PMPRB report shows increased plan costs, promising pharmaceutical innovation: expert

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This article originally appeared in the Benefits Canada on September 20, 2023.

A recent report by the Patented Medicine Prices Review Board shows increased growth for private drug plan costs but promising pharmaceutical innovation, says Joe Farago, executive director of private payers and investment at Innovative Medicines Canada.

The report also found the number of new medicines launched in Canada was higher than the median for Organisation for Economic Co-operation and Development countries, but fell below the median of the 11 PMPRB comparators, all of which have lower average patented medicine prices.

“When it comes to private drug plans, [our] data shows there has been consistent growth in private drug plan costs since 2015, with a five-year annual growth rate of 5.4 per cent from 2015 to 2020,” says Farago. “This growth in private drug plan costs is primarily driven by utilization — more people making more claims— and chronic disease. Specialized drugs for chronic disease often come with higher costs, potentially impacting smaller plan sponsors.”

Read: High-cost medicines driving drug costs for public, private plans: report

To address possible challenges associated with higher-cost claims for smaller employers, he suggests Canadian private drug plans explore opportunities to improve risk management. “One effective solution would be to adopt the Quebec pooling model in the rest of Canada. This approach

has shown significant benefits, including significantly reduced volatility and greater protection against high-cost claims for plan sponsors.”

In 2021, a five-year high of 55 medicines received first-time market approval through the U.S. Food and Drug Administration, the European Medicines Agency and/or Health Canada, according to the report. Among these medicines, three-quarters had high treatment costs, 42 per cent received an orphan designation from the FDA and/or the EMA and 27 per cent were oncology treatments.

“It’s an incredibly exciting time in pharmaceutical innovation,” says Farago. “New, cutting-edge treatments such as those to treat rare diseases or specific types of cancer have an extremely positive impact on patients’ lives. We’re now seeing more and more drugs become available to treat conditions where, until very recently, there were no treatment options or very limited options for patients.”


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