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Friday, May 24, 2013

Sustaining our momentum on pan-Canadian drug pricing

Dr. Michael Law is an assistant professor at the Centre for Health Services and Policy Research, School of Population and Public Health, University of British Columbia.

I can’t help but be struck by the relative progress on two important pharmaceutical policy files that were commitments in the original 2003 Health Accord.

First, consider the progress toward harmonizing the assessment of drugs. Since 2003, the Common Drug Review (CDR) has produced 236 recommendations on new drugs, and the reviews are widely used by provincial drug plans. Moves toward jointly assessing the evidence on new drugs have become well entrenched in Canada.

In contrast, consider the baby steps we’ve made toward the Accord commitment to collaborate on drug pricing. On the brand side, it has become increasingly common for countries to negotiate confidential deals with pharmaceutical companies through so-called product listing agreements (PLAs). These agreements provide confidential discounts to drug plans in exchange for coverage, particularly as our current system allows one province to be played off against another.

On the generic drug side, while other countries get companies to aggressively compete with one another to obtain lower prices, we’ve stuck to our old formula of pricing generics as an arbitrary percentage of the brand name price. So, in short, I think there’s a need for more pan-Canadian work on drug pricing.

After many years of being stalled, we’ve recently started to see some changes. These initiatives have been launched by individual provinces, and then brought to the national level through the Council of the Federation. First, in 2010 the premiers agreed to band together to secure better deals on brand name medicines, and subsequently in 2012 they agreed to pursue generic drugs through collective bulk purchasing.

Given the commitment to pan-Canadian movement made back in 2003, progress to date has been modest: collective purchasing strategies have been completed for seven brand name products and six generic drugs. When you consider that millions of Canadians use thousands of different prescription drugs, it’s abundantly clear that there is a slew of further opportunities for collaborative initiatives.

I think an important question at this point will be how to build on these initiatives and maintain this new momentum. As the Council pointed out in their report on the National Pharmaceuticals Strategy, as governments change, priorities shift, often leaving valuable policy initiatives unfinished.  We have already started seeing this to some degree when Quebec recently decided not to continue participating in these new initiatives.

Making sure we maintain this momentum is important, as there are still significant barriers to negotiating brand prices together, and Canadians continue to pay for generic drugs using an outdated pricing model. Following the lead of the Common Drug Review, perhaps it’s time we institutionalized these joint-purchasing initiatives through a formal body or governance structure that can build on and expand these recent successes. A more permanent body would help address these serious issues, and solidify our current momentum on pan-Canadian prescription drug pricing initiatives.

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