug as cost effective or reimburse it. • DRUG REIMBURSEMENT IN CANADA • Although there is not a single national drug program, most Canadians have some form of public or private drug plan coverage. • In 2003, the federal, provincial and territorial (F/P/T) drug plans established the Common Drug Review (CDR) through the Canadian Agency for Drugs and Technology in Health to conduct systematic reviews of the clinical evidence and pharmacoeconomic information for new drugs and to provide detailed recommendations for their reimbursement. The province of Quebec and private drug plans do not participate in CDR and conduct their own drug evaluations and make their reimbursement decisions independently. Although 19 government drug plans participate in the CDR review process, they and are not bound to follow CDR recommendations and make their funding decisions independently. CDR / Provincial Listing Decisions 2003 to 2006 Only 46% of the CDR Recommendations were positive ‘to list’. • Description of the necessary steps to submit to PMPRB for price • Manufacturers submit to PMPRB at time of first sale with the rationale to support the CND market price that is being sought. • Manufactures must also continue to submit every six months local and international comparators and their average transaction price. • PMPRB only notify manufacturers of their ruling once the conditions are met to apply their price tests. This can take several months and is often after the product has been launched. • Description of the necessary steps to submit for reimbursement in Canada payers • To obtain reimbursement through government drug plans, a submission to the Common Drug Review (CDR) is required for all NCEs. A submission to the province of Quebec is made separately. • CDR HE requirements outline for a drug that is first to treat a disorder or disease or that establishes a new therapeutic class the HE-analysis should consist of the following: http://www.cadth.ca/media/cdr/process/CDR%20Submission%20Guidelines%20July%202007_final.pdf • - cost-utility analysis/cost- effectiveness analysis • - preferred outcome: cost per additional QALY/ cost per LYG • - comparator required: standard or current care • After the CDR review (94-124 days) is complete, their recommendation is sent to participating drug plans and the manufacturer. CDR also posts its recommendation on its web site. F/P/T drug plans review the recommendation and make their decisions. A major focus of their decisions is their assessment of ‘value for money’ of a new drug in comparison to the cost of the drugs they are currently reimbursing. • Submissions to private drug plans are made separately to 35 – 40 different insurance companies who administer private payer plans in Canada. Private payers do not have specific HE submission requirements. They are interested in information focusing the impact of drug therapy on abscenteeism, long term disability costs and productivity (‘presenteeism’) from an employer perspective. Their focus is budget impact and typically look at the cost of a new drug in terms of its financial impact per 100,000 insured lives. The time for listing of new drugs in private drug benefits plans can range from a month (for open plans) to several months for managed plans which conduct their own review and assessment. Conclusions PMPRB guidelines set the ‘price ceiling’ for the CND market price for a drug. Although it is critical to ensure the CND price for new drug is within the guidelines, it does not ensure reimbursement through public drug plans. The optimal price for a new drug would be one that falls within PMPRB guidelines, supports the case for the drug’s cost-effectiveness and demonstrates to payers ‘value for money’ in comparison to the current drugs they are reimbursing. For success in obtaining reimbursement through public drug plans, when setting the CND price for a new drug manufacturers must consider the prices of drug comparators that payers will reference when they assess the value of a new drug in comparison to those drugs they are currently reimbursing (least costly and most frequently prescribed). Reimbursement decisions are made independently by several payers, both public and private. There is limited opportunity to negotiate the reimbursement price for a new drug due to the number of payers and the risk of reducing the overall national price for a drug (public and private). Submitting a new drug to the CDR is the first step in obtaining reimbursement through government funded drug plans. CDR is focused on the clinical and health economic value of new medicines and have specific HE criteria for submissions. Although government drug plans are not bound to follow CDR recommendations, they seldom reimburse a new drug which has not received a positive CDR recommendation.