Pan-Canadian Pricing Alliance (PCPA) The Goliath of Market Access. October 2013
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- Nathaniel McGee
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1 Pan-Canadian Pricing Alliance (PCPA) The Goliath of Market Access October 2013
2 Presentation Agenda: PCPA Genesis, Evolution Lessons Learned Decision Process Navigation Advice What s Next? 2
3 How did we get here? Canadians and governments want consistent access to medications across the country. All public drug funders facing the same issues; value, affordability and sustainability. Rising costs increased the need to negotiate terms to improve value to the system. Industry s need for confidential prices and the paradigm of product listing agreements. 3
4 How did it work before PCPA? Manufacturer submits Health Canada issues NOC and DIN Manufacturer submits pcodr products CDR products Non pcodr, Non CDR Province specific review where applicable Yes decisions and No decisions Jurisdictional decision Variation across jurisdictions in terms of: Listing status Drug cost Coverage criteria Product listing agreement 4
5 PCPA Genesis Announced by Premiers (Aug 2010) at Council of Federation (COF). Currently led by Nova Scotia and Ontario. Purpose: to examine opportunities to conduct joint provincial/territorial (P/T) negotiations for brand name drug products. Overall objective: Improved patient outcomes leading to good value to the health care system = Sustainability 5
6 Goals of PCPA To increase access to drug treatment options To improve the consistency of drug listing decisions across the country To capitalize on combined buying power of jurisdictions To achieve consistent pricing and lower drug costs Reduce duplication of negotiations and improve utilization of resources 6
7 Evolution of PCPA P/Ts agreed to conduct joint negotiations for select drug products to determine if the approach was feasible on a broader scale. To date, P/Ts have completed 23 joint negotiations (for 21 brand name drug products). An additional 12 drug products are under active negotiations In early agreement all drug products reviewed through the CDR and pcodr will be considered by the PCPA for a harmonized decision on whether negotiations should occur. Organic development of a process and framework to guide negotiations 7
8 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 8
9 PCPA Successes Answering the initial question put forward by Premiers yes, 10 jurisdictions (Ministries and Cancer Agencies) can collaborate effectively despite all the challenges Commitment to improve consistency and efficiency of the process Improving timelines earlier initiation of contact, development of templates and experience Almost all jurisdictions have led or are leading a negotiation Recognition of need for continued improvements, evaluation and a formal process and governance structure (work being conducted by IBM) 9
10 De-bunking the Goliath myth Engagement Process Timelines Post-LOI Concessions 10
11 Scope of PCPA Process Manufacturer submits Health Canada issues NOC and DIN Manufacturer submits Up to 2 years Non-transparent pcodr products CDR products Non pcodr, Non CDR Up to 1 year Province specific review where applicable Yes decisions and No decisions No Negotiations, collective or individual No PCPA Pan Canadian Negotiations Confirm participation and lead jurisdiction PCPA informs manufacturer of decision Yes LOI signed PLA with individual jurisdictions Dealt with at the P/T levels PCPA PROCESS 11
12 Jurisdictional Engagement Jurisdictions declare their intent to participate before the negotiation process begins ( in or out of negotiations). All jurisdictions tend to be in for all new drugs. Participating in negotiations does not guarantee an eventual listing agreement decision to list made at the P/T level. Being in implies that if an agreement is reached (LOI signed), and a P/T decision is made to list, the product will be listed at the agreed upon price, listing criteria. Jurisdictions may choose to be out if for example, they: - already have an agreement for the drug in question; OR - Have an agreement in place for a competing product. Opting out of negotiations indicates that a jurisdiction will not engage in negotiations at the P/T level. 12
13 PCPA Initiation: General Process & Timelines Confirm no negotiation on DO NOT LIST files Recommendation Issued (CDR, pcodr) Tabled at next PCPA bi-weekly teleconference Participation confirmed and lead assigned Letter sent to Mfr informing of decision 2 weeks 2 weeks 2 weeks Negotiation Variable 13
14 Negotiation Timelines There are currently no set timelines for negotiation Dependent on many factors: Requirement for non-disclosure agreements Timeline for offer to be presented Requirement for Global sign-offs Complexity of proposal Needs of both parties (how far apart are we at outset) Number of times a counter-proposal is required Experience demonstrates that negotiations can last anywhere between several weeks to 6+ months Formal prioritization of drug products not yet necessary. 14
15 Not all Negotiations are Created Equally FINAL RECOMMENDATION (perc, CDEC) LIST LIST IN A SIMILAR MANNER LIST WITH CRITERIA / CONDITIONS LIST IF COST EFFECTIVENESS IMPROVED DO NOT LIST AT SUBMITTED PRICE DO NOT LIST CLINICAL/COST EFFECTIVENESS Pan-CANADIAN PRICING ALLIANCE NEGOTIATIONS TIME TO DECISION CLEAR RECOMMENDATIONS TYPICALLY QUICKER INDIVIDUAL JURISDICTIONS DIFFICULT/LENGTHY NEGOTIATIONS CLINICAL/COST EFFECTIVENESS UNCERTAIN DO NOT NEGOTIATE AFFORDABLE? TYPICALLY A PRIORITY TO NEGOTIATE AND LIST COMPETING PRIORITIES AND UNIQUE PROVINCIAL CIRCUMSTANCES DICTATE 15
16 Additional Concessions post LOI The Letter of Intent specifies the financial terms and where applicable, the listing criteria of any subsequent PLA. Some jurisdictions may have specific requirements for additional terms, outside of price and criteria: - Wholesale mark-ups; - Duration of agreements; - Requirements around future price increases; - Others? A function of individual drug plan design or provincial legislative requirements. Working to identify inconsistencies and build them into the standard Letter of Intent. 16
17 Our Advice on Best Practices Strive for a Gold Star recommendation from CDR/pCODR (positive clinical and cost effectiveness). Take advantage of national review process opportunities for reconsideration. Only communicate with the lead jurisdiction during active negotiations. Be prepared with a clear, concise proposal outlining the value of the offer to all jurisdictions. Ensure that any rebate or risk-sharing calculation is simple and easy to administer. 17
18 What s next? Process continues to evolve as jurisdictions gain more experience with collective negotiations Continue to work on streamlining the current process and identifying opportunities for increased efficiencies Agreement that the development of a permanent and formal operating structure should be considered. Request For Services (RFS) issued and awarded to IBM Scope: to develop options for the implementation of a permanent process and formal operating structure for this initiative. 18
19 Key Deliverables of IBM s work Review and analyze the current approach to Pan-Canadian negotiations and best practices internationally Consult key stakeholders including the participating jurisdictions, pharmaceutical industry, patient groups, national review bodies Develop the elements of a pan-canadian negotiation process and framework Develop options for a suitable governance and organizational model/structure to support pan-canadian negotiations Develop implementation and evaluation plans Final report expected by the end of
20 Snapshot of initial feedback Role, mandate and goals of PCPA need to be more explicit Greater transparency and communications around process, decisions, criteria and timelines Need for streamlining and formalizing the process and developing clear criteria and metrics Need for sufficient resources Discussion around when engagement should begin Opportunity for patient input Clear timelines for each step of the process Inconsistency in time to list after the pan-canadian process has been completed Concerns regarding a PCPA no 20
21 Going Forward Completion of IBM project by end of 2013 One key piece to inform the direction going forward Report back to Council of Federation Develop a more strategic, comprehensive and coordinated approach to pharmaceutical management in Canada, including both generic and brand name products. Approach must consider current pan-canadian successes and challenges Recognition that we are participants in a global pharmaceutical market International alignment/collaboration both from a regulatory as well as public reimbursement perspective Continued engagement with stakeholders 21
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