Pharmaceutical Marketing Club of Quebec

Russell Williams

President

Canada’s Research-Based Pharmaceutical Companies (Rx&D)

Rx&D - Who we are

• National association for Canada’s research-based pharmaceutical community

• A voice for the pharmaceutical industry in Quebec and accross Canada since 1914

Mission

Advocate for policies that will bring the best innovative medicines and vaccines to Canadians in a timely and appropriate manner

Improve Canada's global competitiveness

Make Canada a world leader in attracting pharmaceutical and biotechnology investments, which are key components of the knowledge-based economy.

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Industry Overview

• Rx&D represents 15,000 men and women in the innovative, knowledge-intensive, pharmaceutical industry.

• Our members contribute to the investment of over $1 billion annually in health R&D.

• Rx&D member companies are the leading funder and performer of therapeutic products research and are the largest single source of health R&D research in the Canadian business enterprise sector.1

• Every year, about one in 5 research dollars are invested in hospitals and universities.2

2. PMPRB Annual Reports

1. Statistics Canada Science Statistics, Estimates of total spending on R&D in the health field in Canada, 1989 to 2006, March 30, 2007 3

Positive associations with the industry

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Negative associations with the industry

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Rx&D Members R&D-to-Sales Ratio averages 9.97% over 21 years (1988 to 2009)

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02468

101214

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Ave

rage

R&

D a

s %

of

Sale

s

All Patentees Rx&D Members Only

Source: Patented Medicines Prices Review Board (1988 – 2009)

Following changes to the patent laws in 1993, Rx&D member companies have consistently maintained a higher R&D-to-sales ratio than all patentees combined.

Despite challenges in the domestic environment in recent years (CDR, PMPRB, price freezes), the innovative pharmaceutical industry has maintained an overall R&D-to-sales ratio of nearly 10% since the change of patent laws in 1987.

Total R&D Expenditures to Total Sales Revenue1988 – 2009 in $M (PMPRB Reporting companies)

Source: Patented Medicines Prices Review Board (1988 – 2009)7

Challenges

• Access to medicines

• Patent Cliff

• Global competition

• IP

• Perception/understanding

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

PL NZ LU ES JP TR

CA A

ve.

KR SCT IE AU CZ IC NL

ROW

Ave

.D

K FI AT

CH SK GB SE BE FR IT NO DE

GR PT US

International - Positive Reimbursement PercentagesBased on Canadian Drug List

Source: Wyatt Health Management

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The Pharmaceutical Sector – Innovation Gap Getting Wider

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Global competition

Source: Thiers, Fabio, Anthony J. Sinskey, Ernst R Berndt. “Trends in the Globalization of Clinical Trials” in Nature Reviews Drug Discovery, 7: 13-14, January 2008.

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Drug Development Life Cycle

20 YEARS

Molecule Development

1O YEARS

Health CanadaReview

1-1.5 YEARS

CDR Review

0.5 YEARS

Provincial Review

1 YEAR

Market Exclusivity

7-9 YEARS*

54% Private

46%

Public

$ PMPRB $

PMPRB = Patented Medicine Prices Review Board

CDR = Common Drug Review

5-7 YEARS*

*If Listed Right Away

ACTORS IN THE DRUG DECISION-MAKING PROCESS AND THEIR QUESTIONS (not exhaustive)

HEALTH CANADA

COMMON DRUG REVIEW – CANADIAN EXPERT DRUG ADVISORY PANEL

CADTHTHERAPEUTIC REVIEW PANEL

PATIENTS and HEALTH CARE PROFESSIONALS

PAYORS DRUG SAFETY AND EFFECTIVENESS NETWORK

CLINICAL EFFICACY and SAFETY

Has the intervention proven to be effectivein controlled clinicaltrials? Is the new drug, efficacious, safe and of high quality?

How well does a drug relieve symptoms of a specific medical condition in relation to its associated risks?

COST EFFECTIVENESS

Is the intervention efficient?

Is the incremental benefit gained from the new drug worth its incremental cost?

COMPARATIVE CLINICAL EFFECTIVENESS

How does ‘real world’ use of this therapy work in comparison to its clinical efficacy measured by controlled trials? OR

How well do two or more drugs work in comparison to one another when treating the same condition?

Is the intervention available, safe, affordable?

What care would I like my loved one to receive?

What represents value to me?

Am I free to exercise my clinical judgment?

Do I have access to appropriate resources/evidence to make the best clinical choice?

Which one therapy works best for a specific medical condition?

Is the care necessary,meaning is it necessaryto ensure normalfunction or toprotect life?

Is it possible to leavethe care up to individualresponsibility?

Will this make a difference?

COMPARATIVE EFFECTIVENESS

What treatment works best for which patient under which circumstances?

This is not as simple as saying A is better than B. e.g. Are there more benefits with new drug compared to competing alternatives or standard care?

MHPD take-up of HTA/CER research: Will HTA and/or CER influence life-cycle management or also influence pre-market considerations regarding drug candidates under review? Types of trials?

What elements / factors other than QALYs be introduced into HTA?

Is this feasible?

In what % of recently approved drugs have randomized active-clinical trials (RaCTs) been conducted?

Is this feasible?

Population or Patient-Centred Care?

How big of a role does government play in what is largely a decision made between a health care professional and a patient?

HTAs are only one factor used by payors in their decision-making process.

That said, HTAs and CDR recommendations are relatively more transparent than other factors public plans may consider – but improvements can be made.

Payor take-up and understanding of CER / DSEN output:

Which one works for the ‘most people’? Greatest good for greatest number?

Best we can, with what we got?

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Opportunities

• CETA

• Streamlining regulatory review process

• Broadening access to medicines

• Building trust

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Comparison of Canadian and Non-Canadian Bio/pharmaceutical IP Regimes

European Union (27 Member States)

Canada United States Other Countries

Right

of

Appeal

No “linkage” regimes like in Canada or in US.

However, provisional measures (e.g. interlocutory relief ) also available in EU to prevent patent infringement.

PM (NOC) Regulations that link market approval to patent validity.

No provisional measures available.

Inequities in “linkage regime” (e.g. no right of appeal for innovators) favor generic manufactures over innovators.

Linkage regime similar to Canada’s (the “Hatch-Waxman” system)

Absence of problematic inequities: e.g. innovators have a right of appeal.

Provisional measures available.

Canada and US are only major countries with “linkage” regimes.

Data Exclusivity

10 years exclusivity

+

1 Year extension for new indications

8 years exclusivity

No extension for new indications

Chemical Entities Biologics 5 years exclusivity + FDA approval time (1+ years) + 3 year extension for new indications

Japan: 8 years equivalent +

4 year new indications

South Korea: 5 year exclusivity +

3 year extension for

new indications

Switzerland: 10 years

Patent

Term Restoration

Maximum 5 years additional market exclusivity.

Maximum combined patent/ Supplemental Protection Certificates (SPC) post-approval market exclusivity of 15 years.

None

Maximum 5 years additional market exclusivity.

Maximum combined post-approval market exclusivity

14 years.

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Coalition for Action on Innovation Canada – Action Plan for Prosperity

6. Speed adoption of innovative products and services

7. Launch a National Learning and Innovation Initiative

8. Seek out the best and brightest

9. Nurture and strengthen innovation clusters

10. Ensure ongoing advocacy for innovation

Source: Coalition for Action on Innovation in Canada, October 2010 Report

1. Reform tax support for research and development

2. Expand the pool of risk capital

3. Adopt the world’s strongest IP regime

4. Strengthen business-academic links

5. Tap private-sector expertise when spending public money

Ten Steps Towards a More Innovative Canada:

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Raising the bar

Established in 1988

Sets the standard for corporate responsibility

Based on 11 guiding principles

Transparency Guidelines17

Looking ahead- Our challenge

• DEMONSTRATING OUR VALUE

• Health care system sustainability

• Improving outcomes

• Fighting chronic disease

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Looking ahead

• Collaboration is key. We can’t do it alone.

• Building partnerships with Government, stakeholders, public and private sectors

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Looking ahead

• Be bold and innovative

• Build the knowledge-based economy.

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Building the knowledge-based economy

• Attracting investments

• Attracting people

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Questions?

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