Transparent Public Pricing for Biosimilars: pCPA Releases First Principles for SEBs

Guest Blog By Arvind Mani

Director of Market Access and Policy Research

PDCI Market Access

The pan-Canadian Pharmaceutical Alliance (pCPA) recently issued a communiqué outlining their initial perspective on subsequent entry biologics (SEBs) and innovative/reference biologics as it aims to establish a SEB policy framework.

 Key Takeaways

It appears that the pCPA’s first principles for SEBs are targeted at ensuring that manufacturers of both SEB and innovative/reference products must negotiate with the pCPA – i.e. not approach individual jurisdictions to seek product listing agreements once the SEB is poised to enter the market.  Further, SEB manufacturers must be prepared for the pCPA to consider evidence beyond regulatory evaluations and health technology assessments (HTA) – perhaps this may involve reviewing international evidence.  Although this may create some uncertainty for SEB manufacturers, it appears that the pCPA balances this with a plan to ensure a competitive market – which may mean some form of preferential listing similar to what was negotiated for Inflectra. 

For manufacturers of innovative/reference biologics, these principles have clarified the pCPA’s expectations by insisting if these manufacturers put forward proposals in response to the entry of an SEB, these proposals provide national value with no incremental costs to any jurisdictions. 

Finally, the pCPA is clearly moving towards transparent prices for both SEB manufacturers and innovative/reference manufacturers who aim to renegotiate their agreements with the pCPA in anticipation of an SEB entry.  Although confidential product listing agreements are well entrenched and growing in importance for innovative products, it seems that when it comes to the SEB market, public payers are keenly focused on establishing a framework that ensures a greater level of price transparency. 

The table below summarizes pCPA’s negotiation expectations for the respective manufacturers in the SEB marketplace.

SEB Manufacturers	Innovative/Reference Drug       Manufacturer
National Negotiation –must not approach an  individual jurisdiction and should focus its negotiation efforts nationally with the pCPA.	National Negotiation –must not approach an individual jurisdiction and focus its negotiation nationally with the pCPA.
Broader Evidence –must be prepared for the pCPA to look at other evidence beyond the Health Canada and HTA information available.	National Value –must seek negotiations focusing on national value – i.e. no incremental costs to any individual province.
Competitive Environment –may benefit from the pCPA ensuring the creation of a competitive environment.	Transparent Price –must be prepared to not only provide a similar value to the SEB, but must include a similar or better transparent price.
Transparent Price –must provide a reduced transparent price.

pCPA First Principles for SEBs (actual communiqué)

The emergence of SEBs in the Canadian market has led the pan-Canadian Pharmaceutical Alliance (pCPA) to begin developing principles to guide more consistent negotiations for these products and related reference biologics, as the pCPA works towards establishment of a SEB policy framework.

The following first principles will guide the pCPA approach to negotiations on SEBs and reference biologics:

·         All SEB and reference biologic manufacturer proposals will only be considered through the national pCPA negotiation process rather than individual or selected jurisdictions. Determination of whether or not to proceed with negotiations with the requesting manufacturer will be made at the discretion of the pCPA.

·         Products under consideration by the pCPA will be informed by Health Canada's regulatory determinations (that the SEB products are safe and efficacious with no clinically meaningful differences with the comparator reference drugs), Health Technology Assessment recommendations, and/or other evidence or considerations as available.

·         Consistent with its mandate that includes increasing patient access to clinically and cost-effective drug treatment options, the pCPA will encourage a competitive environment that includes SEB market growth and is conducive to long-term cost reductions and sustainability for public drug plans.

·         The introduction of an SEB must provide a reduction in the drug’stransparent price to benefit all Canadians.

·         Proposals from reference biologic manufacturers will only be considered if they:

·         Provide overall national value to public drug plans and do not result inincremental costs to individual jurisdictions; and

·         Provide at least similar overall value compared to the SEB, and must include similar or better transparent price reductions if equivalent listing status is sought.

·         These first principles are a starting point and are expected to evolve through the pCPA’s engagement with stakeholders, including the pharmaceutical industry, to develop a more comprehensive SEB policy framework.

Why medical marijuana should be exempt from sales tax

The authors are members of the Canadian Medical Cannabis Council patient advisory committee: Lynne Belle-Isle (Canadian AIDS Society), Joanne Simons (Arthritis Society), Cody Lindsay (The Wellness Soldier), Jonathan Zaid (Canadians for Fair Access to Medical Marijuana), Sharon Baxter (Canadian Hospice Palliative Care Association), Sandy Smeenk (Improving the Lives of Children) and Jackie Manthorne (Canadian Cancer Survivor Network).

While Canada engages in complex dialogue about how best to regulate the sale of cannabis for adult use, tens of thousands of Canadians are currently authorized to use cannabis to treat a variety of symptoms and medical conditions. They have obtained this authorization from a physician or nurse practitioner, the only way they can use it legally under current regulations.

Research funded by the University of British Columbia’s Institute for Healthy Living and Chronic Disease Prevention has shown that for many Canadians with chronic medical conditions, a lack of affordability can be a barrier to using cannabis for medical purposes. Sales tax on medical cannabis only adds to the financial burden.

Among research participants who reported buying cannabis for medical purposes, the median amount spent was $200 a month. Likewise, more than half of respondents who currently use cannabis for medical purposes report that they can never or only sometimes afford to buy enough cannabis to relieve their symptoms. The proportion was higher – approximately two-thirds – among those who reported fair to poor general health. Perhaps more importantly, a third of respondents stated that they often or always have to choose between medical cannabis and other necessities, such as food, rent and other medicines.

Health Canada has reiterated that cannabis should be treated like other prescription drugs. Canada’s Excise Tax Act specifies that drugs prescribed by a health-care practitioner that are not available over the counter are zero-rated and not subject to federal and provincial tax. Under the Marihuana for Medical Purposes Regulations, medical cannabis can only be purchased with a medical document obtained from a health-care practitioner. This medical document has been acknowledged as being akin to a prescription by the Colleges of Physicians and Surgeons in Ontario, British Columbia, New Brunswick, Nova Scotia, Quebec and Saskatchewan.

While Canada will likely benefit greatly from the sales tax revenue from the legal adult recreational cannabis market, this should not come at the expense of people who need it for medical purposes. With sales tax unfairly applied and few cost-coverage options available, patients who cannot afford their medicine are suffering.

The removal of sales tax from medical cannabis is a simple and effective first step to increase affordability.

The Canadian Medical Cannabis Council has taken an active leadership role in advocating for this straightforward but critical change. Interim executive director Philippe Lucas has already met with the Ministry of Finance, making the case that removing this financial barrier for those who rely on legal medical cannabis is a low cost, non-controversial investment in the well-being of Canadian patients with a high level of public support, as demonstrated by the 8,000-plus signatures gathered so far in a petition to that end.

As members of CMCC’s patient advisory committee, we represent the interests of people who use cannabis for medical purposes. Together, we join the growing number of voices calling for the minister to treat medical cannabis like other medical necessities and exempt it from sales tax.

Medical cannabis is not just another commodity. For many people, it’s a medical necessity. It should receive the same zero-rating as other prescription medications.