Download Environment - Public Policy Forum

Walter Robinson
Vice President
Government Affairs
October 30, 2014
PPF – Purpose of Today
A salient discussion to bring
together senior leaders from
across sectors to explore
opportunities for
collaboration in sustainably
managing drug costs and
enhancing health access in
the Atlantic region
Rx&D – Purpose of Today
A salient discussion to bring
together senior leaders from
across sectors to explore
opportunities to collaborate in
sustainably managing drug
costs and enhancing health
access and improving health
outcomes in the Atlantic
region and across Canada
Health System Sustainability
Asking the right questions …
• Do our solutions support patients?
• Are policy solutions rooted in evidence?
• Do proposed approaches align with other policies?
• Are we thinking short-term & long-term …
$$$ and outcomes?
• Have we unleashed the value of medicines?
About Rx&D
Our Members
Contribution to Canada
• 55 research-based companies
(international and Canadian start-up)
• Account for 46,000 Canadians jobs
(direct and indirect)
• Annually invest over $1B into
pharmaceutical R&D and related
activities
• 3,000+ clinical trials across Canada
• $750M into hospitals/communities
• Annually contribute $3B to GDP
• Support a vibrant and national
life-sciences community
About Rx&D
Rx Medicines in Context
Rx Medicines in Context
• Life expectancy in Canada
1914
2014
52
80
57
84
• Public Health partner in newborn, school-age, seasonal and
pandemic vaccination efforts
• Steady increases in cancer, cardiovascular, diabetes, HIV/AIDs and
other disease survival rates due to new innovative therapies
– Cancer survival rates, especially in prostate, breast, lung and colorectal
cancers have declined steadily since Canada’s peak of deaths/1,000 in 1988
• Total Rx medicines spend (public & private) in Canada -- 6.2%*
* PMPRB/CIHI derivation -- 2012
Value of Medicines: Life and Longevity
Acute Myocardial
Infarction*
0%
-10%
Heart Disease**
-20%
Respiratory Illnesses**
-26%
-30%
-40%
-50%
-34%
-40%
-45%
Breast Cancer****
Colon Cancer*
-60%
HIV***
-70%
-80%
-77% -76%
-78%
Prostate Cancer*****
Sources: OECD Health Data, *1980-2009; ** 1970-2009, ***1995-2009; *****1990-2004;
Canadian Cancer Society, Canadian Cancer Statistics, ****1986-2012.
Value of Medicines: System Impacts
Fewer days in hospital: Canada
Asthma
0%
Breast Cancer
-8%
-10%
Diabetes
-20%
-20%
-30%
-29%
-31%
-40%
-50%
-80%
Acute Myocardial Infarction
HIV/AIDS**
-50%
-50%
-60%
-70%
Hypertensive diseases
Prostate Cancer
-60%
-71%
-70%
Respiratory
Infections/Influenza
Ulcers
Sources: OECD Health Data, *1980-2009; ** 1970-2009, ***1995-2009; *****1990-2004;
Canadian Cancer Society, Canadian Cancer Statistics, ****1986-2012.
Source: OECD Health Data 2012, 1980-2009, except **: 1986-2008.
About Rx&D
Rx Medicines in Context
Pan-Canadian
Pharmaceutical Alliance (PCPA)
PCPA: Background
• August 2010 – “Bulk Purchasing” discussion at Council of the
Federation (CoF)
• August 2014 – CoF announces $260M in total annual savings
– Quebec to join, rumours of Federal Plans too, name change
• Pricing is the driver … value of medicines, patient access, and
system sustainability are tertiary considerations
PCPA: Objectives *
• Increase access to drug treatment options
• Improve the consistency of drug listing decisions across the
country
• Capitalize on combined buying power of jurisdictions
• Achieve consistent pricing and lower drug costs
• Reduce duplication of negotiations and improve utilize of
resources
* Presented by PCPA – February 2013 at Pharmacare 2020 conference in Vancouver
PCPA: Objectives
• Increase access to drug treatment options
• Improve the consistency of drug listing decisions across the
country
• Capitalize on combined buying power of jurisdictions
• Achieve consistent pricing and lower drug costs
• Reduce duplication of negotiations and improve utilization of
resources
PCPA: Status as of September 30, 2014
Therapeutic Area
Oncology
Completed
22
CVS
8
COPD
3
MS
4
Allergy
1
C-Difficile
1
CF
1
HCV
1
HIV
1
PKU
1
Rare
2
Rheumatoid Arthritis
1
37 negotiations w/ 18 Rx&D Members
46
PCPA in Context
10 million of 35 million Canadians covered by public drug plans
After 4 yrs: $260M saved through CVPI / PCPA or $7.43 per CDN
10 public drug plans in 2014/2015 invest $11.3 billion
$260M represents 2.3% of this amount
Provinces in 2014/2015 devote $138 billion to healthcare
$260M represents 0.19% of this amount
Let’s address the other 99.81% ?
About Rx&D
Rx Medicines in Context
Pan-Canadian
Pharmaceutical Alliance (PCPA)
The Real Driver: Utilization
The Real Driver is Utilization
• Patented Medicines Price increases have grown below the rate of
inflation for 23 of the last 25 years (PMPRB PMPI -- 2013 Annual Report)
• Canadian prices below MIP for last 12 years … 2001 to 2013
• “Growth in use, not price, is driving cost increases” (PMPRB October 2011)
–
–
–
–
–
–
Canada’s population is growing
The demographic mix is changing
There is a rise in the incidence of health problems that require drug therapy
The prescribing practices of physicians have changed
Drug therapy is becoming more popular than other forms of treatment
There are new drug therapies to treat conditions for which no effective
treatment was previously available
• Provincial transformation efforts can drive pharmacotherapy
– Primary Care reform, age-in-place strategies and
expanded scope of practice
25-Year Expenditure Trendline
$2,500.00
$2,000.00
Hospitals, Institutions, Capital
Physicians, Professionals
Public Health, Administration, Other
*Prescribed Drugs
*Estimated Direct Spending on Patented Prescribed Drugs
$1,500.00
$1,000.00
$500.00
$0.00
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012f
Analysis: Canadian Health Policy Institute (CHPI).
Data: Canadian Institute for Health Information (CIHI), Patented Medicine
Prices Review Board (PMPRB).
Public System Use of Funds
Prov’l/Territorial Government Health Expenditure by use of funds vs. GDP
5-year Aggregate Growth 2006-07 to 2011-12 in current $
60.0%
53.4%
50.0%
40.0%
44.2%
34.5%
43.6%
34.4%
33.3%
27.2%
26.7%
30.0%
21.7%
18.2%
20.0%
10.4%
10.0%
0.9%
0.0%
Hospitals
Other
Institutions
Physicians
Other
Professionals
Drugs
Capital
Public Health Administration Other Health
Spending
Total
GDP
Sources: CIHI NHEX 2012; patented drugs estimated using PMPRB 2011 Annual Report. Calculations: B. Skinner.
Patented Drugs
(est)
Rx Cost Curve: Already Bent
About Rx&D
Rx Medicines in Context
Pan-Canadian
Pharmaceutical Alliance (PCPA)
The Real Driver: Utilization
Adherence Supports Sustainability
WHO: Adherence is the Issue
• Poor adherence to treatment of chronic
diseases is a worldwide problem of
striking magnitude
• The impact of poor adherence grows as the burden of chronic
disease grows worldwide
• The consequences of poor adherence to long-term therapies are
poor health outcomes and increased health care costs
• Improving adherence also enhances patients’ safety
• Adherence is an important modifier of health system
effectiveness
Predictors of Non-Adherence
•
•
•
•
•
Disease with no symptoms
Complexity of regimen: once vs multiple times/day
Time gap around a visit to a healthcare professional
Side effects of a medication, adverse events tolerability
Levels of education, income, age, cognitive function, insurance coverage
• 1/3 to 2/3 of medication related hospital visits
• Diabetes:
less than 40% adherence, 15% hospitalization rate
close to 100% adherence, 4% hospitalization rate
Non-Adherence by Disease State *
- CVS up to 50%; Depression up to 57%
- COPD (Asthma), Diabetes, GI disorders, neurological and HIV/AIDS
* Risk Management and Healthcare Policy July 2014 – Johns Hopkins University School of Medicine
Public Drug Programs – Clients/Conditions
•
•
•
•
•
Disease with no symptoms
Complexity of regimen: once vs multiple times/day
Time gap around a visit to a healthcare professional
Side effects of a medication, adverse events tolerability
Levels of education, income, age, cognitive function, insurance coverage
• 1/3 to 2/3 of medication related hospital visits
• Diabetes:
less than 40% adherence, 15% hospitalization rate
close to 100% adherence, 4% hospitalization rate
Major Conditions Treated
- CVS, Mental Health
- COPD, Diabetes, GI disorders
Magnitude of Non-Adherence
50%
According to the WHO
50% of patients don’t
take their medications
and 33% never even fill
their first prescription 1
$290
billion
New England health care
Institute (NEHI) estimates
that overall poor
adherence cost as much
as $290 billion/year 2
3.5X
Non-adherent chronic
diseases patients cost
their plan 3.5X more in
claims 3
4% to 11% of US $2.7 trillion spend on healthcare
1 - Adherence to long-term therapies, Evidence for action, World Health Organization. 2003
2 - NEHI, How many more studies will it take? A collection of evidence that our health care system can do better. Low range around $100 billion/year. 2008
3 - Green Shield, GSC 2013 Drug Study, the inside story. 2013
Adherence Impact in Canada
$215 billion spend (public and private)
11% estimate: $24
4% estimate:
billion in cost avoidance
$8.6 billion in cost avoidance
About Rx&D
Rx Medicines in Context
Pan-Canadian
Pharmaceutical Alliance (PCPA)
The Real Driver: Utilization
Adherence Supports Sustainability
Partnership = Leadership
Partnership = Leadership
• Agree to collaborate, involve all stakeholders
• Research, develop, fund and implement a Plan
• Support patients, don’t blame them
– Tailor solutions to diseases and patients
• Train healthcare professionals
• Integrate adherence efforts into system transformation
• Multidisciplinary approach
– HCPs, industry, governments, private payers, academe, PATIENTS
• Measure it, be accountable, improve and report to Canadians
Health System Sustainability
Asking the right questions about Adherence …
• Do our solutions support patients?
• Are policy solutions rooted in evidence?
• Do proposed approaches align with other policies?
• Are we thinking short-term & long-term …
$$$ and outcomes?
• Have we truly unleashed the value of medicines?
@RxandD
@walterrobinson
[email protected]
Value of Medicines
Broader
Society
Broader
Economy
Health
Spending
Better Health Outcomes
• Superior clinical outcomes and prevent
downstream complication
• Better SE profile
• Better adherence
Health Spending
• Decreased need for adjacent health services
• Increased efficiency in health care resources
• Better value compared to alternative therapies
Broader Economy
•
•
Productivity gains
Reduced disability and absenteeism claims
Health
Status
Broader Society
• Better quality of life for patients and for the
informal caregivers
Milestones
Drug Funding Process: Patent Filing to PCPA
Negotiations
Drug Discovery
Patent Filing
Pre-discovery
Pre-Clinical
3-6 Years
Recommendation
issued (CDR,
pCODR)
Phase I
Clinical Trials
Phase II
6-7 Years
Health Canada
Submission
Up to 2 Years
Manufacturer submits to
CDR/pCODR
pERC/CDEC makes
recommendation to drug
plans
PCPA/provincial review
Manufacturer
Submission
HC issues NOC &
DIN
CDR Reviews
Product
HTA Review
Up to 1 Year
Tabled at next
PCPA bi-weekly
teleconference
Phase III
Completion of Phase III
Research
HC Submission
≤ 2 weeks
OR
pCODR Reviews
Product
≤ 2 weeks
Confirm no
negotiation
on “DO
NOT LIST”
FILES
Participation
confirmed and
lead assigned
≤ 2 weeks
Letter sent to
manufacturer
informing of
decision
Variable
Negotiation
with Payers
Variable
Negotiation with
Provinces
OR
Negotiation with
PCPA
Negotiation
PhamaFocus 2018 (IMS Brogan)
C $Billions
Country
United States
Japan
China
Germany
France
Italy
United Kingdom
Brazil*
Spain
Canada
10 Key Markets
Worldwide
Sales, US $ % Market
Billions,
Share,
MAT June MAT June
2014
2014
354.8
39.2
82.2
72.2
45.5
37.9
28.7
23.8
22.9
21.2
21.0
710.1
904.7
9.1
8.0
5.0
4.2
3.2
2.6
2.5
2.3
2.3
78.5
100.0
% Growth,
Constant
US $, MAT
June 2014
+10.7
+2.5
+13.0
+5.3
-0.6
+4.0
+7.5
+15.1
CAGR
2009-2013
+2.7
+2.5
+23.2
+2.9
-0.9
+2.0
+2.8
+17.7
+3.4
+2.7
8.2
7.7
Notes: Prices are reported at the ex-manufacturer level (price when sold from manufacturer to wholesaler or direct to pharmacies).
Information includes OTC products where available. *Pharmacy market only. % growth, constant US $.
Source: IMS Health. MIDAS. MAT June 2014
-1.0
+0.5
3.9
4.9