Despite concerns Canadian drug prices are skyrocketing, the Patented Medicines Price Review Board, Canada’s price regulator, has ensured costs for patented drugs haven’t increased more than the Canadian Consumer Price Index in close to 30 years, said Wayne Critchley, Global Public Affairs’ senior associate of health and life sciences, during Benefits Canada’s Face to Face Drug Plan Management Forum on Dec. 9, 2020.
The PMPRB regulates drug prices, not costs, and although some may think overall drug plan costs are too high, the rise in prices is due to other factors such as increased utilization, argued Critchley. “Interestingly, according to the Canadian Institute for Health Information, the proportion of total health-care spending attributable to patented medicines is comparable to, or lower than, a decade earlier.”
Following several years of consultations, the PMPRB was set to implement new regulations on January 1, which were delayed, following the conference, to July 1. Since the PMPRB was established in 1987, provinces have expanded their ability to control prices through a variety of mechanisms, such as the use of health technology reviews via the Canadian Agency for Drugs and Technologies in Health or the Institut national d’excellence en santé et en services sociaux and joint price negotiations via the pan-Canadian Pharmaceutical Alliance. “In light of the provincial plan evolution, perhaps PMPRB needs to find ways to remain relevant,” said Critchley.
Although the new regulations are quite complex, Critchley said, there are a few key changes worth noting. The list of countries whose median is used to determine Canadian prices is switching to include lower-priced countries and remove some of the higher-priced ones, such as the U.S. New health-economic factors based on government health technology assessments will be used to determine prices, he added, and the PMPRB wants access to confidential pricing and rebates pharmaceutical companies and payers agree on via listing agreements.
These changes could result in 20 to 70 per cent drug-list price reductions and uncertainty on pricing for several years after a drug’s initial launch, said Critchley. “With the lower prices and uncertainty, pharmaceutical manufacturers will have to seriously assess the risk and viability of launching new drugs in Canada.”
The net effect could be a reduced number of new drugs being launched in Canada, he noted, which could limit employees and their families’ access to treatments they may need to manage their conditions and remain healthy, active and productive. Further, a 2019 report revealed there was already a decline in new Canadian drug launches in anticipation of the PMPRB changes.
Read more stories from the 2020 Face to Face Drug Plan Management Forum.