The Canadian Life and Health Insurance Association is asking the Patented Medicine Prices Review Board to include workplace-related factors when it sets maximum prices for medications.

In its submission for the PMPRB’s consultation on its draft guidelines, which were released in November, the CLHIA said the life and health insurance industry is very supportive of the changes to regulations governing the board.

The reforms, expected to come into effect July 1, 2020, will update the reference countries Canada uses to compare its prices internationally. They’ll also provide the PMPRB with the market price of medicines in Canada, adding any possible rebates, instead of the inflated sticker price to allow the board to better assess whether a drug price is reasonable when setting its ceiling price, and give the board the ability to consider whether the drug’s price reflects its value to patients.

Read: Draft PMPRB guidelines include changes to reference countries, drug price factors

The CLHIA also said it was pleased the PMPRB is developing a public monitoring strategy to assess the impact of new regulations on patients, health-care providers and other stakeholders. However, it suggested the board consider additional factors “beyond those that have traditionally been used by public payers” when setting the maximum price for drugs, including whether the medication helps someone return to work, supports productivity and improves mental health.

“Such factors have traditionally not been given sufficient weight in health technology assessments,” wrote Stephen Frank, the CLHIA’s chief executive officer, in the letter. “A healthy, productive workforce ultimately benefits our public health system beyond reduction of hospitalizations and we believe they are valid considerations in any [health technology assessment] methodology.”

The CLHIA also asked the board to give careful consideration to how it will enforce its list price and to re-evaluate its approach to how excessive revenues are determined through voluntary compliance undertakings or orders by the PMPRB and how they’re returned by patent-holders.

Currently, any excess amounts are paid to Canada’s receiver general and then returned to provincial and territorial public payers based on an existing formula. The CLHIA said Canadian employers should share in reimbursements, as they “can incur significant excessive costs” as well.

Read: Feds announce final changes to Canadian drug pricing regulations

“Accordingly, we recommend modifications to legislation to facilitate the PMPRB developing a mechanism to ensure that all stakeholders who were impacted by excessive revenues, including plan sponsors . . . who provide drug benefits plans for their employees, are reimbursed equitably,” noted the letter.

Two health consultancies are also providing feedback to the PMPRB’s draft guidelines, noting the board’s proposals were lacking “any consideration of the substantial role played by the private drug market plan” and urged it to consider the needs of Canadians who weren’t covered by provincial or federal drug plans.

In the submission, Chris Bonnett, principal consultant at H3 Consulting Group, and Denise Balch, principal consultant and president of Connex Health Consulting, said they support both the PMPRB’s move to require drug manufacturers to submit actual net market prices rather than list prices and the changes to the board’s reference countries, which eliminated Switzerland and the U.S., the only two countries with higher drug prices than Canada.

Read: What will PMPRB drug pricing changes mean for plan sponsors?

However, they suggested that the PMPRB stagger the repricing of its list of grandfathered patented medications to the mean international price of the reference countries over a period of two to three years. Currently, the PMPRB has proposed to undertake the process in the last half of 2020. Staggering the repricing would offer immediate savings to plan sponsors, but would reduce insurance broker compensation and insurer administration revenue and profit, as well as harm the drug plan premium and sales taxes collected by provinces, noted the submission.

The consultants also urged the PMPRB to measure the impact of its cost-control measures; evaluate the actual effects against the board’s projections and publicly report the data at least annually for a period of five years; and to commission regular studies to inform policy.

“These changes are complex and it is perhaps not clear to anyone exactly what the bottom-line impacts will be for each future drug and the pharmaceutical industry at large,” they wrote. “Possible risks include the opportunity cost of new therapies that may not be released here; Canada’s place in the launch sequence of new drugs; fewer opportunities for Canadians to access clinical trials; loss of Canadian jobs in the pharmaceutical industry; and foregone investments in drug research and development. All of these affect industries, health research, patient access and health status.”

Read: Pharma companies launching challenge to PMPRB changes

The consultants also said the PMPRB should consult with the CLHIA’s 23 health insurers, third-party administrators and Canada’s three largest pharmacy benefit managers, as well as provincial and federal drug plan managers before it implements its proposed six-month grace period for transitioning several thousand drug identification numbers to new prices.

“Specifically, PMPRB should be aware that drug price changes will have to be effectively communicated to tens of thousands of insurer clients plus their intermediaries,” they wrote, also noting that the terms of many private product listing agreements will need to be reviewed and renegotiated. “Six months may not be enough to effect all these changes.”

The changes to the guidelines have created “significant anxiety” in the pharmaceutical industry, they wrote, adding that “our discussions indicate that business decisions are already being hampered and introduction of new products deferred. This creates patient anxiety and affects access for patients.”

Read: Proposed PMPRB changes could limit Canada’s access to new drugs: report

Bonnett and Balch also called on the PMPRB to launch an advisory board — comprised of representatives for the public system, insurers, advisors, plan sponsors, patients and generic and drug manufacturers, members from the pharmacy industry and other health professionals — to manage the complexity of the changes and “create the relationships and trust needed to solve complex problems that have both singular and interactional effects.”

Copyright © 2020 Transcontinental Media G.P. Originally published on

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