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Canadian Institute Conference - Arvind Mani's Presentation - Final - April 1 2015
- 1. pdci.ca
©2015 PDCI Market Access
Global Trends: Drug Pricing, Reimbursement and
Market Access
Arvind Mani
Director, Market Access and Policy Research
E-mail: Arvind.Mani@pdci.ca
1©2015 PDCI Market Access
- 2. 2
Canada in the Global Context
Product
Listing
Agreements
Pricing
Cost Containment
Trade Trade: How do
international trade
agreements potentially
impact the Canadian
pricing and reimbursement
landscape?
Pricing: To what
extent does
pricing from other
markets impact
pricing in
Canada?
Cost Containment:
What is the global
market access
environment and
emerging trends
currently faced by
manufacturers?
PLAs: What are the
global trends related
to PLAs and how do
they compare to
Canadian PLA
negotiations?
©2015 PDCI Market Access
- 4. 4,600
The number of drug
candidates in clinical
development in 20133
$930bn
The spend on pharma
R&D in the past 8
years1
30%
The proportion of drug candidates
in cancer indications 20133
1Scrip 100 survey, 3Pharmaprojects Source: Scrip Intelligence, January 9th 2015
4
47
The number of
novel products
launched in 20132
Global Pharmaceutical Innovation
10
The number of first-in-class
products launched in 20132
©2015 PDCI Market Access
- 5. 120
Number of companies
exceeding $500m drug
sales globally in 20131
$5.2tn
Drug sales in the last 8 years1
$709bn
Drug sales recorded for 20131
1Scrip 100 survey, 2Scrip Intelligence New Active Substance Launches in 2013 Source: Scrip Intelligence, January 9th 2015
5
Global Pharma Sales
©2015 PDCI Market Access
- 6. 2,700,000
EMPLOYEES WORLDWIDE
810,000
US - 20134
700,000
Various other countries5
693,195
Europe - 20136
~100,000
Japan and South
Korea
4PhRMA, 5IFPMA, 6EFPIA Source: Scrip Intelligence, January 9th 2015
Global Pharma Employment
6©2015 PDCI Market Access
- 7. Canada as percentage of Global Market
Since 2006, Canadian drug sales continually account for ~2.6% of
the global market
7
Distribution of Drug Sales Among Major National Markets, 2012
Source: PMPRB 2012 Annual Report citing IMS Health
©2015 PDCI Market Access
- 8. Canadian Pharma market larger than UK, Spain
8
Source: IMS Market Prognosis, May 2012
©2015 PDCI Market Access
- 9. 2,700,000
EMPLOYEES WORLDWIDE
810,000
US - 20134
700,000
Various other countries5
693,195
Europe - 20136
~100,000
Japan and South
Korea
4PhRMA, 5IFPMA, 6EFPIA, 7Industry Canada Source: Scrip Intelligence, January 9th 2015
Global vs. Canada Pharma Employment
9
26,000
Canada - 20147
©2015 PDCI Market Access
- 10. Global vs. Canada Pharma (in USD)
1PhRMA 22013 PMPRB Annual Report 3Scrip 100 survey 4Industry Canada
10
$140 bn
Global pharmaceutical
R&D in 20131
$0.7 bn
Canadian
pharmaceutical R&D in
20132
$709 bn
Global drug sales in
20133
$20.5 bn
Canadian
pharmaceutical sales in
20132
26,000
Canadian pharma
employees4
2.7 mn
Global employees in
20133
©2015 PDCI Market Access
- 12. Canada - EU Trade Agreement - CETA
Comprehensive Economic and Trade Agreement (CETA):
Pharma IP Provisions: (Details still to be announced)
• Patent Term Restoration
Extended Data Protection
• Innovator Right of Appeal
12©2015 PDCI Market Access
- 13. CETA and Patent Act
13
Innovative
Pharmaceutical
lndustry
Generic
Pharmaceutical
lndustry
Private Drug
Plans &
Insurers
PMPRB
and Staff
Patient
Advocacy
Organizations
Health
Canada
Public Drug
Plans Labour
organizations
©2015 PDCI Market Access
- 14. Potential Amendments & Implications
1. PMPRB Jurisdiction & Definitions
2. Excessive Price Factors
3. Research & Development
4. Resolution, Hearings and Arbitration
5. Practical Amendments
6. Reference Countries
14©2015 PDCI Market Access
- 16. Factors in setting pharmaceutical prices
Domestic Factors
• Return on investment
• Competition / Market forces
• Prices of alternatives
• Price regulation / HTA / reimbursement policies
International /Global Factors
• External price referencing
• Currency fluctuations
• Health Reform
16©2015 PDCI Market Access
- 17. External Price Referencing
• Most countries (other than
the UK) apply some form of
external referencing
• Approaches / methodologies
vary significantly
17©2015 PDCI Market Access
- 18. Price Change – PMPRB Reference Countries
18©2015 PDCI Market Access
- 19. Canada vs. International Price Trends (PMPRB)
Rank 2005 Ratio
1 Italy 0.88
2 France 0.99
3 Canada 1.00
4 Sweden 1.05
5 UK 1.11
6 Germany 1.15
7 Switzerland 1.21
8 US 1.83
19
Rank 2013 Ratio
1 France 0.72
2 UK 0.78
3 Italy 0.79
4 Sweden 0.90
5 Switzerland 0.95
6 Canada 1.00
7 Germany 1.04
8 US 2.07
• Canadian prices higher than most European prices
• There may be changes in PMPRB price guidelines if “high” Canadian
prices persist
Average Foreign-to-Canadian Price Ratios
Source: PMPRB
©2015 PDCI Market Access
- 20. Pricing & International Price Referencing
• Price increases are possible in the US, and to a
limited extent in Canada but rarely in Europe and
Japan
• Currency exchange fluctuations are beyond the
control of manufacturer
• Price cuts are common in many European markets
• Reimbursement status is reviewed periodically in
some markets which can lead to new price
negotiations
• New health reform policies (e.g., Germany)
20©2015 PDCI Market Access
- 22. Emerging Developments Related to Cost Containment
1. Delisting of Oncology Treatments
2. Off-Label Prescribing
3. Downgrading Coverage
4. Uptake of Biosimilars
5. Private Payer Exclusivity Arrangements
22©2015 PDCI Market Access
- 23. PDCI Survey on Global Cost Containment Trends
7
2
Location of Individuals
Canada
Europe
23
2
3
4
Perspective
Private
Payer
Public
Payer
Industry
• On-line survey
• Contacted individuals in
Canada and Europe
• Survey conducted from
March (19-25, 2015)
Focused on 4 Elements:
1. Will other public payers attempt
similar cost containment?
2. Will private payers attempt
similar cost containment?
3. When could this happen in
Canada?
4. How will industry respond?
©2015 PDCI Market Access
- 24. Results of PDCI Survey on Global Cost Containment Trends
24
1. Delisting of Oncology Treatments
International Industry Canadian Public Payer Canadian Private Payer Canadian Industry
Q1: Will other public
payers start delisting
cancer products?
0
3
6
9
No Yes
Q2: Will private payers
start delisting cancer
products?
0
3
6
No Yes
Q3: When will Canadian
public payers start
delisting cancer
products?
0
3
6
©2015 PDCI Market Access
- 25. Results of PDCI Survey on Global Cost Containment Trends
25
Public Payer: “It is unlikely a price decrease will
overcome a lack of clinical evidence so
proposals for PLAs may focus more on evidence
gathering and/or risk-sharing.”
Private Payer: “I hope pharma reconsiders
their pricing models. Assuming quality and
efficacy are comparable, then public payers
are absolutely right to insist on price reduction
or other added value as a condition of listing.
Governments are stewards of taxpayer money
for which there is no shortage of alternative
uses.”
Q: How do you think industry will respond to the delisting of their
products?
©2015 PDCI Market Access
- 26. Results of PDCI Survey on Global Cost Containment Trends
26
Off-Label Prescribing Provisions
International Industry Canadian Public Payer Canadian Private Payer Canadian Industry
Q1: Will other public
payers start using off-
label prescribing
provisions?
0
3
6
9
No Yes
Q2: Will private payers
start using off-label
prescribing provisions?
0
3
6
9
No Yes
Q3: When will Canadian
public payers start
using off-label
prescribing provisions?
0
3
©2015 PDCI Market Access
- 27. Results of PDCI Survey on Global Cost Containment Trends
Q: How do you think industry will respond to the introduction of
provisions for off-label prescribing?
27
Public Payer: “They [industry] will not
appreciate the increased competition
it [off-label prescribing] creates. In the
Canadian market they may respond by
lowering confidential public prices to
maintain the private market.”
International Industry: “They [industry]
will encourage that evidence based
medicine with appropriate labels should
be used.”
©2015 PDCI Market Access
- 28. Results of PDCI Survey on Global Cost Containment Trends
28
Downgrading Coverage of Currently Listed Products
International Industry Canadian Public Payer Canadian Private Payer Canadian Industry
Q1: Will other public
payers become more
aggressive in
reassessing currently
covered products?
0
3
6
9
No Yes
Q2: Will private payers
become more
aggressive in
reassessing currently
covered products?
0
3
6
No Yes
Q3: When will Canadian
public payers becoming
more aggressive in
reassessing currently
covered products?
0
3
6
©2015 PDCI Market Access
- 29. Results of PDCI Survey on Global Cost Containment Trends
Q: How do you think industry will respond to aggressive
reassessments of their products?
29
Private Payer: “Concede on original
pricing to re-establish the relative value of
their products relative to competitors.”
Public Payer: “More aggressive marketing
to physicians.”
©2015 PDCI Market Access
- 30. Results of PDCI Survey on Global Cost Containment Trends
30
Uptake of Biosimilars: Substitution
International Industry Canadian Public Payer Canadian Private Payer Canadian Industry
Q1: Will public payers move
toward substitution of the
biosimilar for the brand biologic?
0
3
6
9
No Yes
Q2: Will private payers move
toward substitution of the
biosimilar for the brand biologic?
0
3
6
No Yes
©2015 PDCI Market Access
- 31. Results of PDCI Survey on Global Cost Containment Trends
31
Uptake of Biosimilars: Therapeutic Priorities
Rank the following biosimilar classes in terms of which will have the most
impact in driving payer adoption of biosimilar.
3 points = most impact; 2 points = medium impact; 1 point = least impact; 0 points = no impact
0
3
6
9
12
15
18
21
24
Rheumatoid Arthritis Diabetes Oncology
International Industry Canadian Public Payer Canadian Private Payer Canadian Industry
©2015 PDCI Market Access
- 32. Results of PDCI Survey on Global Cost Containment Trends
32
Exclusivity Agreements
Q2: Will public payers pursue
exclusivity agreements?
International Industry Canadian Public Payer Canadian Private Payer Canadian Industry
Q1: Will other private payers
pursue exclusivity agreements?
0
3
6
9
No Yes
0
3
6
No Yes
©2015 PDCI Market Access
- 33. Results of PDCI Survey on Global Cost Containment Trends
Q: How do you think industry will respond if private payers start to
pursue more exclusivity agreements?
33
Public Payer: “Much the same way as they did to public payers -
PLAs, risk-shares and evidence-gathering.”
Private Payer: “More aggressive marketing push direct to
members via patient assistance programs, financial assistance”
Public Payer: “The market will become more of an all or
nothing for manufacturers. For the aggressive manufacturers
there is a chance to get a greater market share. But overall
manufacturers will not like this because it ultimately will drive
down their profit margin per unit.”
Canadian Industry: “More aggressive PLAs. As we saw years back
with PPIs, there will always be a company that is willing to push
negotiations for exclusivity”
©2015 PDCI Market Access
- 35. Product Listing Agreements
35
The Performance Based Risk Sharing (PBRS) web-enabled database was
developed by the Pharmaceutical Outcomes Research & Policy Program at the
University of Washington https://depts.washington.edu/pbrs/index.php
©2015 PDCI Market Access
- 36. PBRSA - Defined
“Performance-based risk-sharing arrangements
(PBRSAs)—involve a plan by which the performance
of the product is tracked in a defined patient
population over a specified period of time and the
amount or level of reimbursement is based on the
health and cost outcomes achieved.”
36
Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other Medical Products, June, 1, 2014,
Garrison, Towse and Carlson.
©2015 PDCI Market Access
- 38. Taxonomy
Outcomes
guarantee
Clinical
Endpoint
[E.X: Bortezomib in
UK]
Intermediate
Endpoint
[E.X: Simvastatin
in US]
Performance-based schemes between health care payers and manufacturers
Health outcomes-based schemesNon-outcomes
based schemes
Performance-linked
reimbursement (PLR)
Pattern or
process of care
[E.X: OncotypeDX in US
(United Healthcare)]
Only in research
[E.X: Cochlear implants in
US(CMS)]
Only with research
[E.X: Risperidone in France]
Coverage with
evidence
development
(CED)
Conditional
coverage
Conditional
treatment
continuation
(CTC)
[E.X: Alzheimer’s drugs
in Italy]
38
Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other
Medical Products, June, 1, 2014, Garrison, Towse and Carlson.
©2015 PDCI Market Access
- 39. Conditional Treatment Continuation Schemes
0
2
4
6
8
10
12
14
16
NumberofSchemes
39
Source: Office of Health Economics Research & Consulting, University of Washington 2014
Conditional treatment continuation:
continuation of coverage for individual
patients is conditioned upon meeting
short-term treatment goals
©2015 PDCI Market Access
- 40. Taxonomy
Outcomes
guarantee
Clinical
Endpoint
[E.X: Bortezomib in
UK]
Intermediate
Endpoint
[E.X: Simvastatin
in US]
Performance-based schemes between health care payers and manufacturers
Health outcomes-based schemesNon-outcomes
based schemes
Performance-linked
reimbursement (PLR)
Pattern or
process of care
[E.X: OncotypeDX in US
(United Healthcare)]
Only in research
[E.X: Cochlear implants in
US(CMS)]
Only with research
[E.X: Risperidone in France]
Coverage with
evidence
development
(CED)
Conditional
coverage
Conditional
treatment
continuation
(CTC)
[E.X: Alzheimer’s drugs
in Italy]
40
Source: Risk-Sharing/Performance-Based Arrangements for Drugs and Other
Medical Products, June, 1, 2014, Garrison, Towse and Carlson.
©2015 PDCI Market Access
- 43. PDCI pCPA Benchmarking Survey
• A request was sent to fill out the survey was sent to all the
companies that have successfully negotiated an agreement
with pCPA
• Six companies, for a total of 7 products responded:
• 1 oncology product
• 6 non-oncology products
List (including list with
criteria/criterion, list
with clinical criteria
and/or conditions and
list in a similar manner
to other drugs in class)
66%
Not considered cost
effective at submitted
price
17%
Do not list
17%
HTA Recommendations for Surveyed Products
43©2015 PDCI Market Access
- 44. PDCI pCPA Benchmarking Survey
Types of financial agreements that were agreed upon
Answer Choices Responses
Price rebate (i.e. %discount from list price) 85.71% 6
Expenditure cap ( i.e. restriction on $ reimbursed
for a given time period)
0.00% 0
Utilization cap (i.e. restriction on the number of
patients reimbursed)
0.00% 0
Other 14.29% 1
Total 7
44©2015 PDCI Market Access
- 48. Biography
Arvind Mani
Director, Market Access and Policy Research
PDCI Market Access Inc
Arvind.Mani@pdci.ca
www.pdci.ca
Arvind Mani is the Director of Market Access and Policy Research at PDCI. Arvind leads a team of consultants on
pharmaceutical reimbursement (budget impact analyses), policy, and patent litigation projects. Arvind has more
than 15 years of experience working in industry, associations and consulting. He provides expert knowledge to
companies, governments on pharmaceutical pricing, regulatory, market access, and patent issues and is also
responsible for contributing to pricing and reimbursement policy and analysis projects. Before joining PDCI,
Arvind spent several years as the Director of Corporate Affairs at the National Association of Pharmacy Regulatory
Authorities (NAPRA) in Ottawa. Prior to NAPRA, he worked for 8 years at Canada’s Research-Based
Pharmaceutical Companies (Rx&D), an association that represents the interests of innovative pharmaceutical
companies in Canada. Arvind held various positions at Rx&D, including Research Analyst, Director of Regulatory
Affairs, and Director of Policy Development. Prior to joining Rx&D, Arvind was a Market Analyst with Ciba Geigy
(now Novartis Pharmaceuticals Canada Inc.).
PDCI Market Access (PDCI) is a leading pharmaceutical pricing and reimbursement (P&R) consultancy based in
Ottawa and Toronto. Established in 1996, the firm features a senior team of multi-lingual market access
professionals with extensive experience assisting clients navigate the complex P&R challenges facing Canadian
pharmaceutical manufacturers. PDCI develops successful P&R strategies and prepares comprehensive
submissions to CDR, pCODR, public & private payers and the PMPRB. The firm’s senior consultants facilitate
meetings with CDR/payers/PMPRB, negotiate product listing agreements (PLAs) and resolve pricing compliance
issues with the PMPRB. PDCI maintains databases of international pharmaceutical prices and provincial drug
claims and costs.
48©2015 PDCI Market Access