Roadmap to Optimal Drug Access (Neil Palmer, PDCI) June 14, 2017
1. Roadmap
to
Optimal
Drug
Access
Approaches
to
Pricing
and
Access:
International
Comparisons
&
Innovative
Therapies:
Orphan
drugs,
Precision
Medicines,
&
Cellular
Therapeutics
W.
Neil
Palmer
Delta
Hotel
Toronto
June
14,
2017
June
2017 1
3. HC
Proposal:
Expanded
International
Reference
Pricing
Criteria
for
selecting
Countries
Proposed
Countries
Three
main
criteria
have
been
used
to
select
the
countries:
1. Consumer
protection:
whether
the
country
has
national
pricing
containment
measures
in
place
to
protect
consumers
from
high
drug
prices;
2. Economic
Standing:
whether
the
country
has
a
similar
economic
standing
to
Canada,
as
measured
by
GDP
per
capita;
and
3. Pharmaceutical
market
characteristics:
whether
the
country
has
similar
market
characteristics
to
Canada,
such
as
population,
consumption,
revenues
and
market
entry
of
new
products.
Source:
Health
Canada
“Protecting
Canadians
from
Excessive
Drug
Prices:
Consulting
on
Proposed
Amendments
to
the
Patented
Medicines
Regulations”,
Ottawa
May
2017
June
2017 3
4. What
is
the
impact
of
International
Reference
Pricing?
• Is
there
evidence
that
lower
prices
delay
product
introduction
in
“low
price”
countries?
June
2017 4
6. Except
for
New
Medicines..
Foreign
Prices
are
already
similar
or
higher
than
Canada
New
med
prices
the
same
or
higher
in
most
other
countries
including
Sweden
&
UK
June
2017 6
7. International
(External)
Reference
Pricing
Pharmaceutical
Reference
Pricing
in
the
U.S.
Delusion
or
a
soon-‐to-‐be
Reality?
April
2016
Ilkka Anhava Ling
Chen
Huiyan Jin Emil
Nedev David
Spellberg.
June
2017 7
10. PMPRB:
Less
Reliance
on
International
Prices?
• PMPRB:
“Given
that
it
is
standard
industry
practice
worldwide
to
insist
that
public
prices
not
reflect
discounts
and
rebates,
should
the
PMPRB
generally
place
less
weight
on
international
public
list
prices
when
determining
the
non-‐excessive
price
ceiling
for
a
drug?”
• International
price
referencing
began
in
Canada
in
1987
(PMPRB
C-‐22
amendments
to
Patent
Act)
• Listing
agreements
and
patient
access
schemes
make
international
price
comparisons
challenging
– but
these
exist
because
of
international
price
referencing
– transparent
pricing
would
result
in
a
downward
spiral
of
prices
– even
if
prices
are
identical
at
launch,
prices
will
inevitably
move
apart
because
of
exchange
rates
June
2017 10
12. Why
are
Canadian
Prices
Relatively
High?
(compared
to
most
other
OECD
countries)
• High
health
expenditures
as
%
of
GDP
lead
to
higher
drug
prices?
• Health
care
is
a
priority
• In
theory,
countries
with
relatively
high
health
expenditure
costs
as
a
proportion
of
their
economy
(%
of
GDP)
may
generate
sufficient
demand
that
support
prices
that
are
also
relatively
higher
than
in
countries
where
health
care
is
less
of
an
economic
priority
• Hypothesis: Countries
with
relatively
high
health
care
expenditures
as
%
of
GDP
should
have
higher
prices
than
countries
that
focus
less
of
their
economy
on
health
– Exclude
countries
with
higher
prices
than
Canada
(USA
and
Mexico)
June
2017 12
13. Foreign-‐to-‐Canadian
Price
Ratios
vs.
Health
Expenditure
as
%
of
GDP
(excluding
prescription
drugs)
Source:
PMPRB
2016
Annual
Report,
OECD.Stat
R²
=
0.56228
0
0.2
0.4
0.6
0.8
1
1.2
4.5% 5.5% 6.5% 7.5% 8.5% 9.5% 10.5% 11.5%
Foreign-‐to-‐Canadian
Price
Ratio
(2015)
Health
Expenditure
as
a
Percentage
of
GDP
(2015)
Linear
regression
analysis
suggests
that
there
is
a
moderate
relationship
between
drug
prices
and
health
expenditures
as
%
GDP
in
OECD
countries
June
2017 13
14. Reservation
Prices
• Reservation (or
reserve) price is
a
term
referring
to
a
limit
on
the price of
a
good
or
a
service.
– On
the
demand
side,
it
is
the
highest price that
a
buyer
is
willing
to
pay;
– On
the
supply
side,
it
is
the
lowest price
at
which
a
seller
is
willing
to
sell
a
good
or
service.
Reservation
Price
Buyer
Reservation
Price
Supplier
Reservation
Price
Supplier
Reservation
Price
Buyer
Negotiation
Possible Negotiation
Not
Possible
Price
è
June
2017 14
15. Germany
AMNOG
Process
• Multi-‐stage
,
multi-‐agency
process
that
can
take
up
to
15
months
Source:
Markus
Jahn,
Novartis
Pharma
GmbH,
Pharma
Pricing
&
Market
Access
Outlook,
March
2012
June
2017 15
16. Top
10
Canadian
Drugs*
without
NZ
Coverage
Brand
Name Generic
Name Therapeutic
Area Year
Listed
In
Ontario
EYLEA aflibercept
Wet
Age-‐related
Macular
Degeneration
2015
ELIQUIS apixaban
Prevention
of
stroke
and
systemic
embolism
2013
PROLIA denosumab Osteoporosis 2012
STELARA ustekinumab Severe
Plaque
Psoriasis 2013
ONGLYZA saxagliptin Type
2
Diabetes 2012
TRIUMEQ dolutegravir
&
abacavir
&
lamivudine HIV 2015
INVOKANA canagliflozin Type
2
Diabetes 2015
LYRICA pregabalin Neuropathic
Pain 2013
TRAJENTA linagliptin Type
2
Diabetes 2012
VYVANSE lisdexamfetamine ADHD,
Eating
Disorders 2011
*Of
new
drugs
listed
in
Ontario
from
Jan.
1,
2011
to
Sept.
2,
2015
June
2017 16
17. International
Prices:
Summary
• Foreign
countries
use
a
variety
of
mechanisms
to
moderate
drug
expenditures
– Most
countries
negotiate
rather
than
regulate
introductory
prices
of
new
medicine
– HTA,
comparative
effectiveness,
cost
effectiveness
influence
price
negotiations
– Some
apply
international
price
referencing
but
not
UK,
Sweden
• Germany,
France
may
use
international
prices
for
price
negotiations
• Japan
uses
international
prices
for
adjustment
purposes
only
• Differences
in
underlying
health
care
systems
and
opaque
price
volume
agreements
make
international
price
comparisons
challenging
– Low
prices,
fixed
budgets
may
result
in
fewer
drugs
available
• PMPRB
has
an
impact
on
prices
of
patented
medicines
although
that
impact
may
not
be
recognized
by
payers
and
consumers
– Prices
on
average
are
below
the
international
median
– Prices
on
average
do
not
increase
– Shifts
in
exchange
rates
can
create
perception
of
higher
prices
– But
PMPRB
does
not
examine
cost
effectiveness
or
affordability
• CADTH
/
INESSS
/
pCPA
directly
addresses
cost-‐effectiveness
/
affordability
June
2017 17
19. Evolution:
Innovation
&
Reimbursement
Traditional
Small
Molecule
Generics
(Bioequivalence)
Interchangeability
Therapeutic
Referencing
Biologics
Large
Molecule
Biosimilars
Interchangeability
???
Cell
&
Gene
Therapies
Similars? ???
June
2017 19
20. Gene
Therapy
• A
set
of
strategies
that
modify
the
expression
of
an
individual’s
genes
or
that
correct
abnormal
genes.
Each
strategy
involves
the
administration
of
a
specific
DNA
(or
RNA).
Source:
American
Society
of
Cell
&
Gene
Therapy
http://www.asgct.org/
Source: Wikimedia Commons
June
2017 20
21. UniQure – Glybera®
(alipogene
tiparvovec)
• Familial
lipoprotein
lipase
deficiency
(ultra
rare
condition)
• Clinical
development
program
for
Glybera consisted
of
– 3
non-‐controlled,
prospective,
open-‐label
clinical
trials
in
27
LPLD
patients.
– Retrospective
case
note
review
of
17
of
the
27
patients
to
determine
the
impact
of
Glybera treatment
on
the
frequency
and
severity
of
pancreatitis
events
(following
completion
of
the
clinical
trials)
• EMA
approval
October
2012
– under
“exceptional
circumstances”
– for
adult
patients
diagnosed
with
• familial
lipoprotein
lipase
deficiency
(LPLD)
confirmed
by
genetic
testing,
and
• suffering
from
severe
or
multiple
pancreatitis
attacks
despite
dietary
fat
restrictions.
• Co-‐marketed
with
Chiesi:
treatment
cost
~1M€
/
patient
• G-‐BA:
– May
2015
Additional
benefit
“not
quantifiable”
• To
date
only
one
patient
reimbursed
for
treatment
with
Glybera
Source:
uniQure.com;
Scrip
June
2017 21
22. STRIMVELIS
for
Bubble
Boy
Syndrome
• STRIMVELIS
(autologous
CD34+
cells
transduced
to
express
ADA) [GSK]
– ADA-‐SCID
(bubble
boy
syndrome)
– Cost:
€594
thousand
for
single
one
time
(curative?)
treatment
• money
back
guarantee
– GSK
has
indicated
that
STRIMVELIS
will
not
be
profitable
• GSK
considering
“different
models”
on
pricing.
– Models
could
include
staggered
payments
and
outcomes
based
arrangements
– Part
of
the
Italian
deal
where
it
is
currently
reimbursed
– Milan
will
serve
all
Euro
patients.
(Source:
FiercePharma August
2016)
A vector carrying the correct copy of a gene. (photo courtesy of GSK)
June
2017 22
23. Cell
Therapy
• Cell
Therapy
– The
administration
of
live
whole
cells
or
maturation
of
a
specific
cell
population
in
a
patient
for
the
treatment
of
a
disease.
– Blood
transfusions
&
bone
marrow
transplants
are
examples
of
established
cell
therapies
Source:
American
Society
of
Cell
&
Gene
Therapy
http://www.asgct.org/
Ethanewadeblog:
New
treatments
for
cancer
and
new
research
June
2017 23
24. Prochymal®
(remestemcel-‐L,
human
mesenchymal
stem
cells
for
IV
infusion)
• Prochymal®
has
received
conditional
approval
in
Japan,
Canada
and
New
Zealand
(2013)
for
treatment
of
children
with
acute
steroid
refractory
GVHD.
– Underlying
AML
being
treated
with
hematopoietic
cell
transplant
• It
is
also
available
in
the
United
States
under
an
Expanded
Access
Program
for
treatment
of
GVHD
in
children
and
adults.
• Conditional
approval
based
on
2
clinical
trials,
including
a
placebo
controlled
RCT
(N-‐28)
• Cost:
estimated
to
be
~
>
$200K
USD
per
treatment
in
the
US
• Mesoblast
acquired
Prochymal
from
Osiris
in
2013
• Commercialized
and
reimbursed
in
Japan
but
not
yet
in
Canada
or
New
Zealand
• As
a
hospital
only
treatment
funding
/
reimbursement
mechanisms
unclear
in
some
markets
(hospital
budgets
not
ready
for
$200K
one
time
payment)
Source:
Mesoblast.com;
Scrip
June
2017 24
25. CAR-‐T
Cell
Therapy
• CAR-‐T
is
a
one
time
treatment
– patient
T-‐cells
genetically
re-‐engineered
to
eradicate
cancer
cells
• Novartis
(leukemia),
Kite
(lymphoma)
are
the
early
leaders
• Very
promising
results
– but
serious
neurotoxicity
concerns
http://labiotech.eu/car-‐t-‐therapy-‐cancer-‐review/
June
2017 25
26. Are
current
HTA
methods
suitable?
• Industry:
current
HTA
methods
may
be
unsuitable
for
assessing
regenerative
and
cell
therapies
• NICE
(UK):
Conducted
a
hypothetical
review
of
a
CAR-‐T
treatment
for
leukemia
• NICE:
'Technology
Appraisals
framework
is
applicable
to
regenerative
medicines
and
cell
therapy
technologies',
but
changes
will
be
required
to
– methods
and
processes,
including
the
discounting
rate,
– price
and
payment
models,
as
well
as
varying
parameters.
June
2017 26
27. Gene
&
Cell
Therapy
HTA
/
Reimbursement
• More
complex
/
uncertain
than
traditional
pharmaceuticals
– Similarities
with
diagnostics
and
devices
• New
cell
&
gene
technologies
will
likely
be
assessed
by
traditional
“national”
HTA
methods,
but:
– HTA
methods
will
need
to
be
updated
/
adapted
– Payment
/
funding
mechanisms
may
be
local
/
regional
– Procedure
and
fee
codes
may
need
to
be
established
– Existing
budgets
may
not
be
sufficient
– Costs
of
ancillary
care,
treating
adverse
reactions
need
consideration
• Treatment
pathways
will
vary
across
jurisdictions
– Treatment
pathway
may
dictate
payment
/
funding
pathway
June
2017 27
28. HTA
of
Cell
&
Regenerative
Treatments
• Technological
breakthrough
≠ Clinical
breakthrough
• Clinical
&
cost
effectiveness
paramount
• Hepatitis
C
drugs
(e.g.,
Sovaldi)
have
provided
HTA
agencies
and
payers
with
experience
assessing
“curative”
technologies
– 90
-‐ 100%
cure
rates
– Open,
single
arm
trials
– One
time
high
cost
treatment,
but
highly
cost
effective
(low
$/QALY)
– Significant
affordability
issues
(large
untreated
patient
population)
• Payers
in
many
markets
have
mechanisms
for
risk
sharing
agreements
– Pay
for
Performance
(P4P)
– Outcomes
based
(e.g.,
Velcade UK)
– Financial:
price
/
volume
agreements
– Alternative
payment
approaches
for
high
cost
“curative”
treatments?
• Annuities,
leasing
models
June
2017 28
30. Consider:
HC
Objectives
of
the
Regulatory
Changes
1. Introduce
new,
economics-‐based
price
regulation
factors
that
would
ensure
prices
reflect
Canada’s
willingness
and
ability-‐to-‐pay
for
drugs
that
provide
demonstrably
better
health
outcomes;
2. Update
the
list
of
countries
used
for
price
comparison
so
that
it
is
more
aligned
with
the
PMPRB’s
consumer
protection
mandate
and
median
OECD
prices;
3. Formalize
a
move
to
a
complaints-‐based
system
of
oversight
for
patented
generics
products
that
are
at
lower
risk
of
excessive
pricing,
reducing
regulatory
burden
for
patentees;
4. Set
out
the
pricing
information
required
of
patentees
to
enable
the
PMPRB
to
operationalize
the
new
pricing
factors;
and
5. Require
patentees
to
provide
the
PMPRB
with
third
party
information
related
to
rebates
and
discounts
on
domestic
prices.
• Based
on
international
best
practices,
the
proposed
amendments
would
provide
the
PMPRB
with
new
regulatory
tools
and
information
to
better
protect
Canadian
consumers
from
excessive
prices
while
reducing
regulatory
burden
on
patentees.
Source:
Health
Canada
“Protecting
Canadians
from
Excessive
Drug
Prices:
Consulting
on
Proposed
Amendments
to
the
Patented
Medicines
Regulations”,
Ottawa
May
2017
June
2017 30
31. Consider
PMPRB
Regulatory
Framework
Item Description Who
can
change/amend
Legislation:
Patent
Act
(s
76.1,
79-‐103)
Empowers
the
PMPRB,
outlines
price
review
factors,
penalties
for
excessive
pricing,
failing
to
file
information
Parliament
Patented
Medicines
Regulations
Outlines
reporting
requirements
&
PMPRB
reference
countries
Governor-‐in-‐council
(federal
cabinet)
PMPRB
Rules of
Practice
&
Procedure
Rules
for
conducting
hearings
PMPRB
(but
are
approved
by
Governor-‐in-‐council)
Guidelines
Excessive
Price
Guidelines
Scientific
Review
Procedures
PMPRB
Enforcement
Policy
PMPRB
(but
must
consult
stakeholders)
Policies
Official
PMPRB
interpretations
of
the
legislation,
regulations,
guidelines
(these
are
generally
published
in
the
PMPRB
Newsletter)
PMPRB
Practices
Un-‐official
interpretations
of
the
legislation,
regulations,
guidelines
PMPRB
staff
June
2017 31
32. Consider:
Federal
Policy
Framework
for
Regulations
1. Canadians
are
consulted
2. Risk
exists,
government
intervention
is
required,
regulation
is
best
alternative
3. Benefits
of
regulation
outweigh
costs
4. Adverse
economic
effects
are
minimized,
no
unnecessary
regulatory
burden
5. International
and
intergovernmental
agreements
are
respected
6. Systems
in
place
to
manage
regulatory
resources
effectively
Source:
Guide
to
Making
Federal
Acts
and
Regulations:
Part
3
-‐ Making
Regulations,
Privy
Council
Office
http://www.pco-‐
bcp.gc.ca/index.asp?lang=eng&page=information&sub=publications&doc=legislation/part3-‐eng.htm
June
2017 32
34. Patients:
Responding
to
the
Consultation
Document
• Remember
the
deadline:
June
28,
2017
• Comments
and
submissions
should
be
patient
focussed
• Consider
the
“Federal
Policy
Framework
for
Regulations”
for
framing
comments
– The
government
must
justify
that
regulation
is
necessary,
that
alternatives
are
not
effective,
benefits
outweigh
costs
and
the
regulatory
burden
is
reasonable
• Insist
on
context
– that
commentary
will
be
most
constructive
where
there
is
an
understanding
of
how
the
regulations
will
be
applied
• Challenge
underlying
assumptions
with
facts
&
evidence,
not
conjecture
• Frame
concerns
so
that
they
resonate
with
government
(and
electorate)
• Be
constructive,
and
where
appropriate,
suggest
alternatives
• Acknowledge
other
stakeholder
positions
but
don’t
“parrot”
positions
of
others
– add
context
where
appropriate
June
2017 34
36. Biography
W.
Neil
Palmer
President
&
Principal
Consultant
PDCI
Market
Access
Inc
Neil.Palmer@pdci.ca
www.pdci.ca
Neil
Palmer
President
and
Principal
Consultant
of
PDCI
Market
Access
Inc.
(PDCI)
a
leading
pricing
and
reimbursement
consultancy
founded
in
1996.
He
leads
a
senior
team
of
market
access
professionals
with
pricing
&
reimbursement
engagements
covering
Canada,
Europe,
and
the
United
States.
Prior
to
PDCI,
Neil
worked
with
the
Canadian
Patented
Medicine
Prices
Review
Board
(PMPRB)
where
his
responsibilities
included
policy
development,
overseeing
the
price
review
of
patented
medicines
and
conducting
economic
research.
Prior
to
the
PMPRB,
he
worked
with
the
Health
Division
of
Statistics
Canada
where
he
was
responsible
for
economic
and
statistical
analysis
of
health
care
costs
and
utilization.
Neil
also
worked
with
RTI
Health
Solutions
(Research
Triangle
Park,
North
Carolina)
where
he
served
as
global
vice
president
for
pricing
and
reimbursement.
After
completing
his
studies
at
the
University
of
Western
Ontario,
Neil
began
his
career
in
Montreal
with
the
research
group
of
the
Kellogg
Centre
for
Advanced
Studies
in
Primary
Care.
He
has
written
extensively
on
pharmaceutical
pricing
and
reimbursement
issues
and
is
a
frequent
speaker
at
conferences
in
North
America
and
Europe.
In
January
2015,
Neil
was
appointed
Adjunct
Assistant
Professor
at
the
University
of
Southern
California
School
of
Pharmacy
graduate
program
in
Health
Care
Decision
Analysis
where
he
lectures
on
health
technology
assessment,
pricing
and
market
access
from
a
global
perspective.
June
2017 36