PP86 Impact Of Health Technology Assessment On Drug Price Negotiations: Canada

Abstract

Introduction:

Subsequent to review by Canada's two central health technology assessment (HTA) agencies, confidential drug prices are negotiated by the pan-Canadian Pharmaceutical Alliance (pCPA) on behalf of public drug plans. This analysis is the first to examine characteristics of drugs considered for negotiation, and the duration of negotiations, from inception in 2011 to August 2017. The objectives were to identify how HTA recommendations impacted price negotiations, and in particular the role of health economics in the process.

Methods:

The dataset contained 208 drug indications from the pCPA archives: those with a decision to negotiate (n=155) or a decision not to negotiate (n=53). Data were abstracted from the publicly-maintained websites of the respective agencies; descriptive statistics were conducted.

Results:

There was close but imperfect alignment between the HTA agency listing recommendation and the pCPA's decision to negotiate. The incremental cost-effectiveness ratio (ICER) of negotiated drugs (as estimated by HTA agencies) approached CAD 200,000/QALY (i.e. USD 157,000) for oncology drugs, but was closer to CAD 100,000/QALY (i.e. USD 78,000) for non-oncology drugs, revealing that negotiations would require a substantial discount to achieve conventionally ‘acceptable’ value-for-money. ICERs were influential to non-oncology drug recommendations (and were increasingly used to set pCPA negotiation targets) but did not appear to influence oncology drug HTA recommendations. The time period required to initiate negotiations was dramatically shorter for oncology versus non-oncology drugs (53 versus 263 days), and also differed markedly between therapeutic areas. The time period for pCPA activities was surprisingly similar for drugs recommended without a price condition and for those conditional on a price reduction.

Conclusions:

These findings revealed an implicit prioritization pattern at the pCPA, as well as the evolving role of health economics in Canada's two-stage reimbursement process.