This article originally appeared on Benefits Canada on June 30, 2022.
The amendments to the Patented Medicine Prices Review Board regulations are officially taking effect July 1, after being delayed multiple times.
The changes, which were originally proposed in 2019, are the first significant update to the regulations in more than 30 years. After consulting with stakeholders, Health Canada will be moving forward with the implementation of the new basket of comparator countries and reduced reporting requirements for those medicines at lowest risk of excessive pricing.
“We’ll be comparing [pricing] to countries that are like-minded in terms of the ceiling with which we set those prices, so it will be more reflective of the value to Canadian consumers and more affordable,” says Theresa Tran, principal of health and group benefits at Eckler Ltd. “They ended up removing the U.S. from the [basket], which is pretty significant because it allows for more reasonable pricing . . . and ultimately that trickles down to employers and drug plans.”
Pamela Fralick, president of Innovative Medicines Canada, says while Canada has always prided itself on being in the top tier of Organisation for Economic Co-operation and Development countries, changes to the basket of comparator countries could impact that standing. “We keep asking ourselves, ‘Why would we target the median and bring us down a few pegs in terms of how we value pharmaceuticals?’ So we just want to remind the government it’s not quite as simple as ‘bigger basket [equals] lower prices.’ ”
She also questions whether existing drugs will be grandfathered in at their current prices or be renegotiated under the new regime. “With new products, there should be a business plan and clear expectations. If not, it will impact the whole industry as well as access, patient health and pricing. . . . We want to make Canada competitive for the best products that will keep citizens healthy and this requires a balanced approach, more than the government has been able to do.”
As more high-cost drugs become available, employers must decide whether they’ll continue to have an open plan or consider limiting these drugs that may offer a good therapeutic value to their members, says Tran. “I think it becomes very challenging [for plan sponsors] to balance that within their plan and ensure [the plan] is sustainable for years to come.”
According to a report by Eckler, the approval of new drugs is trending slightly upwards, with an average of 45 new medicines approved each year from 2015 to 2020.
“The availability of new drugs is always a benefit to the consumer market, but the question among plan sponsors and employees becomes, ‘What’s an expensive drug?’” says Tran. “In the private plan space, there’s a general guide — let’s say anything over $10,000 is considered a threshold for expensive drugs. So when new drugs are coming out way above that threshold, how does it become affordable and something that can be covered under a private plan and sustainable within the plan?”