Medicine Prices in Canada: Time for a Change

Ensuring timely access to medication for all Canadians has remained a key interest for policymakers across the country. As approval of new proposed medications lags, patients and professionals alike have called to the Patented Medicine Prices Review Board (PMPRB) to address these issues. The PMPRB Canada is responsible for regulating the prices of patented medicines sold in Canada and for reporting pharmaceutical trends.¹ July to November of 2020 only saw the approval of Veklury, a COVID-19 antiviral, while rare disease therapies for non-small cell lung cancer, multiple myeloma, and Duchenne muscular dystrophy were denied.² Regulation of prices for patented drugs occurs on an ongoing basis and includes both a scientific review process and a price review process.³ Under the Patent Act, the PMPRB is required to report a review of its analyses to the Canadian Parliament on the prices of patented medicines, price trends, Canadian prices compared to foreign prices, and Canadian drug expenditures compared to the global scheme.¹ In December 2019, the draft price guideline review proposed by the PMPRB garnered criticism from stakeholders (i.e. policymakers, patients, family, etc) across the country, for perpetuating bias against individuals with difficult-to-diagnose rare diseases.⁴

Orphan drugs are designated as medication for the diagnosis, treatment, or prevention of rare diseases or conditions affecting less than 5 in 10,000 patients in a given community or area.⁶ Under the proposed guidelines, medication designated under the category of orphan drugs would be more financially restricted when compared with other countries. Australia, Scotland, and New Zealand gave positive recommendations for 62.5% of drugs with ICER’s over $100,000/ QALY.⁵ Life-saving therapies for hypophosphatasia, mucopolysaccharidosis IVA and systemic idiopathic juvenile arthritis were approved with ICER’s far above the proposed PMPRB threshold in several countries around the globe, however would not pass the proposed PMPRB guidelines.⁵ While the prevalence of hypophosphatasia, a rare inherited bone and mineral metabolism disorder, in Canada is 1 in 100,000 people, the Mennonite population is disproportionately affected, with 1 in 2500 being affected.⁶ It has become increasingly evident that the PMPRB threshold has a negative impact on the quality of therapeutic drugs passing the first stage of approval in Canada and subsequently the millions of Canadians living with a rare disorder.⁵

With clinical trials serving as a necessary stepping stool in the drug approval process, the guidelines have already begun to negatively impact the number of clinical trials we see in Canada.⁵ 2019 saw a sharp decrease in clinical trials being performed, while comparable countries such as the US did not observe the same trend.⁵ Individuals affected by a variety of rare diseases from cystic fibrosis to Parkinson’s disease to cardiovascular disease will have the value of their lives determined by a price regulator despite rare diseases only comprising a very small fraction (<3%) data-preserve-html-node="true" of drug spending.¹

The Canadian Organization for Rare Disorders (CORD), a national association comprising of over 100 rare disease organizations, advocates for the three million Canadians affected by rare diseases.⁵ On February 14th, 2020, CORD issued a report addressed to the PMPRB outlining reasons as to why the focus on saving substantial drug expenditures will harm patient access to appropriate medications.⁵ CORD criticized the implementation of a universal (legally binding) “value” index, specifically the Incremental Cost-Effectiveness Ratio (ICER) of $60k/quality-adjusted life-year (QALY) for drugs for common conditions or $90k/QALY for drugs intended for a rare disease population.⁵ An ICER is calculated by dividing the difference in total costs by the difference in the chosen measure of health outcome, where an ICER above a given threshold($60k/QALY & $90k/QALY) would be regarded as too expensive and should not be funded.⁵ While ICER can be used as a tool to inform the approval process for medications, no other jurisdiction has set these as strict legal limits due to its inability to address contextual factors such as the severity of the disease, challenges of administration, etc.

The consequence of the limitations imposed by the PMPRB guidelines have already been observed through the lack of medicines coming to Canada when compared with other countries. Shortly after the implementation of these new rules in 2019, twenty-one novel medications were approved by the United States Food and Drug Administration (FDA), while none have been approved by Health Canada.⁵ CORD’s report to the PMPRB outlined how companies have admitted to deprioritizing the Canadian market for launching new medicines because of the threshold impact on global pricing.⁵ When comparing the approval rate of new drugs with the US, between 2015 and 2018, 49% of new drugs were approved in Canada prior to or within a year of their approval in the United States. In 2019, this rate fell to just 15.6%, and it is expected to decrease even further after the implementation of these new guidelines.⁵

Health Canada has announced that implementation of the proposed guidelines will be delayed until July 1st, 2021 due to the complications that have arisen due to COVID-19.⁷ In 2019, Canada has committed $1 billion for the first two years for a Rare Disease Drug Strategy to be put in place for 2022-2023. Since then, CORD has begun a series of consultations to discuss guideline impacts with stakeholders.¹ Following in the footsteps of other countries, (i.e. England, Scotland, Germany, etc) who have constructed separate frameworks for rare diseases focusing on improving both affordability and timely access, it is crucial to promote the health and wellbeing of all Canadians affected by rare disorders. CORD’s advocacy efforts have allowed individuals with rare disorders and their families to have their experiences heard and incorporated into policy, a first for many individuals. While financial restraints are important factors to consider during the construction of pricing guidelines (PMPRB), they must not be prioritized over the well-being of Canadians.

Maria Puscas

Works Cited:

PMPRB. Patented Medicine Prices Review Board. Canada.ca. https://www.canada.ca/en/patented-medicine-prices-review.html. Published February 10, 2021. Accessed February 21, 2021.

Wong-Rieger D. Study on the Patented Medicine Prices Review Board (PMPRB) Reforms. http://www.raredisorders.ca/content/uploads/CORD-submission-to-HESA-on-PMPRB-Nov-6-20.pdf. Published November 6, 2020. Accessed February 20, 2021.

Government of Canada. Regulatory Process. Patented Medicine Prices Review Board . http://www.pmprb-cepmb.gc.ca/en/regulating-prices/regulatory-process. Published December 9, 2020. Accessed February 21, 2021.

Cystic Fibrosis Canada. https://www.cysticfibrosis.ca/our-programs/advocacy/access-to-medicines/pmprb. Accessed February 21, 2021.

Wong-Rieger D. Letter to Patented Medicine Prices Review Board. Patented Medicine Prices Review Board (PMPRB). http://www.raredisorders.ca/content/uploads/CORD-draft-PMPRB-Guidelines-Submission-Feb-14_2020Combined.pdf. Published February 14, 2020. Accessed February 20, 2021.

Harris E. Addressing the needs of Canadians with rare diseases: an evaluation of orphan drug incentives. OUP Academic. https://academic.oup.com/jlb/article/5/3/648/5088948. Published August 31, 2018. Accessed February 21, 2021.

Oakes K. Canada's drug price reforms delayed to 2021. Regulatory Affairs Professionals Society (RAPS). https://www.raps.org/news-and-articles/news-articles/2020/6/canadas-drug-price-reforms-delayed-to-2021. Published June 2, 2020. Accessed February 21, 2021.

Cite This Article:

Puscas M., Sri A., V. A., Liang A., Chharawala V., Lombo L., Ananthakrishnan A. Medicine Prices in Canada: Time for a Change. Illustrated by V. Chharawala. Rare Disease Review. November 2021. DOI:10.13140/RG.2.2.18200.93445