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Canadian payers "reject over 50% of new drugs each year"
  06 April 2010
Every year, Canada's centralised review body, the Common Drug Review (CDR), rejects the majority of new drugs put forward for coverage by the nation's publicly-funded drug plans, largely because their makers have failed to address problems raised by other health technology assessment agencies (HTA) such as NICE, a leading expert says.
Moreover, for almost all products which the CDR does recommend, the decision comes with restrictions, Neil Palmer, president of pricing and reimbursement consultancy PDCI Market Access, told a recent conference in London.
The drug plans run by Canada's 10 provinces and three territories account for 45% of the nation's total spending on prescription drugs, and their share reached an estimated C$11.4 billion in 2009, according to the Canadian Institute for Health Information (CIHI). The CDR advises the plans (apart from Quebec's) as to which products they should cover, based on clinical and pharmacoeconomic reviews but not budget impact - this is assessed by each individual plan.
The provinces have been slow to implement positive CDR recommendations largely because of budget concerns, but they have begun addressing these through negotiating various types of agreements with manufacturers, and in some provinces such deals are now a requirement for listing, Mr Palmer told the conference, which was organised by Health Network Communications.
For example, Ontario's Transparent Drug System for Patients Act of 2006 created an "executive officer" position that could negotiate and implement agreements with manufacturers.
A number of studies have concluded that the CDR is "more restrictive" than other HTA agencies, said Mr Palmer. For example a recent comparison of the decisions taken for 64 drugs by the CDR and the Scottish Medicines Consortium (CMR) found that the Canadian agency recommended just 1.6% of the products for listing, while the SMC recommended 34.4%. The percentages for "list with restrictions" and "do not list" were 51.6% and 46.9% respectively for the CDR, compared with 43.8% and 21.9% for the Scottish agency.
Analysis suggests that the CDR "is unconvinced" that new products offer incremental value when older, less expensive alternatives are available. And, while Canada has no official incremental cost-effectiveness ratio threshold, the probability of rejection increases speedily once it goes over C$50,000 per Quality-Adjusted Life Year (QALY) and is almost certain above C$70,000 per QALY, said Mr Palmer.
- Health Canada takes an average of 388 days to approve a new drug, after which the provinces take a further 316 days to decide whether to include it on their drug programmes. Moreover, by the end of 2009, only 23% of new drugs approved by Health Canada in 2004 had been approved for either full or partial reimbursement under provincial drug plans, according to a report published last month by Canadian free-market think tank The Fraser Institute.
"In the end, the provinces usually choose not to cover these drugs, leaving the one-third of Canadians who rely on provincial drug plans without access to most new medicines," said report co-author Mark Rovere, a senior policy analyst at the Institute.
One solution to this problem, he suggests, could be for Canada to take better advantage of the regulatory knowledge and capacity of other jurisdictions, rather than attempting to duplicate the drug approval process used by the US Food and Drug Administration (FDA). By entering into agreements of mutual recognition with other countries, new medications already approved in those countries could be introduced into the Canadian market far more rapidly, he proposes.
Moreover, the report says, the most economically rational way to improve access to new medicines without increasing the burden on taxpayers would be to replace the publicly-funded drug programmes with means-tested, subsidised access to a "a properly regulated, competitive private-sector insurance market."
"The best policy choice for improving access to the newest prescription drugs is to allow the private insurance market to compete through price and service," says Mr Rovere.
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