Insurers align with government on proposed drug price reform

CLHIA head Stephen Frank says providers are in full support of proposed amendments by Health Canada

Insurers align with government on proposed drug price reform
Canada’s main life and health insurance body the CLHIA has thrown its support behind proposed regulatory changes for patented medicine across the country. On December 2, Health Canada published Canada Gazette Part 1,
which launched a 75-day public consultation on the Patented Medicines Prices Review Board (PMPRB) and its role in limiting excessive prices for prescription drugs.

The department found that regulations governing the PMPRB were in need of overhaul, having only received minor changes over the past two decades. Drug prices in that time period have increased substantially, making Canada one of the most expensive countries in the world for patented medicine. These costs have become increasingly difficult to sustain for both governments, employers and individuals.

Health Canada has therefore called for new price regulations, including price reporting requirements for patent holders, in order to assist the PMPRB in its aim of protecting Canadian consumers.

Responding to the main points of Canada Gazette Part 1, CLHIA president and CEO Stephen Frank explained how the country’s life and health providers viewed the proposals.

"The industry will support the government as it works toward reducing drug costs in Canada and we will be active participants in these important consultations," he said. "Canadians benefit from a system that blends the strength of both the public and private system and we will continue to work collaboratively with the federal government as they work to improve the system for all Canadians."

According to Health Canada, the proposed amending regulations have five key elements, which are as follows.

New price regulatory factors and updating the schedule of comparator countries
  1. Providing the PMPRB with three new price regulatory factors to enable it to consider the price of a patented medicine in relation to its value to patients and impact on the health care system.
  2. Updating the schedule to the regulations that sets out the countries (now the PMPRB7) on which patentees report pricing information to include countries with similar consumer protection priorities, economic wealth and marketed medicines as Canada. This would provide the PMPRB with the information needed to regulate prices based on comparisons that are more closely aligned with the PMPRB's mandate and Canada's domestic policy priorities.
New reporting requirements
  1. Reducing reporting obligations for patented veterinary, over-the-counter and "generic" medicines (i.e., those authorized for sale by the Minister through an Abbreviated New Drug Submission [ANDS]). As these products pose a lower risk of asserting market power and charging excessive prices, this reduction would enable the PMPRB to focus on medicines at higher risk of excessive pricing.
  2. Amending patentee price information reporting requirements to include reporting in relation to the new factors.
  3. Requiring patentees to report price and revenue information net of all price adjustments such as direct or indirect third party discounts or rebates. This would ensure that the PMPRB is fully informed of the actual prices for patented medicines in Canada and enhance the relevance and impact of domestic price comparisons.

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