REIMBURSEMENT, MARKET ACCESS & PRICING

Mike McCarthy, Principal, Grosso McCarthyRobert Kulik, Principal Consultant, Patient Access Solutions Inc.

Payers of Prescription Drugs in Canada Public Payers:

– Federal / Provincial Drug Plans: 65 years and older, social assistance, catastrophic drug costs (income based)

– Hospital in-patients - covered by hospital budget.– Cancer products – separate cancer agencies in Western Canada and Ontario.– Vaccines: provincial public health agencies.– Specific disease programs e.g., MS, hGH, CF, transplant etc.– Blood products: Canadian Blood Services, Hema Quebec.

Private Insurers:– 19.5 million Canadian have access to some form of private insurance coverage.– Employer sponsored drug coverage for employees and their families.– Three insurance companies represent 2/3 of covered “lives” in Canada.

Out of Pocket:– Non-funded medications (i.e. fertility (outside of Quebec), erectile dysfunction etc.).– Co-insurance and deductibles.

Who Pays for What?

Health Technology Assessment in Canada

● The provinces, territories and federal government have centralized health technology assessment (HTA) in Canada where manufacturers must submit a clinical and economic dosser for evaluation. Three programs:

1. Common Drug Review (CDR).2. Pan Canadian Oncology Drug Review (pCODR).3. Quebec’s Institut national d'excellence en santé et en services sociaux (INESSS).

● Unlike Health Canada, the HTA body asks manufacturers: Are the new product’s efficacy, safety/tolerability benefits worth paying for in the

population of patients covered under our programs? Can we rely on the data presented to be certain the reported benefits will be realized

in the real world? HTA bodies only make recommendations for funding; final decisions

rest with the provincial, territorial and federal drug plans. In Quebec, INESSS makes funding recommendations directly to the Minister of Health.

Private Payers

Public Payers

Health Technology AssessmentCDR/pCODR

9 Provincial 5 Federal and 3 Territorial Drug

PlanDecisions

Managed23%

Open70%

Institut national d'excellence en santé et en services sociaux (INESSS)

Québec Decision

Market Access in Canada – Choose Your Adventure!

Pan Canadian Pricing Alliance NegotiationsNote: Quebec has just joined pCPA

Getting The Basics Right the First Time

Submission

Health Economics

BIAs

Clinical Dossier

Pricing

CDRPMPRB

Private PayersINESSS

Patient Services

GR/PR

Charting a Course for Market Access

Limited resources means prioritizing activities and making tough decisions – you can’t do everything

Quickly identifying where the business comes from

Speed - maximizing every day “on formulary”

Hoops and Hurdles

Provinces are struggling with budgets Price of niche/orphan drugs - Sticker shock versus

true budget impact Growing concern with pipeline and line extensions of

niche and orphan products Fear of establishing funding precedent:

– Looking at PII and PIII clinical development programs and applying limited information to funding decisions

Questions relating to fair return on investment are beginning to be raised by some jurisdictions

Influencing Government

Behind the scenes bureaucrats run the day-to-day business of government

To influence them you must:– Identify the key stakeholders, both within

government and externally– Align your objectives with their priorities– identify who and what will impact them– Build a case that demonstrates mutual benefit

Mobilizing the Patient Community

Has proven to date to be the most effective way to influence negotiations at all levels (PCPA and provincial coverage)

puts public pressure on governments for a favourable outcome

Traditional media, social media and direct engagement have all proven effective

Important for companies to remain arms length

pCPA Background

Initially driven by Ontario’s former Premier Dalton McGuinty

Announced following the 2010 annual Premiers’ Council of the Federation

Work is undertaken at the Council of the Federation’s Health Care Innovation Working Group

Provinces alternate leading the group with Ontario and Nova Scotia currently leading

pCPA Process

Source: Pan-Canadian Pricing Alliance, The “Goliath of Market Access, October 2013

pCPA Challenges Differences in public drug plan structures, priorities and goals Existing confidential product listing agreements add complexity Lack of a formal process or governance structure

– Lack of transparency and vehicle for broader public communication and input

– Stakeholder uncertainty as a results– No dedicated resources

Participation on individual negotiations by Provinces/Territories is not mandatory

Time to listing after completed negotiations varies across jurisdictions

Need for Provinces/Territories to maintain their decision making authority

pCPA and Niche/Orphan Products

pCPA can be both a blessing and a curse for small biopharmaceutical companies

Current structure best suited for products that deal with larger populations

Niche/orphan products very complicated – difficult to operationalize an agreement at the pan-Canadian table

pCPA Continued

Difficult to come to an innovative agreements with so many players – very tough job for lead province,

Price, Price, Price No one in charge and everyone is in charge

– where is the decision-maker? Hopeful for resolution following current

consultation process

As of September 30 2014:

• 48 pCPA negotiations completed• There are 9 negotiations currently underway• The PCPA has recommended that negotiations for 9

brand name drug products be considered by each Province/Territory individually

• There are 16 drug products for which the PCPA has decided not to negotiate collectively or individually at the provincial-territorial level

Final thoughts

Need to find ways to bridge the gap between the requirements of small biopharmaceutical companies and tough choices that governments make

Important to illustrate the challenges of the small company to government – understand unique perspectives

Need to work honestly, transparently, and with mutual respect.

Orphan Medications in Canada

All governments are struggling with health care budgets – Canada not an exception.

Challenges with funding new and innovative therapies – orphan/rare disease medications continues to be an important subject in Canadian pharmaceutical policy discussions.

Canada does not have an Orphan Drug/rare disease policy like many other developed countries.

Orphan medications are reviewed through the same health technology review process in Canada as drugs for more “common” diseases.

Health Canada is developing a framework for the designation, authorization and monitoring of orphan drugs.

The province are also working on a funding framework.

Provincial and Territorial Orphan Drug Funding Initiative

The provinces are also working on a funding framework for orphan medications.

April 2014, the Minister of Health of Alberta announced that the provincial and territorial governments would work together to establish a national framework for a pan-Canadian approach for coverage of orphan drugs. Alberta lead the efforts to examine potential funding mechanisms.

In September 2014, provincial and territorial ministers of health announced the establishment of a working group led by Alberta, British Columbia and Ontario to explore how to manage the cost of rare disease drug therapies with evidence-based approaches to funding.

Thank You

Michael McCarthyGrosso McCarthy65 Queen Street WestSuite 2010, P.O. Box 68Toronto, ON M5H 2M5mmccarthy@grossomccarthy.com416.362.6141

Robert KulikPatient Access Solutions Inc.55 Princeton RoadToronto, ON M8X 2E3Robert@patientsolutions.ca416-884-3141