Evidence of meeting #9 for Health in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was documents.
A recording is available from Parliament.
2:05 p.m.
Executive Director, Patented Medicine Prices Review Board
We actually submitted those in writing in both official languages a few hours ago. I thought they would be distributed to members by now. Is that the case?
2:05 p.m.
The Clerk
Yes.
2:05 p.m.
Liberal
The Chair Liberal Ron McKinnon
That's perfectly okay.
In that case, we will start straight away with the questions.
We will go to Mr. Kmiec.
Mr. Kmiec, please go ahead for six minutes.
2:05 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Thank you, Chair.
I want to go back to what we talked about on Monday, the $15-million threshold before these new PMPRB rules kick in. Can you tell me if that is the list price or the rebate price? How will you know when that $15-million threshold has been crossed?
2:05 p.m.
Executive Director, Patented Medicine Prices Review Board
It's actually not $15 million; it's $12 million. It's based on real revenue as reported to us by the patentee. They're required to report that revenue to us, so it will be pretty easy to monitor. About 50% or so of high-cost rare-disease drugs that come to the Canadian market would be unlikely to hit that threshold and actually have sales above $12 million a year.
2:05 p.m.
Conservative
2:05 p.m.
Executive Director, Patented Medicine Prices Review Board
If memory serves, it was based on a methodology used by a sister organization in the U.S., called ICER, where you basically look at how much we're spending on pharmaceuticals in a given year, how much GDP is increasing, the percentage of GDP increase, and multiply the percentage by the total spend on pharmaceuticals. That gives you some idea of what your budget envelope is to accommodate new drugs coming onto the market. Then you divide by the average number of drugs that are coming onto the market over a period of some years. Typically, it's around 35 new drugs per year. That gives you about a $6-million envelope for any new drugs, and then—
2:05 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Mr. Clark, I'm sorry to interrupt you. Afterwards, at some time, would you be able to provide that ICER report to the committee? I think that would be of interest.
November 27th, 2020 / 2:05 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
The reason I ask is that $12 million is a pretty low bar at the list price of a drug such Zolgensma, which CADTH is trying to determine whether to approve. It's just under $3 million. That's about four patients, four kids with SMA1, and the manufacturer will have already breached that $12 million. However, Zolgensma, just like Trikafta for CF patients, is a game-changing medication. They're going to have to go by these new rules in the PMPRB, which likely means that a $3-million drug that changes the life a little boy or a little girl.... I have two children in mind, Kaysen and Harper in Edmonton. This is a condition that kills children by the age of two.
With this $12-million threshold, were patient viewpoints taken into account and the likelihood of patients dying while these PMPRB rules are implemented?
2:05 p.m.
Executive Director, Patented Medicine Prices Review Board
As I said, about 50% or less of high-cost rare-disease drugs that are coming onto the market would meet that threshold. However, it's important to bear in mind that even when that threshold kicks in, for the time being, the new, lower-price ceiling won't be applied by us. As I mentioned at our Monday meeting, we're awaiting a decision on an appeal from the Federal Court of Appeal on that topic. For the time being, the only price ceiling applicable to Zolgensma, assuming it comes to Canada, would be the median international price.
2:05 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Moving on, then, I was rereading all the briefs. The pharmaceutical companies are upset, obviously, with the PMPRB. You're affecting their revenue. I understand that. However, when I read over all the patient advocacy and briefs from patient organizations, I find zero support for these changes.
Are there any organizations out there that represent patients that are absolutely 100% on board with all these changes? These are organizations that represent patient families and patients across Canada. Do any of them support the PMPRB changes?
2:10 p.m.
Executive Director, Patented Medicine Prices Review Board
Yes. There are a number of independent patient organizations that don't accept any funding from outside sources, from industry, and they submitted briefs to the committee. One is Breast Cancer Action Montreal or Quebec. The other one is Independent Voices for Safe and Effective Drugs in Canada. Those are two that come to mind.
Generally speaking, as to where they break in terms of support or opposition to the reforms, there is a correlation between whether a patient group is independent or accepts funding from the private sector. Dr. Levine stated as much in his opening statement, when he said that patient groups are scattered across the divide that separates, on the one hand, payers who are struggling with these very high-cost drugs, and on the other end, the industry, which continues to want to charge these exorbitant prices.
2:10 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Speaking of high prices, a lot of the different health systems, health insurers across Canada, also submitted briefs. I'm going to draw your attention to Alberta Health Services in my province. Alberta Health Services said that between the first proposal and the revisions in the second proposal, none of their viewpoints were taken into account and none of the revisions they were asking for were made.
Is there a reason that the second version of the PMPRB regulations, the ones to be implemented January 1, completely ignored Alberta Health Services' viewpoints and their submission on the changes needed to the PMPRB regulations?
2:10 p.m.
Executive Director, Patented Medicine Prices Review Board
Off the top of my head, I'm not sure what submissions they're referring to. I can tell you that we did make substantive revisions, major revisions between the November and June drafts, and I think those revisions have been instrumental in getting some of our stakeholders to sign on to the new guidelines.
Ultimately, it's important to bear in mind that I've met many times with the folks who are responsible for the Alberta drug plan and it has always been my understanding that they're very supportive of the pCPA. These changes are a direct result of calls from the pCPA, which represents all the provinces, all the public drug plans and the federal drug plan, for stronger federal measures to support them in the difficulties they're currently encountering in trying to negotiate a fair price with monopolists over a life-saving drug.
On the whole, I can't speak to that particular submission. I don't recall exactly what they said, but I know CLHIA submitted a brief as well, and on the whole, public drug plans and private drug plans are uniformly supportive of these changes.
2:10 p.m.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
It's interesting that you're bringing up pCPA, because pCPA is the body that negotiates on behalf of—
2:10 p.m.
Liberal
The Chair Liberal Ron McKinnon
We go now to Dr. Powlowski.
Please go ahead, Dr. Powlowski, for six minutes.
2:10 p.m.
Liberal
Marcus Powlowski Liberal Thunder Bay—Rainy River, ON
Okay, I think this is really difficult stuff for someone to understand. Let me get this straight. The Patent Act sets out some criteria for the PMPRB to consider in determining the price or what price is considered excessive. The act allows the minister, by regulations, to add other criteria as to what makes the price of a drug excessive.
One of the new criteria is pharmacoeconomics. Is it the PMPRB or the CADTH, the Canadian Agency for Drugs and Technologies in Health, that makes the calculation in terms of pharmacoeconomics?
2:10 p.m.
Executive Director, Patented Medicine Prices Review Board
To respond to the first part of your statement, that's absolutely correct. There are criteria in the Patent Act enumerated there, and then there are additional criteria now having been added in by way of regulation by the Minister of Health.
In terms of the actual calculation, what we call the ICER value that will go into our formula, that will be conducted and calculated solely by the CADTH and also on occasion by INESSS, depending on whether there's a report available from INESSS and not the CADTH.
We've been saying this all along. We have no intention of duplicating that work. We are leveraging the existing expertise that we have within the Canadian regulatory ecosystem and are trying to complement it as best we can. We're taking that input directly. We're not making any changes to those numbers. We're simply applying a formula—does the ICER value meet or not meet our pharmacoeconomic value threshold in our guidelines—and then we go from there.
2:15 p.m.
Liberal
Marcus Powlowski Liberal Thunder Bay—Rainy River, ON
My understanding of pharmacoeconomics is that, largely, this is a calculation of cost per QALY, quality-adjusted life year, so that's what goes into calculating the ICER.
2:15 p.m.
Executive Director, Patented Medicine Prices Review Board
That's correct. “Cost-utility ratio” is the official term.
2:15 p.m.
Liberal
Marcus Powlowski Liberal Thunder Bay—Rainy River, ON
My understanding is that this is HTA, health technology assessment. Am I wrong in saying this? I've read that Canada will be the first country that sets a maximum allowable price based on HTA. Is this true?
2:15 p.m.
Executive Director, Patented Medicine Prices Review Board
As I said on Monday, no two regimes are alike. Canada, to my knowledge, is the only developed country with a price regulator that regulates pharmaceuticals. The comparison kind of breaks down when you have that information.
There certainly are other developed countries where the reimbursement body won't enter into negotiations with a company unless the price is below a certain ICER threshold. The U.K. and Japan are examples of that.