The mandatory public consultation process must be a tiresome inconvenience for Health Canada policy makers. At least that’s the perception from the release of its proposed amendments to the Patented Medicines Regulations (Regulations) and the accompanying Regulatory Impact Assessment Statement (RIAS) published in Canada Gazette Part I last week. Why else would the proposed amendments be almost identical to proposals initially announced by Minister Philpott back in May 2017?
Health Canada would have us believe that there was broad support for the amendments as initially proposed. We have no way to know for sure, as Health Canada has chosen not to make available the identities or comments of those who participated in the consultation. The RIAS offers only vague, vanilla summaries of the submissions Health Canada received in response to the consultation. While some 30 submissions were voluntarily posted to PDCI’s website by a wide range of stakeholders, dozens more organizations, government entities, academics and patients likely contributed views. From those submissions that were posted on the PDCI website it is evident that there is a range of opinions and concerns. The remaining submissions, however, remain hidden from view, making it impossible to assess level of support and if the submissions influenced policy makers in any way.
There are several troubling issues about what seems to have transpired between the Minister’s announcement in May and the publication of the proposed Regulations and RIAS.
Health Canada assessment continues to ignore 2016 pricing data available to the Patented Medicine Prices Review Board (PMPRB) since February 2017. There is a perception that Health Canada has concealed vital information from the consultation process by delaying release of the 2016 PMPRB Annual Report until the last Friday in October. Historically, the PMPRB Annual Report is submitted to the Minister by the PMPRB on or about May 31 and tabled by the Minister in the House of Commons before it rises for the summer in June.
It is not a coincidence that the 2016 PMPRB Annual Report’s pricing analysis didn’t support the doom and gloom pricing narrative advanced by the Minister in May 2017. Accordingly, “lower prices in 2016” became an inconvenient truth to be kicked down the road until long after the consultation had closed. Would consultation responses have been any different if stakeholders had all the facts? Absolutely – the 2016 Annual Report paints a more favourable picture of where Canadian drug prices are relative to other countries than previous annual reports. And either way, Canadians had the right to know. So much for Health Canada’s commitment to “greater transparency and openness to further strengthen trust in our regulatory decisions.”
Patients are all but ignored. The RIAS doesn’t even acknowledge, much less address, the number one concern of patient groups. Patient groups are concerned that access to some innovative new drugs may be delayed or completely eliminated by punitive price regulations that move Canada well down – or even off – manufacturers’ launch sequence. There is no doubt that the relationship between price levels and availability of innovative medicines is a contentious issue, but it must be acknowledged and assessed in the Canadian context; to do otherwise is disrespectful of the patients and patient groups that took the time and effort to submit their comments and concerns.
Whether the new, lower price rules present barriers to Canadian market entry is a matter that will be assessed for each new drug by global pricing teams of international pharmaceutical companies and the Canadian owned specialty pharmaceutical companies that licence products in from other countries. Ultimately the decisions to introduce new medicines in Canada (or not) will be based on economics and local market conditions and not wishful thinking or pretending a low-price drug regime isn’t a barrier to entry. Moreover, protracted changes in price regulations creates financial uncertainty, a market condition eschewed by risk averse biopharmaceutical firms.
PMPRB has yet to disclose corresponding Guidelines (or at least the approach) that will inform how the new excessive price factors will be implemented to regulate drug prices. This makes it impossible to properly and accurately assess the impact. There is no information as to how cost effectiveness ($/QALY), market size and wealth (GDP) factors will be used in practice. However, these factors plus the expansion of the basket of reference countries combined with the removal of the United States and Switzerland are clearly intended to lower prices in Canada significantly. Curiously, the impact of these changes is estimated in the RIAS’ cost-benefit analysis so it is evident that policy makers have some understanding of how the new factors will be applied, but apparently this information is privileged.
Estimates of administrative costs are absurd and inconsistent. The RIAS cost-benefit analysis estimates the administrative costs to industry. Incredibly, for the approximately 1,250 prescription drug products that will remain under PMPRB jurisdiction, the total incremental cost of sourcing, compiling, verifying and filing drug prices for seven new countries; preparing, updating and filing forecasts for each of the 1,250 drug products; monitoring, sourcing and filing health economic studies will be – drum roll please – $10,319 per year. Total! For all 78 patentees combined! Just $132 dollars each! Of course, the same analysis concludes that the PMPRB will need several million dollars in new funding each year to assess and apply all this readily available “off the shelf” data. If the RIAS had any credibility, it lost it here.
Responsibility for the proposed Regulations lies with Health Canada, not the PMPRB although analysts and policy makers for the two organization would have collaborated closely. The PMPRB will (eventually) release proposed Guidelines for applying the new factors in the form of price tests along with transitional measures. The PMPRB will also (eventually) provide guidance and interpretation documents to support the filing of the new information requirements. Ideally this additional information will be released very shortly so that stakeholders have sufficient time to fully assess the proposed changes. There is a seventy-five-day consultation period (ending on or about February 14, 2018) to respond to the proposed Regulations after which they will be finalized in Canada Gazette II.
It is evident from the response to the first round of consultations that the policy makers have their minds set and that further submissions may be of only limited value unless they reach the political sphere. Indeed, if improvements are to be made to the proposed Regulations (and forthcoming Guidelines), determined, wide-ranging advocacy will be essential to inform and motivate political will.
Neil Palmer is the Founder and Principal Consultant at PDCI Market Access Inc. and a former staffer at PMPRB. The views expressed are his own. No financial support was received from any organization for the preparation of this article.