PMPRB Submission – Executive Summary

Executive Summary
Innovative Medicines Canada appreciates the opportunity to engage as part of the Patented Medicine Prices Review Board’s (PMPRB) public consultation regarding possible reform to its Compendium of Policies, Guidelines and Procedures. The PMPRB has laid out a broad-based consultation document to modernize and simplify its regulatory framework in order to remain relevant in a “dynamic and evolving pharmaceutical market.” While the Discussion Paper implies greater regulatory intervention is required, it is ambiguous about which specific policy failures or specific issues that the PMPRB hopes to resolve.

Access to medicines and vaccines is a key component to a quality health system. For this reason, virtually all stakeholders agree that Canadians should have the best possible access to medicines. The role of the PMPRB can only be reviewed in the full view of the complex, varied and evolving Canadian health and pharmaceutical pricing and reimbursement system, so that the federal price regulatory regime complements and supports the rest of the health system.

The role and function of the PMPRB is strongly linked to Canada’s patent regime and the elimination of domestic compulsory licensing. When Parliament created the PMPRB, it was not intended to leverage Canadian prices downward for consumers or payers, but to ensure patentees could not abuse their market positions by charging excess prices. The changes that led to the creation of PMPRB were bold, optimistic and visionary. There were dramatic health and industrial policy objectives and the changes resulted in significant improvements in both the health research enterprise in Canada and the availability of innovative medicines for Canadians and the resulting improvements in health outcomes.

At that time, PMPRB was the only mechanism that provided Canadians an assessment of the “reasonableness” of the price of a patented medicine in Canada. Since then, many tools, mechanisms and agencies have been established to refine and enhance payers’ understanding of the value of medicines in the Canadian market. Today, the prices of patented medicines in Canada remain below the median of the prices in the PMPRB comparator countries (France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the USA).

PMPRB has indicated it will focus its activities on addressing affordability and value for money. While it is clear that the sustainability of Canada’s healthcare system and the management of healthcare budgets is a priority for Canadians and policy makers, introducing affordability as a new concept into the PMPRB’s assessment of non-excessive prices is problematic.

Innovative Medicines Canada does not believe that the PMPRB is the appropriate agency to decide upon the affordability of medicines in Canada. The PMPRB is not accountable for spending decisions, does not select drugs for reimbursement, does not pay for medicines, and does not have visibility into drug and health budgets. Other agencies and jurisdictions within the current environment are charged with these roles, and better placed to work with and/or negotiate with the industry to answer these questions.

Since the creation of the PMPRB, the overall operating environment affecting pricing and access decisions for patented medicine manufacturers has changed dramatically. While the PMPRB plays the discrete role of determining a ceiling pricing for a patented medicine, several other agencies and processes have been established and expanded over the last two decades to assist governments to make funding decisions, particularly the evolution of Health Technology Assessments and the introduction and expansion of product listing agreements and joint negotiations.

Innovative Medicines Canada strongly suggests that PMPRB should not overlap the functions of CADTH/INESSS, or pCPA through a change to its price oversight or reporting function. We caution against creating mechanisms that would duplicate or overlap with the ongoing work of processes that support the assessment of value of money for patented drugs.

In making reimbursement decisions, all governments recognize the importance of providing additional help to citizens who need it the most, including those on social assistance and seniors. Innovative Medicines Canada strongly believes that the current system of differential pricing, which preferentially benefits public payers as custodians of those individuals they have deemed to be society’s most vulnerable, is fully aligned with Canada’s social contract, which supports preferential targeting of resources to protect against an inability to pay. At the same time, privately funded drug plans have the tools at their disposal to assess value, negotiate reimbursement terms and ensure drug plan sustainability within their own parameters and the objectives of their clients.

Expenditures on patented medicines are not disproportionately contributing to the growth in health system spending, and in fact contribute to savings downstream. However, even though the vast majority of Canadians are covered under a public or private drug plan, some Canadians struggle with affordability because they have inadequate levels of drug coverage.

The challenge today is to recognize the common objectives of all parties — patients, healthcare professionals, policy makers, payers, administrators, and industry — and find ways to build solutions that reflect the unique properties of the Canadian system and provide the best possible access to new medicines for Canadians.

A similar challenge exists when it comes to our members’ economic presence in Canada. The ambitious policy change that expanded patent protection and saw the creation of the PMPRB resulted in substantial expansion of both the economic footprint of innovative companies and the health research enterprise in Canada. There is no doubt, however, that there have been substantial and profound changes to the business and regulatory environments in Canada and globally. Innovative Medicines Canada and its members remain committed to exploring ways with governments, health research institutes, biotechnology companies and researchers to expand our R&D and investment footprint in Canada in the coming years and into the future.

In making any reform to the pricing and reimbursement system, we should remember that Canada is a wealthy G7 country with a high quality healthcare system. We should be building a system that makes available the widest array of heath technology choices and provides optimal access to the most appropriate choices for individuals. It is true that technological advances require tough choices to be made, but we are much better off for the progress that science has produced.

Innovative medicines are increasingly viewed solely as a cost driver. While the clinical value of our medicines is often acknowledged, the systems being established to pay for medicines are treating medicines as a commodity as opposed to an investment. We are approaching a point where the incremental evolution of the pharmaceutical reimbursement landscape will no longer yield the best health or economic outcomes for Canada.

While recognizing fiscal constraints, we should collectively aspire to more ambitious goals. We should aspire to create a marketplace that encourages market entry of novel medicines. This approach will benefit both payers and patients. Payers will benefit from greater levels of competition, and patients will benefit from having more options available to them and their health care practitioners.

Innovative Medicines Canada is prepared to work with governments in Canada to build a predictable, stable and sustainable role for the innovative pharmaceutical industry and ensuring Canadians continue to get value from their expenditures. In particular, we are keen to engage with public and private payers, Health Canada, CADTH and INESSS to help evolve the drug review mechanisms to address issues of clinical value and value for money, with the objective of improving timely and affordable access of innovative medicines to Canadians.

Innovative Medicines Canada and its member companies believe that all Canadians should have access to the medicines they need, without affordability as a barrier. We are committed to working as a strategic partner with government and other stakeholders to reach this objective and bring forward solutions to address the gaps in the system. However, we do not believe that changing the PMPRB Guidelines to reduce pricing thresholds for patented medicines will solve the problem of individuals facing affordability challenges due to lack of or insufficient drug coverage in Canada. Solving this problem will require innovative collaboration between the federal, provincial and territorial governments, the pharmaceutical industry, and private insurers.

Read the full submission.