Section 1: Feedback on Observations
Observation Category 1: Establishing a Collaborative Environment
Do you agree with the major current observations by the advisory panel in this category? No
Canada currently lacks a structured, national forum for ongoing collaboration as well as centralized data sources across the pharmaceutical ecosystem. There are significant differences amongst the public drug plans with respect to engagement, especially as it pertains to improving predictability, leveraging the wealth of available health data, and approaches to assessing the real value of treatments. Innovative Medicines Canada, (IMC) and BIOTECanada firmly believe that a truly collaborative environment must include a structured and ongoing process that includes IMC and BIOTECanada as full partners to ensure complete industry representation.
While we are broadly aligned to the intent to establish a collaborative environment, there are specific elements in the panel’s narrative where we are not supportive. We believe it is not in the best interests of Canadian patients to transition towards a universal, single-payer national pharmacare model. This approach would result in reduced and slower access to innovative medicines for the 27 million Canadians i who have private drug benefits.
A national pharmacare program should take a fiscally responsible approach to address high out-of-pocket costs and lack of eligibility for drug coverage, where it exists, across Canada’s public jurisdictions. We fundamentally and strongly believe all Canadians should have faster access to the medicines they need without affordability as a barrier. A model that builds on the strengths of Canada’s existing dual private/public drug coverage system is the best approach to efficiently direct government’s resources to benefit Canadians who need it the most.
While we do not support full price transparency due to the potential negative impact on Canada’s launch priority, we commend the intent to improve fairness and access. It is also important to take the current political and global priorities such as in the United States and its Most Favoured Nation (MFN) Policy into consideration.
i.http://clhia.uberflip.com/i/1526931-canadian-life-and-health-insurance-facts-2024-edition/14?
Observation Category 2: Encouraging Health System Efficiencies to Promote Predictability and Accelerate Access
Do you agree with the major current observations identified by the advisory panel in this category? Yes
IMC and BIOTECanada agree that improving predictability in reimbursement timelines and public plan participation is essential to strengthening Canada’s position as a priority launch market. Product portfolios today include more specialized products which necessitate more innovative negotiation approaches beyond volume based discounts. Canada’s importance as an early launch market has been decreasing largely due to unpredictable and long listing delays seen across many of Canada’s public plans. Canada currently ranks last in the G7 ii for patients to have access to new therapies. IMC and BIOTECanada agree that introducing efficiencies into the current jurisdictional listing process, such as adding drugs to the formulary as soon as the pCPA negotiation has concluded, would significantly improve timelines for the benefit of patients waiting for new therapies. We fully agree with the report’s acknowledgment of the importance of not further complicating the system. Accelerating the time to listing post a Health Canada’s notice of compliance (NOC) would go a long way to enhance Canada’s attractiveness as both an earlier launch market and destination to direct life science investment for clinical trials, research and strategic investments in Canadian Biotech companies.
The current gaps in drug coverage are well defined. Research conducted by the Conference Board of Canada in the GAP 2.0 report iii supports that the gaps in coverage and affordability are primarily related to high out-of-pocket costs across public plans and the lack of drug coverage eligibility in certain provinces. This supports IMC and BIOTECanda’s recommendation of a fiscally responsible fill-in-the-gaps model.
ii. https://phrma.org/resources/global-access-to-new-medicines-report
iii. https://www.conferenceboard.ca/in-fact/understanding-the-gap/
Observation Category 3: Examining Hospital or Group Purchasing Organization Procurements and Expertise
Do you agree with the major current observations identified by the advisory panel in this category? Yes
IMC and BIOTECanada agree with the panel’s observation of the benefits regarding the GPO led hospital procurement process, efficiency, supply assurance and reduced administrative burden. We also agree that, given the complexity, regional variations, and independence of the hospital procurement system, they should not be included as part of the strategy. It’s important to note that hospital procurement has several features that do not easily accommodate access to prescription medicines in the community setting. This includes commitments to purchase a minimum volume with an estimate of maximum volumes and reduced choice of drugs given a hospital tender is typically reduced significantly from what is available in the community. Hospital procurement of medications typically involves actual purchasing, acquisition and stocking of the products. The advisory panel’s observation of the difference between bulk purchasing and reimbursement is most keenly experienced in a hospital procurement setting. Greater coordination and integration between hospital and public plans must be approached with caution to avoid disrupting existing systems or creating unintended consequences for GPO systems which are working well. This is true when you consider complimentary negotiations performed by the pCPA for hospital products through the generics framework and novel oncology products, even if dispensed in the hospital setting.
Observation Category 4: Enhancing Existing Pooled Public Procurement Mechanisms
Do you agree with the major current observations identified by the advisory panel in this category? No
Publicly funded drug programs currently are benefiting from a pooled negotiation approach performed by the pCPA. We do not support the introduction of procurement strategies, such as tendering that are not well suited to single-source innovative medicines. Existing product listing agreements negotiated in good faith by both parties must be honoured and not threatened as a result of a future pharmacare approach.
As noted, the introduction of new approaches that focus solely on getting the lowest possible price, such as various tendering approaches, will have negative consequences on drug availability. These include losing the safety and continuity of drug supply, safeguarding continued participation, preserving competition and patient choice, supporting continued investment in Canada’s life sciences ecosystem, and not discouraging the launch of new medicines in the Canadian market. Industry also supports the view that consistent and
faster implementation across jurisdictions is important to fully realize the benefits of pooled approaches. Procurement strategies should aim to deliver value while supporting innovation, competition, and supply stability, ultimately to benefit Canadian patients.
Observation Category 5: Exploring Harmonization of Public and Private Payer Systems
Do you agree with the major current observations identified by the advisory panel in this category? No
IMC, BIOTECanada and their members have important and significant concerns regarding the inclusion of private payers in public negotiations whether in our current circumstance or during a potential transition towards a universal, single-payer national pharmacare model. We do agree with the panel’s statement that joint negotiations would not result in greater savings across the whole market and would result in higher prices for public plans due to country-wide pricing models and average selling price dynamics employed across the industry.
It’s important to note that government-funded drug programs which have fixed budgets and cover vulnerable populations pay a majority of the downstream health care costs. Rebates to public drug programs play an important role to support overall health system sustainability.
We appreciate and emphasize the report’s recognition of the challenges at principled and operational levels of joint procurement across the public and private levels. Given the high degree of variability between private drug benefit plan design from one employer to another, any harmonization of public and private systems would have significant obstacles. This would require the introduction of new private market regulations, legislation and introduce complexity to ensure equity across public and private plans. As a result, unintended consequences could be further access delays and reduced access to innovative medicines.
Section 2: Feedback on the Draft Recommendations
Refer to our draft report; to read the panel’s draft advice and provide your feedback by answering the following questions. The recommendations summarized are meant to be pragmatic and relevant to the present issues that are highlighted under the observations.
Recommendation Summary 1:
Create a mechanism for senior decision-makers from across the sectors to discuss strategies to continuously optimize the system, identify value, and enhance access to
prescription drugs and related products. Identify needs for data collection, reporting, and analysis across the sectors to prepare for, and support, centralized strategies and inventory management (e.g., forecasting) of new products entering the market to avoid unexpected costs. This work could leverage existing system coordination activities managed by CDA-AMC.
1. Do you agree with the recommendation put forth by the advisory panel? Yes
IMC and BIOTECanada support a collaborative multi-stakeholder approach to leverage the wealth of knowledge that exists in the healthcare ecosystem and advance data frameworks to better quantify the value of future innovative therapies. Our industry welcomes the opportunity to co-create better forecasting tools that would enable public payers to improve their long-range budget planning to facilitate quicker adoption of innovation thus faster access for Canadians.
Canada has long been a laggard when it comes to adopting more innovative reimbursement models. The complex, innovative products of the future will require more innovative reimbursement solutions. Therefore, any enriched data collection process should include exploring how public payers can incorporate more managed entry type agreement models.
As noted, the industry supports a fiscally responsible, fill-in-the-gaps approach which leverages the strength of Canada’s current private and public drug coverage system rather than replacing our current system with universal, single-payer national pharmacare.
In this context, increased dialogue and collaboration would help realize the added benefit of ensuring that all the key stakeholders across the entire supply chain remain relevant and engaged as real partners. This includes the pharmacy and wholesale industries who play a pivotal role in delivering medicines and support services to Canadians. We note that the current distribution model works well, and we caution against intervention in this area as doing so could hinder effective competition.
Any move to increase transparency in pricing across payer segments with different values needs to be considered within the global framework of pricing and reimbursement, including current challenges being faced by potential changes in pharmaceutical policy within the United States. While collaboration and transparency are important objectives in any procurement process, unintended consequences need to be considered, particularly those that would harm the ability of public drug plans to secure preferential net prices and undermine Canada’s launch attractiveness.
The out-of-scope elements of the supply chain, such as payment terms, storage and logistics, limits the value of a single payer bulk purchasing approach outlined in these recommendations. Effective collaboration between federal, provincial, and territorial governments is complex. Achieving national alignment would be very difficult leading to further uncertainty surrounding the pharmacare plan along with the possibility that the system becomes more fragmented and ineffective over time. The unintended consequences in pursuing a single-payer model would be significant and should not be underestimated.
Recommendation Summary 2:
Increase the number of people living in Canada benefiting from pan-Canadian Pharmaceutical Alliance (pCPA) negotiations by potentially including more publicly funded programs (e.g., population or condition-specific programs, workplace safety and insurance programs or similar programs, or specialized institutions such as provincial correctional facilities), which could strengthen negotiating power as well as align and enhance time to reimbursement.
2. Do you agree with the recommendation put forth by the advisory panel? No
Market size-disagree
IMC and BIOTECanada do not agree with joint tenders for public and private plans which have very different needs, priorities and values. Over time this would result in the erosion of coverage for millions of Canadians and have significant unintended consequences on value extraction, access to new medicines, and the overall attractiveness of the Canadian market as a destination to launch new medicines and investment. It is well recognized that the introduction of Ontario’s OHIP+ in 2018, where public was positioned as first-payer for those under 25 years of age, reduced coverage for Ontario families. This was eventually converted to a second payer system as a result. For further comments on private market inclusion please refer to recommendation 5 comments.
IMC and BIOTECanada agree that market predictability is important and supports performing additional research to fully quantify the populations of underinsured and uninsured Canadians with public coverage that could benefit from being added to a public formulary that provides second payer coverage. We believe all Canadians should be eligible for public coverage regardless of their postal code.
Before considering foreign models, Canada should examine domestic examples. For instance, Quebec’s hybrid system offers a balanced approach where public and private drug coverage complement one another to ensure there are no uninsured residents. On the other hand, the initial roll-out of OHIP+ in Ontario in 2018 provides a case study of potential unintended consequences to be avoided. Both successes and limitations from these programs should be analyzed before pursuing any international model with a different context than Canada’s.
Time to reimbursement- agree
Regardless of where the current pharmacare model lands with a national formulary, within the current public jurisdictional framework IMC and BIOTECanada strongly agree a standard PLA agreement template and time limits for jurisdictions to list a new drug would greatly improve overall time to access for all Canadians. For new process to be successfully adopted and implemented we recommend co-creation with industry partners. This includes a mechanism to track post pCPA LOI listing rates and timelines.
Contract management-agree
IMC and BIOTECanada support introducing process efficiencies that would accelerate listings across the jurisdictional public plans and reduce coverage gaps. Any changes to the current pCPA mandate needs to be evaluated against the consequences of adding additional process and complexity to an already complicated and time-consuming reimbursement pathway. While the intention to gain efficiencies by moving to a central contracting process is commendable, in practicality, dispute resolution and collection of rebates would pose many challenges as this would require significant jurisdictional alignment on drug formulary management process, financial management and regulations which can vary greatly in today’s systems.
Only recently has the pCPA corporation increased staffing resources to better meet the volume of innovation entering the pharmaceutical supply chain. The industry is concerned that any additional responsibilities may limit the capacity of the pCPA to meet their brand process guideline targets and slow the positive trends and renewed collaboration gains made in recent quarters. We recommend a cautious approach when considering expanding pCPA duties and reiterate the importance of continuous industry collaboration and consultation throughout any future planning.
As noted, the private market’s needs, priorities, and value considerations differ greatly from those of public plans and should not be part of public negotiations. Unintended consequences related to including private insurance in public procurement are noted throughout this submission.
Recommendation Summary 3:
Consider learnings from hospitals and other procurement practices to determine if they can be leveraged to support public practices and consider if a combined approach between public plans and hospitals is feasible for some products that are used in both settings (e.g., intravenous antibiotics or biologics).
3. Do you agree with the recommendation put forth by the advisory panel? No
IMC and BIOTECanada are supportive of the recommendation to explore where hospital procurement practices might inform improvements in public drug plans, particularly in areas where operational alignment could support continuity of care. However, the practicality of including GPOs in a national strategy may introduce many challenges making it unrealistic and inappropriate. The differences in governance, formulary designs, funding mechanisms, and prescribing environments mean that what works well in the institutional setting may not be directly applicable in broader public reimbursement contexts. Additionally, procurement strategies employed by GPOs for genericized and multi-source products are not suitable for single-source innovative medicines.
Recommendation Summary 4:
Building on the expertise of existing players in the system (e.g., pCPA or GPOs), expand their areas of responsibility to include procurement activities which could encompass the functions of a centralized procurement body for national pharmacare. This would build upon the existing joint negotiations that already occurs in Canada across most public drug plans and some private organizations.
4. Do you agree with the recommendation put forth by the advisory panel? No
As noted earlier, IMC and BIOTECanada disagree with the current single payer definition of pharmacare and are opposed to including private insurance in a public pooled procurement process as there is a risk of numerous unintended consequences and no guarantee of additional cost savings.
IMC and BIOTECanada agree that within the current system, building on the expertise of the pCPA for public plans specifically would be seen as having positive added value but only if it addresses the delays within the public negotiations process. Providing the pCPA with an expanded mandate is worth investigating if it can open the door for more innovative public reimbursement solutions that provide faster access and greater flexibility to meet the future needs of more complex treatments and precision medicines, not just additional processes focused on obtaining the lowest price. We agree with the recommendation that any procurement strategy should include clear time commitments for negotiations, dispute resolution mechanisms, and the other considerations mentioned. We noted that managed entry agreements and other types of innovative contracting approaches are not listed in the examples given by the panel, their addition should be considered in any expansion of pCPA approaches.
We also disagree with tendering approaches based on therapeutic equivalence as determined by the CDA as we need to ensure an appropriate number of options are available to individualize treatment for Canadians, as noted in the implications of this section.
IMC and BIOTECanada recommend forming a working group to investigate approaches to a pan-Canadian process for public plans to execute managed entry agreements. Industry agrees that the push for lowest net pricing should not come at the expense of long-term security of supply or access to a variety of therapies. Any future procurement framework must recognize the role of fair competition in securing value for Canadians. This could be done inside the pCPA’s current structure, scope and mandate for public plans. We also agree that any modifications to the pCPA’s role within the public drug plan system would require significant changes to their bylaws, scope, mandate and vision that would require full support across the jurisdictional membership which may pose a significant challenge.
IMC and BIOTECanada recommend that any changes to the current pCPA mandate should involve extensive industry and stakeholder consultation to ensure that adequate, informed feedback is collected. Partnering with IMC, BIOTECanada and their members, in advance of any changes being implemented is critical to ensure that any new processes or pathways meet the needs of the pharmaceutical ecosystem, supply chain, clinicians, payers and patients.
Recommendation Summary 5:
In our current circumstance, or during a potential transition state toward a single-payer, first-dollar coverage model (if implemented) both public and private payers could exist for drugs on, or complementary to, the national formulary. This raises the potential opportunity for alignment between public and private sectors or to advance joint initiatives; however, further research is required to test assumptions about the dynamics within and between public and private payers and their beneficiaries, the system benefits overall, as well as
other potential downstream effects. Before implementing any major changes, common assumptions should be tested to ensure that integration results in benefits across the system.
5. Do you agree with the recommendation put forth by the advisory panel? No
If not, please provide the reason(s) and suggested changes. If not, what else should be included? Please focus your feedback on the top 1 or 2 most pressing items.
IMC and BIOTECanada do not agree with the joint price negotiations/harmonization of public and private payer systems as this would have important unintended consequences with no guarantee of achieving additional cost savings. The private market has a very different view of Health Technology Assessments compared to CDA/INESS and already has many strong cost-control mechanisms such as PLA’s, prior authorization and risk pooling and does not require public bulk purchasing intervention.
In a system with harmonization of public and private payer systems, patients with private drug coverage would face significant delays and reduced access to new drugs as they would be subject to limited public formularies and prolonged reimbursement timelines which can be 2-3 times slower than private plans, 226 days compared to 772 days for public plans iv. Based on the GAP 2.0 research iii, private plans in Ontario reimbursed twice as many drugs compared to public plans. Any impact on the value of private drug coverage would greatly reduce the attractiveness of the Canadian market for future drug launches which in part is supported by the faster and broader listing rates in private drug benefits.
Tens of thousands of employee benefit plans and an estimated 27 million Canadian patients would face significant disruption, as co-pays, plan maximums, and other private market mechanisms would have to be removed to ensure equity in coverage. It is also unlikely this could be achieved. IMC and BIOTECanada recommend that additional costs and claim fees beyond the price of the drug, would need to be made transparent and regulated to ensure equity between private and public plans.
iv.IMC pan-Canadian TTL analysis. Data collected by IQVIA. Time from NOC to first provincial public listing (including QC) for NAS reviewed by CADTH & INESS, listed from 2014-2019, based on first provincial listing date (20% listing) and date of country-wide listing (80% listing). ** Source: Canada private data from Telus Health, Analysis by Innovative Medicines Canada, Time to Listing in private plans (NOC 2014-2018, private reimbursement to Dec 2019)
Section 3: General Comments
Do you have any other general comments or additional considerations (e.g., potential implications or unintended consequences) that you would like to share with us on the advisory panel’s draft advice?
IMC and BIOTECanada would like to thank Canada’s Drug Agency for the opportunity to collaborate and provide feedback on the bulk purchasing strategy draft recommendations and thank the panel of experts for their thoughtful comments. It is evident from the report that the panel appreciates the complexity of the Canadian drug supply chain which has evolved over decades to meet the needs of Canada’s hospital and outpatient settings across the jurisdictions.
IMC and BIOTECanada recommend the following principles guide pharmaceutical reimbursement policy moving forward.
- A Pharmacare strategy needs to recognize a long-term role for robust private insurance market: 27 million Canadian’s have access to nearly twice as many drugs and two to three times faster through private insurance compared to public plans.
- Preserve future launch capacity and innovation: the approach should not discourage manufacturers from:
- Prioritizing Canada for global supply allocation
- Launching new innovations in the Canadian market
- Investing in the provincial life sciences eco-systems
- Do no harm and ensure minimal disruption: to patients and the pharmaceutical supply chain:
- The recommendations should not be disruptive to the pharmaceutical supply chain, (pharmacy/wholesalers) nor impact patient ability to receive the medications they need in a timely manner
- Respects the role of the federal and provincial governments: this panel flows from the federal Pharmacare Act, therefore, CDA should limit its focus to the federal role and respect provincial jurisdiction.
- Avoid redundancy: pCPA and GPO structures already effectively address affordability. CDA recommendations need to take into account Canada’s unique market of provincial jurisdiction.
Fundamentally, IMC and BIOTECanada do not support a universal, single-payer national pharmacare model. Industry supports maintaining and building upon the value and benefits of a dual-payer model where each system complements the other. It’s important to note that 62% of the total allocated pharmacare funding has been already spent to support only 18% of the Canadian population (BC, MN, PEI, Yukon). There is a massive fiscal gap in the funding of C-64 relative to it’s stated goals. IMC and BIOTECanada believe
a more fiscally responsible and sustainable fill-in-the-gaps approach to address the current deficiencies in public coverage would be the best way to allocate limited government resources to ensure Canadians have access to the right medicine, when the need it, regardless of where they live.
It is important to recognize the complexity and systemic implications when looking at the innovative medicines sector given its economic importance to the Canadian economy and life sciences ecosystem. The Canadian pharmaceutical industry invested almost $3.3 billion in R&D and generated $18.4 billion in total economic activity in Canada in 2022 v. The best way to ensure Canada remains an attractive market for future investments and new therapies is to ensure a more predictable market with faster timelines for access to new medicines. It is also important to recognize the current political environment and the geopolitical risk, US tariffs and policies such as the most favoured nation, MFN, may further impact long-term access and pricing stability.
IMC and BIOTECanada applaud the many acknowledgements throughout the report on the need to accelerate access timelines and introduce more efficient processes and reduce duplication in the current system. IMC and BIOTECanada agree this may represent future opportunities for the pCPA to help introduce greater efficiencies. It’s important to remember that the pCPA has been under significant strain for several years to meet its performance targets and additional responsibilities need to be carefully considered so as not to negatively impact recent performance improvements.
To this point, there are ongoing efforts underway aimed at accelerating access in public drug programs. IMC and BIOTECanada recommend a focus on achieving success with these new pathways over the next two years should be considered before additional changes to the current system are introduced.
With regards to expanding the potential pool of payers to participate in a bulk purchasing program, this needs to be clarified. IMC and BIOTECanada recommend that the final report should focus only on public plans and exclude private insurance. As noted, there are no guarantees that harmonization of public plans and private payer systems will achieve additional cost savings and in fact, market dynamics suggest public payer costs would increase. Inclusion of private insurance would require significant reforms to employer- sponsored drug benefit plans which would lead to significant disruptions to tens of thousands of employer drug benefit plans, impacting two-thirds of Canadians.
IMC and BIOTECanada recommend that the downstream impacts of a national pooled procurement strategy on key supply chain stakeholders including wholesalers, pharmacy and patient services be further studied to minimize unintended consequences. Improving
patient health outcomes must be at the heart of any strategy. IMC and BIOTECanada believe any approach should take a patient-centered perspective. Patients should be at the heart of pharmacare policy decisions, and their needs and outcomes should be better reflected.
Lastly, IMC and BIOTECanada recommend proactive and ongoing engagement with industry and relevant stakeholders during the design phase of any new procurement reform to ensure better outcomes for patients and stakeholders. Price reductions cannot come at the expense of access, innovation and patient safety. IMC and BIOTECanada would recommend the formation of a key stakeholder working group to further study and evaluate proposed changes to the drug procurement and supply chain pathway.
V.https://www150.statcan.gc.ca/n1/pub/11-621-m/11-621-m2025004-eng.htm