Canada' s pharmaceutical market is the eighth largest globally, showing a 6%
growth in prescription drug sales in 2008. Much of the steady growth over the
last decade is attributed to the relatively high prices and moderate generic
penetration rates, both of which make the Canadian market attractive to
manufacturers of branded drugs. However, the proportion of patented drugs on
the market in Canada, currently at 65%, has consistently declined over the
last ten years as patents expire and generics and now follow-on biologics are
introduced into the market. Public payers are very budget conscious and are
negotiating confidential listing agreements with brand manufacturers and
imposing price cuts on generic drugs. Reviews of clinical and pharmacoeconomic
evidence undertaken by the Common Drug Review, Quebec' s Conseil du Medicament,
and the Joint Oncology Drug Review are important components of the market
access process for new brand name drugs. The pharmaceutical industry will have
to demonstrate cost-effectiveness and respond to payers' expectations for cost
sharing when they launch new drugs.
Questions Answered in This Report
The Patented Medicine Prices Review Board (PMPRB) has mandate, authority,
and jurisdiction over determining whether a patented drug price is excessive.
What are the factors that are considered by the PMPRB when reviewing new
drugs? What limits are imposed on price increases? What happens when a price
is deemed excessive?
Canada' s brand-name drug prices tend to be well below U.S. prices. For
many years, U.S. legislators have debated the issue of cross-border trade of
pharmaceuticals - that is, whether or not to allow U.S. citizens to purchase
prescription drugs from Canada. While factors such as the U.S. Medicare Drug
Benefit for seniors, a rising Canadian dollar, manufacturers' limits on
supplies to Canadian “Internet Pharmacies,” and expiring patents
have lessened the volume of cross-border sales, the issue is still being
debated in the United States. The latest legislation under consideration by
Congress is the Pharmaceutical Market Access and Drug Safety Act of 2009.
What implications would the U.S. legislation have on Canada' s prescription
drug market if it passes?
The extent of public reimbursement varies between provinces and private
insurance plans cover 37% of national prescription drug costs. What are the
major differences between the criteria used to determine coverage by private
insurers and public plans in Canada? How are these differences reflected to
industry players?
In April 2009, Omnitrope (somatropin), the first biosimilar (referred to
as “subsequent entry biologics” [SEBs]) was approved in Canada.
What is the process for SEB approvals? What agencies will make decisions
about pricing and reimbursement of SEBs?
Scope
Issues impacting the Canadian pharmaceutical industry: Drug
pricing, public and private reimbursement, cross-border trade, influence of
patented drugs/generics/SEBs on pricing and reimbursement, hospital drug
funding.
Pricing of prescription drugs: Comparing Canada' s drug prices with
other countries, recent developments at the PMPRB, pending changes to pricing
guidelines, new developments in provincial public pricing policies (e.g., drug
plans in Ontario and Quebec), pricing restrictions on generic drugs.
Reimbursement of prescription medicines: recent developments in
provincial reimbursement programs (e.g., Ontario' s Transparent Drug System Act
of 2006, Quebec' s Pharmaceutical Policy and Alberta' s Pharmaceutical
Strategy), update on the Common Drug Review (CDR) and Joint Oncology Drug
Review (JODR), recent developments in private drug plan reimbursement.
Outlook: Prospects for change in the Canadian pricing and
reimbursement landscape.
Mentioned in This Report
Processes/Rulings/Entities for Pricing and Reimbursement in Canada
Abbreviated New Drug Submission (ANDS)
Biologics and Genetic Therapies Directorate (BGTD)
Canada Health Act
Canadian Access Program for Drugs for Rare Diseases
Canadian Agency for Drugs and Technologies in Health (CADTH)
Canadian Expert Drug Advisory Committee (CEDAC)
Canadian Generic Pharmaceutical Association
Canadian Institute for Health Information (CIHI)
Committee to Evaluate Drugs (CED)
Common Drug Review (CDR)
Health Canada
Health Council of Canada
Health Technology Assessment (HTA)
Joint Oncology Drug Review (JODR)
National Pharmaceuticals Strategy (NPS)
Non-Insured Health Benefits Program (NIHB)
Notice of Compliance (NOC)
Organization for Economic Cooperation and
Development (OECD)
Patent Act
Patented Medicine Prices Review Board (PMPRB)
Regie de l' assurance maladie du Quebec (RAMQ; Quebec Health Insurance Authority)
Research-Based Pharmaceutical Companies (Rx&D)
The Advisory Committee on Pharmaceuticals (ACP)
Therapeutic Products Directorate (TPD)
Transparent Drug System Act of 2006
Voluntary Compliance Undertaking (VCU)
Table of Contents
Table of Contents
Executive Summary
Strategic Considerations
Stakeholder Implications
Introduction
Organization and Funding of the Canadian Healthcare System
The Canadian Pharmaceutical Market
Recent Developments in Canada' s Drug Approval Process
Pharmaceutical Pricing
Pricing of Prescription Medicines
Comprehensive Review of Excessive Price Guidelines
Categories
Price Tests
Any Market Review
Pricing Trends
Reimbursement of Prescription Medicines
Private Drug Plans
Provincial and Federal Government Reimbursement
Common Drug Review
Common Drug Review Process
Recent Changes
Cancer Drugs
Hospital Drugs
National Pharmaceutical Strategy
Outlook for the Canadian Pharmaceutical Market
Sidebar
1. Cross-Border Trade of Prescription Drugs
2. Controversy Surrounding the Reporting of Rebates
Tables
1. Source of Finance on Prescription Drugs Expenditure, 2005
2. Common Drug Review Final Recommendations, 2007, 2008, and 2009 (Q1-Q3)
Figures
1. Pharmaceutical Spending and Percentage of Total Healthcare Expenditures
in Canada
2. Matching Price Tests with Select Levels of Therapeutic Improvement
3. Annual Changes in Patented Drug Prices Compared with Consumer Prices,
1990-2008
4. Consumer Price Index Versus Patented Drug Prices, 1989-2008
5. Percentage of Drug Prices in Select Countries Compared with Canada,
1987-2008
Pharmaceutical Pricing and Reimbursement in Canada published by Decision Resources, Inc. in December 3, 2009. This report consists of 27 Pages and the price starts from US $ 4600.
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