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.

Feds Take a Seat at the pCPA Table

Reposted with permission from the author, Arvind Mani. 

On January 20-21, 2016, the provincial Ministers of Health met in British Columbia to discuss health care priorities and were joined for their second day of meetings by Canada’s new federal Minister of Health, Jane Philpott.  At the conclusion of their meetings, it was announced that the federal government will be joining:

1.  The pan-Canadian Pharmaceutical Alliance (pCPA)
2. Federal/Provincial/Territorial (F/P/T) Working Group on Pharmaceuticals  

Implications

Pharmaceutical Manufacturer

• Steeper Rebates: Although the federal Non-Insured Health Benefit (NIHB) program has been negotiating product listing agreement with manufacturers for the past several years, this formal inclusion will likely increase the level of rebates offered to the federal plans.

• Reduced Administrative Burden: There will be less administrative burden for manufacturers as they no longer need to separate negotiations between the pCPA and the federal plans.

The pan-Canadian Pharmaceutical Alliance 

• Capacity: The pCPA will now have another jurisdiction that can take the lead on pCPA negotiations.
• Funding: Although no formal funding mechanism has yet to be established for the new pCPA office, including the federal government provides another source of potential funding for the office lead initiative.

Health System Reform

• Intergovernmental Collaboration: The pCPA will now be a well-integrated F/P/T collaboration that will directly impact the reimbursement of prescription medications and could lay the groundwork for more bold initiatives surrounding a national formulary or catastrophic drug coverage program.

Background

1.  Federal government Joins the pCPA  

The Canadian federal government joins Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Ontario, Quebec, Prince Edward Island, Saskatchewan, and the Yukon as a participating member of the Alliance.  Through various programs described below, the federal governments spends approximately $630 million in drug-related spending on an annual basis. 

The Government of Canada federal drug plans provides drug benefits to:

First Nations and Inuit: The Non-Insured Health Benefits (NIHB) Program of Health Canada provides supplementary health benefits, including prescription and non-prescription drugs, to approximately 808,686 registered First Nations and recognized Inuit to meet medical or dental needs not covered by provincial, territorial or other third-party health insurance.

Veterans: The Health Care Program of Veterans Affairs Canada (VAC) provides veterans and other eligible clients with health-related products and services. VAC's Prescription Drug Program is the second largest of the federal programs, serving eligible veterans and former members of the Canadian Forces. Each year 83,000 clients of 132,000 eligible members access VAC prescription drug benefits.

Canadian Forces: The Canadian Forces Health Services (CFHS) is the designated health care provider for Canada's military personnel, delivering medical and dental services at military installations across Canada and overseas. The Canadian Forces Health Services (CFHS) provides health care and services to95,000 Regular and Reserve Forces personnel in two distinct contexts: at home, which is referred to as in-garrison, and on deployment.

Federal Inmates: Correctional Service Canada (CSC) is the federal government agency responsible for administering correctional sentences for terms of two years or more, as imposed by a court. On any given day CSC is responsible for approximately 23,000 offenders, approximately 15,140 of whom are incarcerated (receiving direct health services in CSC institutions) and 7,750 of whom are on conditional release in the community (receiving health services in the community).

1. Federal-Provincial-Territorial (F/P/T) Working Group on Pharmaceuticals

The federal government has been invited by Ontario to join an F/P/T working group on pharmaceuticals which aims to consider “a range of other measures to reduce pharmaceutical prices and improve prescribing and appropriate use of drugs, while striving to improve health outcomes.” The working group will also “explore approaches to improving coverage and access to prescription drugs for Canadians.”

In June 2015, a meeting of the provincial health ministers resulted in a call to have some form of national pharmacare by several provincial and territorial health ministers.  While the Minister of Health for Ontario appeared to be strongly supporting some form of pharmacare and has initiated provincial consultation sessions on this subject, it is unclear how committed other provinces are to this notion. In fact, some of the other health ministers at the June meeting said federal leadership is crucial to efforts to create a universal pharmacare system

The topic of a national pharmacare program was not on the agenda of the Health Ministers meeting but it appears that the creation of this working group is aimed at addressing some of the key issues associated with prescription drugs – namely improving coverage and access for all Canadians.

Written by Arvind Mani.