With a number of government reforms and new policies in the works, plan sponsors may well wonder about the potential impact on private drug plans. With that in mind, Suzanne Lepage, a private health plan strategist, led a panel discussion on new government policies and programs in the works at the Face to Face Drug Plan Management forum that took place in Vancouver this month.
Reform of the Patented Medicine Prices Review Board: The review board is in the midst of modernizing its pricing framework for patented drugs as a result of amendments proposed by the federal government and the changing nature of the pharmaceutical environment in Canada. At this month’s event in Vancouver, panellists discussed the continued relevancy of the pricing regulator, the usefulness of comparing drug prices in other countries and the impact of including pharmacogenomics in setting them.
Ben Peacock, director of pricing, contracting and private payers at Amgen Canada Inc., noted that the review board has been static for 30 years while the world has changed around it. Both the Canadian Agency for Drugs and Technologies in Health and its Quebec counterpart, L’Institut national d’excellence en santé et en services sociaux, “review value for money in the public system, public drug plans manage budgets and do their own analysis of affordability and now private payers do the same kind of analyses themselves,” he said.
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“So PMPRB is running in to fix a problem that is being dealt with by other agencies.”
Peacock also warned about the impact of lower drug prices on the pharmaceutical industry. “Imagine if the government came along and said you have to cut your prices by 20 to 40 per cent. What would the trade-offs be?”
Michael Law, Canada research chair in access to medicines at the Centre for Health Services and Policy Research at the University of British Columbia, agreed that the federal regulator is far less relevant in the 2018 market environment. While it has historically set price ceilings by comparing drug prices with other countries, Law said the comparison is less meaningful today because many prices involve behind-the-scenes negotiations and probably have different discounts. “The PMPRB does serve a function by providing essentially a safety blanket for private insurance companies and for cash-paying consumers who don’t negotiate prices by and large. But that’s now starting to change in the private sector.”
The pan-Canadian Pharmaceutical Alliance (pCPA): Since 2010, the pCPA has negotiated generic and brand drug prices on behalf of federal, provincial and territorial drug plans. At the Vancouver event, panellists discussed whether private payers should be able to join the price negotiations.
“Private insurers joining pCPA would come with consequences for plan members,” said Joe Farago, executive director of private payers and investment at Innovative Medicines Canada. “It comes down to ensuring access to medications. Regardless of the price of the medication, patients would have to wait longer for new drug therapies to go through the pCPA process. This could be up to two years. So it would be better for the patient if insurers did their own negotiations. If private plans start looking like public plans, you’d have nothing to sell, since the value to members is having access to drugs.”
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Marilee Mark, president of Marilee Mark Consulting Inc., disagreed.
“I’m not saying it is the only option for private plans to join pCPA, but it would simplify with one price for all and provide greater negotiating power,” she said.
“In the current environment, with continued growth in high-cost specialty drugs, sustainability of private plans is a concern. Insurers are already negotiating prices, with larger carriers having an advantage. Joining together, with or without pCPA, is the right path. All payers are looking for ways to cover innovative drugs that significantly improve health, allow people to be actively at work and are available to all Canadians. Governments, private payers and individuals can’t afford to do it alone, so we need to find the right balance. Drugs for rare diseases should only have one negotiator for price given low volume and need to spread the risk.”
National pharmacare: The long-discussed idea to implement a national pharmacare program in Canada has gained momentum since the 2018 federal budget announced a new advisory council to study the issues. And in April 2018, the House of Commons’ standing committee on health released its own report on pharmacare. At the event this month, panellists discussed how national pharmacare could affect health benefit plans.
“I’m not sure there is any consensus on an ideal model for pharmacare,” said Wayne Critchley, senior associate for the health and life sciences practice at Global Public Affairs.
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“But I’m concerned about a single-payer universal system because it limits options. If the government is running the program and we run into a recession, what’s going to happen to the program? There will be consistent pressures to reduce and limit coverage. To me, that’s an issue. I really see the benefit of employer-sponsored plans where you can determine what is the right package of benefits to offer employees in your company. That would be missed in government programs if they went national.”
Farago stressed that while everyone agrees all Canadians should have access to medicines and vaccines regardless of income, there are still many questions about how a national pharmacare plan would work. “One thing not talked a lot about is that any program should look at improving timely access,” he said.
“Whatever plan is put in place and for whatever population, the systems behind the approval process should look at not denying access to new therapy. If we are looking at filling in coverage gaps, it is important to note that about 22.5 million Canadians now have private insurance. There’s no need to pay for their medications, so what could you do with those dollars? One gap that more dollars could fill is coverage of drugs for rare diseases.”
Read more coverage from the 2018 Face to Face Drug Plan Management forum Vancouver.