1. Market Access Climate Change:
the Evolving Impact of Product Listing Agreements
October 30, 2015
Arvind Mani, Director of Market Access and Policy Research

2. PDCI Market Access: Background
 Established in 1996, PDCI is Canada's leading pharmaceutical pricing and
reimbursement consultancy
 Based in Ottawa and Toronto, with a staff of 19 featuring senior,
experienced consultants
2
Ottawa
Toronto
About PDCI

3. Outline
Introduction
Module 1 pan-Canadian Pharmaceutical Alliance Updates
Module 2 Private Payer Product Listing Agreements
Question and Answer Period
3
Webinar Objectives
• Recent developments at the pCPA
• Private payer product listing agreement

4. Introduction
4

5. New Era, “Sunny Ways”
 “We will join provincial and territorial governments to negotiate better prices for
prescription medications and to buy them in bulk – reducing the cost governments pay
to purchase drugs.”
 “We will consult with industry and review the rules used by the Patented Medicine
Prices Review Board to ensure value for the money governments and individual
Canadians spend on brand name drugs.”
5
Introduction
Source: Liberal Government- Investing in Health and Homecare;
Huffington Post (2013 article)

6. Question 1
Given the Liberal government’s interest in bulk purchasing to reduce costs,
how likely do you think it is that the pan-Canadian Pharmaceutical Alliance
(pCPA) will be the starting point for some form of national Pharmacare
program?
a) Highly Likely
b) Likely
c) Neutral
d) Unlikely
e) Highly Unlikely
6
Introduction

7. Question 2
Given the Liberal government’s interest in reviewing the rules of the PMPRB,
do you believe the federal government will aim to make this regulatory body
more “relevant”?
a) Yes
b) No
7
Introduction

8. Canada’s Healthcare
 Population: 35.5 million
 Federation of 10 provinces and 3
Territories
 Health care system is government
funded
– Universal, comprehensive, accessible,
portable, publicly administered
– “Comprehensive” coverage includes all
physician and hospital costs but not cost of
prescription drugs outside hospital
8
Introduction
13.79
8.26
4.68
4.20
1.29
1.13
0.943
0.7539
0.5278
0.1464
0.0441
0.0374
0.0369
0.00 5.00 10.00 15.00
Ontario
Quebec
British Columbia
Alberta
Manitoba
Saskatchewan
Nova Scotia
New Brunswick
Newfoundland and Labrador
Prince Edward Island
Northwest Territories
Yukon
Nunavut
Estimated 2015 population by province and
territory (in Millions)
Source: Stats Canada (2015)

9. Who Funds Prescription Drugs?
Source: Canadian Institute for Health Information (CIHI) , Prescribed Drug Spending in Canada, 2014: Focus on Public Drug Programs (Published 2015)
Public
Federal/ Provincial Drug
Plans
Hospital in-patients
Separate Cancer Agencies
Private Insurers
Employer sponsored drug
coverage for employees
and their families
Out of Pocket
No coverage / uninsured /
underinsured
Non-reimbursed drugs
Deductibles / co-
payments
% Distribution of Rx Drug Expenditures Canada 2014
9
Introduction
Public
Payers
42%
Private
Insurers
36%
Out of
Pocket
22%

10. Prescription Drug Landscape: The Market
10
Introduction
 Consistent health care access among Canadians, including prescription
drugs, regardless of residence
 Timely access to innovative therapies as they are “rolled out”, no matter the
price tag
"It was a shock to me that I had to
pay for cancer treatment. That's not
how it's supposed to be in
Canada."’— Julie Easley, Cancer
Patient
'We cannot put a price tag on
the health and well-being of
any Canadian’— Ken Chan, VP
at Cystic Fibrosis Canada

11. Prescription Drug Landscape: The Product
11
Introduction
2% of claimants
Specialty Drugs account for
26.5% of costs
Source: Express Scripts Drug Trend Report , 2014 (Published 2015)

12. Prescription Drug Landscape: The Budget
12
Introduction
Source: Canadian Institute for Health Information (CIHI) , National Health Expenditure 1975 to 2014

13. Product Listing Agreements
13
Introduction
 Uncertainty exists surrounding the product’s:
– New therapies for unmet needs;
– Efficacy (heterogeneity);
– Real world effectiveness;
– Safety risks;
– Cost-effectiveness; and
– Budget impact.
A product listing agreement (PLA) is a contract negotiated between a
pharmaceutical manufacturer and a drug benefit plan outlining specific
conditions related to the drug plan’s reimbursement of a drug product.

14. Question 3
Has your company negotiated a product listing agreement with the pCPA?
a) Yes
b) No
14
Introduction

15. Public Market
NIHB
Provinces
/Territories
pCPA
Private Market
Private Payers (no
formalized process
for PLA)
15
Current PLA Landscape
Introduction
Innovative Drug Product
CDR: Common Drug Review
pCODR: pan-Canadian Oncology Drug Review
pCPA: pan-Canadian Drug Pharmaceutical Alliance
CDR/pCODR

16. Key Takeaways
 Political change and uncertainty
 Growing importance of specialty treatments
 Political pressure to cover new treatments
 Drug expenditures controlled temporarily
 PLAs are here to stay
16

17. Module 1: pCPA Updates
17

18. pan-Canadian Initiative
18
pCPA Updates
The pan-Canadian Pharmaceutical Alliance (pCPA) is pan Canadian initiative made up
of most provincial/territorial (P/T) jurisdictions whom conduct joint negotiations for
brand name and generic drug products being considered for reimbursement in
Canada through their respective public drug plans.
The pillar of the public PLA environment in Canada is the pCPA
 Created in 2010
 Objectives for Brand Name Pharmaceuticals:
– Access
– Consistency
– Lower drug costs
– Efficiency
– Bargaining power
 Objectives for Generic Pharmaceuticals:
– Consistency
– Lower drug costs

19. Question 4
Which of the following developments at the pCPA do you find to be most
positive over the past few years?
a) Improved communication between pCPA and manufacturers
b) A better understanding of the pCPA process
c) Agreement by all parties that HTA recommendation forms the content
basis of agreement
d) None of the above
19
pCPA Updates

20. pCPA 5 year Status
20
pCPA Updates
Activity Report (as of August 2015)
 146 drugs considered
 79 complete
 22 ongoing
 Price reductions for 14 generics
 27% of the Canadian generic market is priced at 18% to brand
 Process becoming more efficient
Source: Pharmaceutical Trends- Pubic Payer Perspective (Presented at CAHR Western Day October 2015, Kevin Wilson)

21. Question 5
Which of the following elements of the negotiation are the most challenging?
a) Adjustment to the BIA during negotiations
b) Significant variance in timeliness of listing and lead province's
capacity/capabilities
c) Difficulty negotiating an outcome-based agreement
d) None of the above
21
pCPA Updates

22. pCPA Office
22
pCPA Updates
 Pan Canadian Drugs Negotiations
Report recommended create of a
Secretariat
 The Office supports pCPA work and
provide expertise to support
negotiation and performance
monitoring
– Proposed Mission: Driving collective
pCPA success through achievement of
value-driven, effectively communicated
and evaluated outcomes.
– Proposed Mandate: Providing leadership
and operational excellence to
participating public drug plans to
collectively achieve the objectives of the
pan-Canadian Pharmaceutical Alliance
Source: pCPA Update- Industry Session Webinar (June 16, 2015)

23. Proposed pCPA Office Structure and Function
23
pCPA Updates
– Template standardization
– Administrative support
– Performance metric tracking
– Multi-channel communications
Council of the Federation
(Premiers)
Health Care Innovation Working
Group
Conference of Deputy Ministers of
Health
pCPA Executive Group (P/T Drug
Program Senior Leads)
pCPA Steering Committee (Senior
Executive Sub-Group)
P/T & Cancer Agency Staff
The Office of
the pCPA
pCPA
Source: pCPA Update- Industry Session Webinar (June 16, 2015)

24. Update: pCPA Office Operational
24
pCPA Updates
S TA F F
As per the pCPA October update, the Office is now operational...
• Senior Manager and Senior Negotiator in place
• Recruitment still underway for 3 more individuals to complete the team
Imran Ali
Title: Senior Manager ─ pan-Canadian
Pharmaceutical Alliance (pCPA) Office
Previous Experience:
• Senior Manager ─ Agreements and
Negotiations Unit, Ontario Ministry of Health
and Long-Term Care
• Ministry Co-Chair ─ Systems Management
Committee , Ontario Medical Association

25. Update: pCPA Office Operational
25
pCPA Updates
S TA F F
As per the pCPA October update, the Office is now operational...
• Senior Manager and Senior Negotiator in place
• Recruitment still underway for 3 more individuals to complete the team
Anchalee Srisombun
Title: Senior Negotiator ─ pan-Canadian
Pharmaceutical Alliance (pCPA) Office
Previous Experience:
• Health Policy Advisor ─ Cystic Fibrosis Canada
• Business Manager, Pricing and Supply ─ UK
Department of Health
• Workforce Programme Officer, Allied Health
Professions ─UK Department of Health

26. Update: pCPA Office Operational
26
pCPA Updates
900 Bay Street
Toronto, Ontario
M7A 1C2
L O C AT I O N
 Next steps for the Office
I. Develop standardized guidelines, mandate, and structure
II. Staffing and logistics
III. Continued stakeholder engagement
IV. Funding
V. A phased approach for implementation

27. Impact: pCPA Office Operational
27
pCPA Updates
– Role of current HTA bodies  NO change.
– Role of provinces with appointment of lead province NO
change.
– The pCPA negotiation process  CHANGE.
– Single point of contact
– Standardized process across jurisdictions
– Increased Transparency
– Pre-negotiation evaluation by the Office  *NEW *

28. Question 6
Please indicate the level of agreement with the following statement: “The
creation of the new pCPA office will significantly improve the negotiation
process between the pCPA and manufacturers.”
a) Strongly agree
b) Agree
c) Neutral
d) Disagree
e) Strongly disagree
28
pCPA Updates

29. Québec versus Pan-Canadian
 2nd largest market in Canada
 Largest net debt per capita ($23.2 thousand; 2014-2015)
 Lowest price provisions.
– Since the creation of the pCPA this has not been the case
– QC is paying full list price for drugs
– Significant foregone savings
29
Source: Canadian Institute for Health Information (CIHI) , National Health Expenditure Trends , 1975 to 2014 (Published 2014); RBC Canada, Canadian
Federal and Provincial Fiscal Tables (published 2015) ; Government of Quebec Politique du medicament (2007)
pCPA Updates

30. Bill 28
 Quebec Bill 28 receives Royal Assent on April 21, 2015
 QC Health Minister (the Minister) can enter into a PLA
with a manufacturer prior to having the drug added on the
Liste des médicaments
 Important Bill amendments:
– Temporary exclusion
– Publication of INESSS recommendations
– Reporting on Impact by October 2017
30
pCPA Updates

31. Update: Québec joins pCPA
As per the pCPA October 16th update, QC has now
joined pCPA...
• Brand and generic initiatives
• Ongoing and completed negotiations
31
Quebec PLAs

32. Impact: Québec joins the pCPA
- New negotiations  CHANGE
o QC will participate and possibly lead
- Ongoing negotiations CHANGE
o QC will be joining majority of ongoing
negotiations which have INESSS recommendations
o Manufacturers will be notified
- Completed negotiations CHANGE
o Process in place for jurisdictions wishing to become a
“new” party to a Letter Of Intent (LOI)
o Consent of all original participating parties within the
LOI
32
pCPA Updates

33. Question 7
What impact do you believe the inclusion of Quebec into the pCPA process
will have on listing performance (number of products and time to listing) in
Quebec?
a) Improve the performance (quicker listing of more products)
b) Deteriorate the performance (slower listing of fewer products)
c) Will not impact the performance
33
pCPA Updates

34. Outlook ─ pCPA Office Operational
34
pCPA Updates
 Greater clarity, structure, and efficiency in the negotiation
process
 Better sense of timeline expectations and administration
point of contact
Question: Will the Office will
encourage more formal linkages/
cooperation between CADTH,
PMPRB and the pCPA

35. Outlook ─ Québec joins pCPA
 Listing previously rejected products
 More private payer PLAs in QC
 Increased access challenges
Question: Given the variance in how INESSS reviews products
compared to CADTH, it remains to be seen how negotiations will
occur when there is incongruence on clinical recommendations
35
pCPA Updates

36. Question 8
How likely do you think it is that private payers will be joining the pCPA?
a) Highly Likely
b) Likely
c) Neutral
d) Unlikely
e) Highly Unlikely
36
pCPA Updates

37. Module 2: Private Payer PLAs
37

38. Private Payers in Canada
38
Private Payer PLAs
 Starting to build internal competencies aimed at negotiating
product listing agreements (PLAs)
 Concerns about increasing drug costs, particularly for
specialty products
 Expressed interest in participating in pCPA negotiations
 Need to better understand the prevalence, objectives and
content of PLAs in this important market segment

39. Question 9
Has your company negotiated a product listing agreement with a private
payer?
a) Yes
b) No
39
Private Payer PLAs

40. Survey Objective
40
Private Payer PLAs
Pharma Private Payers
• How many insurers and
PBMs have experience with
PLAs?
• Will PLAs become a
requirement for coverage?
• What types of agreements
are preferred?
• How many companies have
experience with private payer
PLAs?
• Why would companies seek
to negotiate with insurers or
PBMs?
• What types of agreements
have been negotiated?

41. Methodology
41
Private Payer PLAs

42. Private Payer PLA Series
42
Private Payer PLAs
Once closed, survey responses were analyzed and four summary
reports were created and released to the public.
To obtain free copies of the Private Payer PLA Series please visit our website at pdci.ca.

43. Key Findings - Negotiation Leaders
 Grow in importance over time.
 Private payers will likely pursue PLAs in a more organized and
aggressive manner
 Without any tangible threats to access, it may be up to private
payers to initiate discussions, similar to the lead taken by their
provincial counterparts
 Strong incentive amongst smaller private payers to negotiate
collectively
 Larger private payers will
likely be able to negotiate
more competitive agreements
43
Private Payer PLAs

44. Key Findings - Product Types
 Non-specialty products, will likely be initiated by
manufacturers seeking preferential listing over comparators
 Specialty products, will likely be initiated by private payer as a
precondition to listing
Questions - There remain intriguing questions about how drugs
for rare diseases will be dealt with.
44
Private Payer PLAs

45. Question 10
What type of product(s) are you prepared to negotiate a private payer
product listing agreement for?
a) Specialty product (e.g. Enbrel)
b) Drug for rare disease (e.g. Kalydeco)
c) Non-specialty product
d) All of the above
e) None of the above
45
Private Payer PLAs

46. Key Findings - Agreement Types
46
Private Payer PLAs
1
2
6
2
0%
25%
50%
75%
100%
Manufacturer Private Payer
ProportionofResponseCounts
Outcome Based Non-Outcome Based
Manufacturers Private Payers
Agreement types negotiated by negotiation experienced
participants (manufacturers n=7 and private payers n=2)

47. Key Findings - Timing
47
Private Payer PLAs
0
1
2
3
4
5
Less than 1
month
1 to 3 months 4 to 6 months More than 6
months
ResponseCounts
Negotiation Length
Private Payers
Manufacturers
Negotiation length as per experienced participants
(manufacturers n=7 and private payers n=2)

48. Key Findings - Challenges
 Transparency - Learning from the US private market, payers
may begin to request more open PLAs that present more
obvious advantages (in value and transparency) to their
employer clients and plan members
 PE Expertise - Capacity for insurers to conduct/better
understand pharmacoeconomic analyses of new products
 Competition Bureau - Private payers need to examine any anti-
competitive hurdles
48
Private Payer PLAs

49. Question 11
Do you believe confidentiality of private payer PLAs is a significant challenge
for manufacturers?
a) Yes
b) No
49
Private Payer PLAs

50. Outlook ─ Private Payer PLAs
50
 PLAs as pre-condition of
listing for (expensive) new
specialty products.
 If Manulife DrugWatch™
gains traction in the market,
it’s only a matter of time
before other large carriers
develop competing offers.
 Increased pressure to
negotiate private payer PLAs
in Quebec.
Private Payer PLAs

51. Question 12
Manulife recently released its DrugWatch Program™ aimed at providing
greater scrutiny on specialty products. Do you believe that other major
carriers will follow Manulife’s lead and create similar programs?
a) Yes
b) No
51
Private Payer PLAs

52. Outlook ─ Private Payer PLAs
52
 Smaller sized private payers will likely look to work together
to negotiate competitive agreements
 Payers will need to resolve concerns about collusion and
anti-competitive behaviour
 Given that more stakeholders are involved in private payer
PLAs increasing the risk of information spillage.
Private Payer PLAs

53. Question and Answer Period
53

54. 54
Thank you
Arvind Mani - Director, Market Access and Policy Research
(613) 742-8225, Ext. 31
Arvind.Mani@pdci.ca
Arvind Mani is the Director of Market Access and Policy Research at PDCI
Market Access Inc. (PDCI), a leading Canadian pricing and reimbursement
consultancy. Through his 20 years of experience working in consulting,
associations (pharmaceutical and pharmacy) and industry, Arvind has
developed an in-depth understanding of the Canadian and international
pharmaceutical market access environment. At PDCI, he leads and provides
strategic advice in the development of reimbursement submission dossiers
that help clients demonstrate clinical- and cost-effectiveness to payers and
health technology assessment agencies. Arvind has established expertise on
emerging market access topics related to product listing agreements (PLAs),
biosimilars, and drugs for rare diseases. He has published on a wide array of
subjects ranging from companion diagnostics to healthcare reform. Arvind’s
payer research project work has helped establish a solid relationship with
both public and private payer stakeholders in Canada and allows him to offer
clients strategic advice to help negotiate PLAs. Aside from facilitating advisory
board meetings and conducting training sessions on topics related to the
Canadian market access environment, he also presents/moderates sessions at
market access conferences and academic institutions.