Thank you, Mr. Chairman. I am delighted to be here.
Good afternoon, and thank you for inviting the Canadian Agency for Drugs and Technologies in Health to present our work to you within the context of the common drug review.
I am Jill Sanders, the president and CEO of CADTH. I'm joined today by Mike Tierney, who is our vice-president for the common drug review; and Dr. Braden Manns, who is a specialist in kidney diseases, an associate professor at the University of Calgary, and the chair of CEDAC, the expert advisory committee to the CDR.
Background information on the common drug review was provided to you in our written submission document, so I'm here today to expand further on some of the points therein.
In our publicly funded health systems in Canada, achieving the balance of optimized care, accessibility, equitability, affordability, and sustainability for all Canadians is, of course, what we all strive for. This means that difficult decisions must be made throughout the systems, and the role of the common drug review is to assist with the decision-making around pharmaceuticals.
As we all know, pharmaceuticals contribute to improved health outcomes for Canadians, but they're also the fastest-growing cost component of the system. This highlights the importance of rigorously reviewing the clinical and cost-effectiveness of drugs.
Let me begin by clarifying the role of the CDR in relation to Health Canada. Health Canada is responsible for ensuring that marketed drugs in Canada meet standards of safety, quality of manufacturing, and efficacy. In contrast, the CDR provides advice to public players about the clinical and cost-effectiveness of a given therapy against other therapies so that the public funds may be optimally used.
Health Canada's approval for the marketing of a drug does not automatically mean that the drug is the best option within the broader context of the health care system. So following the Health Canada approval for the sale of a drug, those providing health care services must decide whether to utilize the drug. These decisions, of course, are the responsibility of the provincial, territorial, and federal drug plans. These drug plans have operated processes for many years and make decisions based on exactly the same type of process that CDR uses.
The processes that have been used for decades include the assessment of both clinical and cost-effectiveness. So the CDR is not a new concept. In terms of its mandate, it processes, and its outputs, it performs assessments of clinical and cost-effectiveness just as the drug plans have always done. These assessments are considered by a committee of experts, CEDAC, who make the recommendations, just as the drug plans have done over the years.
So the newness of CDR relates to the fact that it was created by 18 publicly funded drug plans in Canada to perform exactly the work they had each been doing independently prior to its creation. Prior to CDR, a drug might undergo 18 reviews, and drug coverage was consequently not the same for all Canadians.
The CDR reduces duplication of effort across the provincial, territorial, and federal drug plans, and importantly, it makes significant contribution to equitable access to pharmaceuticals across Canada. Why is this the case? Because participating drug plans now have equal access to high-level evidence and expert advice from CDR, which leads to more consistent decisions. While CDR provides formulary recommendations for listing, of course the final decisions do rest with the drug plans, taking into consideration their jurisdictional needs, priorities, and resources.
I'd like to take a moment to talk about the importance of both clinical effectiveness and cost-effectiveness. Before the cost-effectiveness of a drug is considered, the drug must first be shown to be clinically effective and demonstrate improved health care outcomes. In other words, clinical effectiveness is the first consideration. The definition of cost-effectiveness can vary depending on your point of view, but the central concept is value for money. The internationally accepted standard for expressing cost-effectiveness is called the QALY, or the quality-adjusted life year, the cost per QALY.
The cost per QALY allows us to calculate the cost of a new drug relative to improvements in survival and quality of life. In fact, an expensive drug can still be cost-effective. For example, Prezista is a drug for the treatment of HIV infection, and that received a conditional listing from Health Canada in terms of being marketed in Canada. It costs approximately $10,000 a year per patient. The CDR recommended that it be listed for patients with HIV infection who had failed on other therapies.
On the other hand, a relatively inexpensive drug may not be cost-effective if it doesn't offer improvements in health outcomes compared to a less costly treatment. CDR has seen examples of these as well.
I'd now like to highlight some aspects of the CDR process, in addition to the information we provided in our submission.
CDR's aggressive timelines are based on the best practices of the provincial drug plans, and CDR has consistently met all these timelines. The average total time from the Health Canada approval of a drug to its listing on a formulary has changed from 471 days before CDR to 479 days. So CDR has not had an impact on this timeframe. In fact, CDR represents about one-third of this time, with 140 to 180 days. It's important to remember that once CDR has released a recommendation it is the drug plans that make the decisions as to whether to list the drug. The timeframe for this remains the responsibility of each drug plan, and CDR has no role in this process. Rigorous scientific and technical processes are important to ensure accuracy in the recommendations made and also to ensure fairness to the public served. Equally important is that the processes be as transparent as possible.
Prior to the CDR, provincial drug plans did not provide an opportunity for manufacturers to comment on the reviews upon which recommendations were based, and none of them publicly released reasons for their recommendations. Today, manufacturers review and provide feedback on CDR reports, and this time is built into the timeline for CDR to give manufacturers time to do this. Also, the status of all submissions, as well as the detailed CDR recommendations and the reasons for their recommendations, are posted on the CADTH website.
The CDR has set new standards of transparency for drug reimbursement in Canada and abroad, and it continues to make enhancements. In fact, based on the evaluation of CDR from 2005, there were recommendations that further steps be taken to improve transparency. Canada has responded by appointing two public representatives to CEDAC—voting members. Furthermore, as part of the budget expansion that Mr. Wright just mentioned, CADTH is implementing plans this year to publish lay versions of CDR recommendations, to publish the reviews upon which those recommendations are based, and to publish the minutes of the CEDAC meetings.
Given it's impact on public reimbursement, CDR attracts considerable attention and some criticism, particularly from the pharmaceutical industry. I'd like to address a few of these.
There have been claims that the drug plans do not follow CDR recommendations. As I said earlier, drug plans make their own decisions regarding reimbursement of drugs, and they're certainly not bound to follow CDR recommendations. However, to date, the drug plan decisions that have been made have followed the CDR recommendations in 90% of the cases. There are some exceptions, obviously, for the 10%, and what this shows is that drug plans take into account the local jurisdictional considerations.
There's also been some concern voiced that CDR is a barrier to access for new drugs. There isn't any evidence that CDR has created a new or more challenging threshold for drug access compared to what was in place before CDR existed. In fact, in the five years preceding CDR, the largest drug plan in Ontario listed 44% of the drugs that they reviewed. To date, the CDR rate for positive recommendations is approximately 50%.
It is also argued that CDR recommends fewer drugs than international comparatives. A study commissioned by Rx&D reported that CDR approved 52%, which I just reported, of the 50 drugs reviewed to date at the time of that review. But they also reported that this is significantly lower than for many other countries. The Rx&D study is based on very selectively chosen statistics for the other countries and it's intended to tell a particular story. In fact, the study shows that the positive recommendation rate for CDR is in the mid-range of all countries and in fact is higher than countries with similar health systems, such as Australia and New Zealand.
One must be very careful when doing such a comparative study. For instance, some countries may list a drug, but for only partial reimbursement, where the remainder is paid by the patient. For example, France has a three-level reimbursement model. Other countries undertake national price negotiations, which influence reimbursement decisions.
So the question is whether Canada is out of step globally in terms of access to drug therapies. In our opinion, this is not the case. Critics have claimed that CDR focuses on cost control and does not recommend innovative drugs. In fact, CDR has recommended expensive drugs that demonstrate improved drug outcomes, and it's clear that drug cost alone does not drive CDR recommendations. However, there are categories of drugs that do not fit well with the existing CDR process and for which another approach might well be an optimum approach. Such examples are expensive drugs for rare diseases, which I think you have heard about before today.
However, the national pharmaceutical strategy task group is working on this challenging issue and has been assigned to report to the Conference of Deputy Ministers this June 2007. So we await that report, and CADTH looks forward to continuing to work with NPS and the Conference of Deputy Ministers to implement its recommendations, which may include a specialized process at CDR for expensive drugs for rare diseases.
Finally, the pharmaceutical industry has cited concerns about the request for a reconsideration process. With the three years of experience we have with CDR now, a review of this process might well be appropriate at this point.
The challenges in the field of drug assessment and reimbursement, of course, are not unique to Canada. CADTH is very active internationally and is regarded as the gold standard in its field. We work closely with governments and agencies around the world on tackling the challenges we face.
There are many stakeholders in CDR: the public; health professionals; the pharmaceutical industry; and CADTH's owners, the federal, provincial, and territorial governments. While we recognize there will always be tension between the pharmaceutical industry and CDR, we will continue to engage the industry and stakeholders through regular meetings, liaison groups, and working groups.
The vision and mandate for CDR came first from the first ministers of health to establish a consistent and rigorous approach to drug reviews, to reduce duplication across publicly funded plans, to maximize limited resources and expertise, and to provide equal access to that expert advice.
In the three years since CDR was established, CADTH has fulfilled its mandate, and it's committed to a vision of a common national formulary that can be achieved through a staged expansion of CDR. CADTH continues to be well positioned to support the objective of the federal, provincial, and territorial governments to rigorously evaluate new technologies and to provide Canadians with equitable and affordable access to drug treatments.
The CDR continues to evolve in response to direction from its owners, the Conference of Deputy Ministers of Health.
Thank you for allowing us to present today. We welcome your questions.
