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Country Presentations

Country Presentations. Canada. Canada’s Pharmaceutical DNA. and. Key Challenges and. Opportunities. Canada’s Pharmaceutical DNA. Health system. – Population aged 65 and over predicted to reach 25% of total by 2050 – Total expenditure on health (TEH) much higher than OECD average.

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Country Presentations

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  1. CountryPresentations Canada

  2. Canada’sPharmaceuticalDNA and KeyChallengesand Opportunities

  3. Canada’sPharmaceuticalDNA Healthsystem –Populationaged65andoverpredictedtoreach25%oftotalby2050 –Totalexpenditureonhealth(TEH)muchhigherthanOECDaverage –Annualgrowthratesofhealthexpenditurestrong;justbelowOECDaverage PharmaceuticalEnvironment –PharmaceuticalexpenditureasshareofGDPremainsaboveOECDaverage: hassteadilyincreasedsince1990s –Percapitapharmaceuticalspendinghasalmostdoubledsince2000 –Privateshareofpharmaceuticalspendinggrowingfasterthanpublic PricingandReimbursement(P&R) –Extensivepricingpoliciesinplaceatbothfederalandprovinciallevel: includesInternationalReferencePricing(IRP)andpricecuts –HealthTechnologyAssessment(HTA)usedextensivelyatfederaland provinciallevel IntellectualProperty(IP) –WeakerpharmaceuticalIPenvironmentthanotherhighincomecountries –TraditionofactiveIPscepticaljudiciary 3

  4. KeyChallengesandOpportunities Challenges • • • HighrelativeratesofpharmaceuticalexpenditurecomparedtootherOECDcountriesmayprovide incentiveforgovernmentcutsinspending P&Renvironmentlikelytoremainchallenging:moreHTA,moreIRP ChallengingIPenvironment: • • noeffectivepatentlinkageandnopatenttermextension(PTE) increasingnumberofpharmaceuticalpatentsbeingheldasinvalid:patentutilitythreshold beingraisedinjudiciary Opportunities • • • • Abilitytoleverageconceptofhealthyageingforintroducinginnovativetreatments Opportunitytogrowpharmaceuticalspendingthroughnon-publicfinancingmechanismssuchas supplementaryinsuranceand/oroutofpocket(OOP)spending AbilitytointroducePTEthroughEU-CanadaFTA Abilitytousedifferentmarketingstrategiesinhighvs.lowpercapitapharmaceuticalspending provinces 4

  5. PresentationOverview 5

  6. PresentationOverview •Demographicbackground •Macro-economicbackground •Healthsystemoverview •Pharmaceuticaloverview •Pricingandreimbursementpolicies •Intellectualpropertyenvironment •Biopharmaceuticalregulatoryrequirements •Publicprocurementpolicies–pharmaceuticals 6

  7. DemographicBackground 7

  8. Demographics •Totalpopulation:34million •Annualpopulationgrowthrates:between0.91%and1.21%2000- 2010 •Dependencypopulation2010 –Youthpopulation(agedlessthan15):16.5% –Elderlypopulation(aged65andover):14.1% •Dependencypopulationaged65andovergrowingrapidly: predictedtoreach25%oftotalpopulationby2050 8

  9. DependencyPopulation,TrendandForecast,2000-2050 30 25 YouthPopulation(aged lessthan15)%oftotal Population Elderlypopulation(aged 65andover)%oftotal Population 20 15 10 5 0 Source:OECDStat(2012) 2000 2005 2010 2020 2030 2040 2050 9

  10. Macro-economicBackground 10

  11. Macro-economicBackground •GDPperhead:USD40,440(2011) •OECDaverageUSD33,976(2010) •AnnualGDPgrowth2011:2.5% •OECDAverage2011:1.8% •Solideconomicgrowthratesoverpastdecade–hasoutperformedor matchedUS,EU27andOECDaverages •Lownationaldebt:36%ofGDPin2010 •OECDcentralgovernmentdebtaveragecloseto80% 11

  12. RealGDP%Growth1997-2010 6 4 2 Canada EU27total OECDtotal 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 UnitedStates -2 -4 Source:OECDStat (2012) -6 12

  13. HealthSystemOverview 13

  14. GeneralHealthSystemFacts •Nationalhealthinsuranceprogram(“Medicare”) •CentralGovernmentsetsinsurancestandardsthroughCanada HealthAct •13provincialandterritorialhealthinsuranceplansoffersactual coverageandmedicalservices •Traditionalsingle-payermodel,taxfunded •Healthpolicyfragmented,dividedbetweencentralandprovincial governments,especiallypharmaceuticalpolicy(discussedbelow) •Privateprovisionofprimarycarelimitedbutgrowing 14

  15. HealthExpenditure •TEH11.2%ofGDPspentonHealthin2011 –1.7%higherthanOECDaverageof9.5%(2010latestfigures) •70.4%oftotalhealthspendingin2011publicexpenditure –OECDaverage72%(2010latestfigures) •Longtermdecreaseinpublicexpenditureas%ofTEHfrom averagesof74-76%during1970s-1990sto70-71%during2000s •Annualaveragegrowthrate(AAGR)totalhealthexpenditure4.6% peryear2000-2009 –OECDaverage4.7% •AAGRpublicsector4.7%peryear2000-2009 –OECDaverage4.8% •Outofpocketspending14.4%2011 –OECDaverage20.1%(2010latestfigures) 15

  16. TotalExpenditureonHealth%ofGDP,1960-2010 20.00 Canada 18.00 United 16.00 States France 14.00 Germany 12.00 Japan 10.00 United Kingdom 8.00 6.00 4.00 Source: OECDStat (2012) 2.00 0.00 16

  17. PublicExpenditureonHealth,%TEH,Canada,1970-2011 78 Source: OECDStat (2012) 76 74 72 70 68 66 64 17 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

  18. AAGRCanadaandOECDAverages,2000-2009 7 6 5 4 3 Canada OECDAverage US UK 2 Source: OECDStat (2012) 1 0 AAGR AAGRPublicSector 18

  19. PublicExpenditureandOut-of-pocketpayments,%Total ExpenditureonHealth,2010/2011 90 80 70 60 Canada (2011) OECD Average (2010) US(2010) 50 UK(2010) 40 30 20 Source: OECDStat 10 (2012) 0 PublicExpenditure,%TotalHealthExpenditure Out-of-pocketpayments(households),%totalexpenditureon health 19

  20. PharmaceuticalOverview 20

  21. PharmaceuticalOverview •Pharmaceuticalsarecoveredthroughpublicorprivateinsurance •Withinahospitalsettingdrugsadministeredarecoveredthrough publicinsurance •Provincesandterritoriesofferpharmaceuticalinsuranceplans •Plansdifferineligibility,premiums,coverageandformulary design •Canadatop-10pharmaceuticalmarketintheworld–percapita spending2ndhighestintheworld •Stronggrowthinpercapitapharmaceuticalspendingsince 1990s •Between2000-2010percapitaspendingalmostdoubledfrom USD400.7toUSD740.7(PPP) 21

  22. PharmaceuticalSnapshot • • • • • Totalspendingonpharmaceuticalsin2011C$32billion(CIHI) Growthof4%2010-2011 LowergrowththaninthepastbutstillclosetoTEHAAGR Prescriptiondrugsaccountforcloseto85%oftotalspending Relativelyevensplitbetweenpublicandprivatefinancingof prescriptiondrugs:45%vs.55% •Strongergrowthratesinprivatefinancing(6.8%)vs.public financing(2.2%) •Largevariationsinpercapitaspendingfromprovinceto province:C$576inBritishColumbiaandC$710inManitobavs. C$937inNewBrunswickandC$985inNovaScotia •Largevariationsinspendinggrowthfromprovincetoprovince: 1.4%inBritishColumbiaand2%inOntariovs.7.4%in Saskatchewanand9.4%inNewfoundlandandLabrador 22

  23. TotalExpenditureonPharmaceuticalsandOtherMedical Non-durables,%TEH,Canada,1960-2010 Source: OECDStat 20 (2012) 18 16 14 12 10 8 6 4 2 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 23

  24. TotalExpenditureonPharmaceuticals,%ofTEH,1990-2009, CanadaandSelectOECDCountries 25 20 15 10 Canada UnitedStates Germany Japan France 5 Source: OECDStat (2012) 0 19901991199219931994199519961997199819992000200120022003200420052006200720082009 24

  25. TotalPerCapitaSpending,PharmaceuticalsandOther MedicalNon-durables,US$PPP,Canada,1980-2010 800 700 600 500 400 300 Source: OECDStat (2012) 200 100 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 25

  26. TotalPerCapitaSpending,PharmaceuticalsandOther Medical non-durables, US$ PPP, 2010 or Closest Year, OECD 1000 900 800 700 600 500 400 300 200 100 0 Source: OECDStat (2012) 26

  27. PricingandReimbursement Policies 27

  28. PricingPoliciesPatentedMedicines •PatentedMedicinePricesReviewBoard(PMPRB)monitorsand setsthepriceofpatentedmedicines •Judgeswhetherapriceis“excessive”fornewpatenteddrugs andexistingpatenteddrugs •PMPRBregulationsmandatedandguidedbys79-103the PatentAct •PMPRBuses2stepprocesstosetandreviewpricesfornew patenteddrugproducts: 1. 2. Scientificreview Pricereview 28

  29. ScientificReview •Thepurposeofthescientificreviewprocessistoestablish: “leveloftherapeuticimprovementofapatenteddrugproduct” •LeveloftherapeuticimprovementassessedbyHumanDrug AdvisoryPanel •Fourcategoriesoftherapeuticimprovement: 1. 2. 3. 4. Breakthrough SubstantialImprovement ModerateImprovement SlightorNoImprovement 29

  30. PriceReviewProcess •Leveloftherapeuticimprovementusedtodetermineifapriceis “excessive” 1. 2. 3. 4. Breakthrough:excessivepricedeterminedbyinternational referencepricing(IRP);France,Germany,Italy,Sweden, Switzerland,theUnitedKingdom,andtheUnitedStates SubstantialImprovement:priceisexcessiveifhigherofIRPprice ORhighestnon-excessivepricecomparedwithdrugsin therapeuticclass(TCCtest) ModerateImprovement:IRPand/orTCC SlightorNoImprovement:TCCorIRP 30

  31. PMPRBInvestigationsandHearings •PMPRBcaninitiateinvestigationsintoexcessivepricing •Ifexcessivepricingisdetermined,investigatedpartycanagree toalowerpriceandoffsetanyrevenuebasedonexcessive pricing(VoluntaryComplianceUndertaking) •Ifinvestigatedpartydoesnotagreetolowerpricevoluntarily PMPRBcanholdhearingsandultimatelyorderpricetobe loweredanddoublerevenueamountstobeoffset •Hearingdecisionsaresubjecttofederaljudicialreview 31

  32. ReimbursementPolicies •Prescriptiondrugscoveredthroughprivateand provincial/territorialpublicplans •Covers98%ofpopulation •Federalgovernmentonlyprovidescoverageforasmallnumber ofindividuals,circa.1million •Plansvaryinscope,coverageandreimbursementpoliciesfrom province/territorytoprovince/territory 32

  33. GenericSubstitutionandPricing Substitution •Interchangeabilityandsubstitutionrulessetatprovinciallevel •Substitutionrulesdifferfromprovincetoprovince •Biggestprovinces–includingOntario,BCandQuebec–allow, butdo notmandategenericsubstitution •Saskatchewan,Manitoba,PEI,NewfoundlandandLabrador mandatesubstitution Pricing •Highgenericpriceshaveresultedinprovincialpricecaps: i. ii. Ontario:pricescappedat25-35%ofbrandlistprice Quebec:cappedathighestprovincialpricee.g.Ontario iii.Alberta:pricescappedat45-56%ofbrandlistprice iv.BritishColumbia:pricescappedat35-42%ofbrandlist price 33

  34. FederalHTA •CanadianAgencyforDrugsandTechnologiesinHealth (CADTH)conducts“clinical,cost-effectiveness,andpatient evidence”assessmentsforpublicsectorhealthcaredecision makers •CommonDrugReview(CDR): –reviewofDrugSubmissionsfrompublicbodies –providesformularylistingrecommendationstoallCanadianpublicly fundedfederal,provincial,andterritorialdrugplansexceptQuebec. •Only50%ofdrugsthatundergoCDRrecommendedfor reimbursement •Finaldecisionrestswithprovinces/territories–CDRmakes recommendationdoesnotmandateformularylistings 34

  35. Provincial/TerritorialHTA •ProvincesandterritorieshaveownHTAbodies •Quebec:Agenced’ÉvaluationdesTechnologiesetdesModes d’InterventionenSanté •Ontario:MedicalAdvisorySecretariat(MAS) •Alberta:InstituteofHealthEconomics •Provincial/territorialrecommendationsarealsonon-binding 35

  36. IntellectualProperty Environment 36

  37. PharmaceuticalIPOverview •Historyofcompulsorylicensingupto1980s–limitedR&D activity •ComparedtootherOECDcountriesCanadahaslimited biopharmaceuticalIPprotection •JudiciaryactiveinfieldofpharmaceuticalIP–rulingsoften contradictexistingregulationse.g.Bayer(1998),Biolysev.BMS (2005) •Utilityrequirement –growingnumberofcourtdecisionsonthebasisofpatentutilityin relationtopharmaceuticalpatents. –Highpercentageofcaseshaveruledthatpharmaceuticalpatents wereinvalid. –TheCanadianstandardofutilitybeingestablishedthroughthis growingcaselawdiffersfromUSandEUaswellasTRIPS. 37

  38. Pharmaceutical‘PatentLinkage’Mechanism •NoticeofCompliancemechanisminplace •Requiresgenericapplicantstocommentonthepatentstatusof thereferenceproduct •Significantweaknesses: –doesnotprovidethepatentholder(“firstperson”)witharightof appeal –thejudicialproceedingsdeterminingthemeritsofthedisputed patent(s)isasummarynotfullprocess 38

  39. PTEandRDP •Canadadoesnotofferpatenttermextensionsfor pharmaceuticalproducts–currentlyunderdiscussioninEU- CanadaFTA •Canadaoffersa8yearregulatorydataprotectiontermwiththe possibilityofasix-monthpediatricextension •RDPregulatorychangesin2006responsetoBayercase– relianceisgroundsfordataprotection 39

  40. BiopharmaceuticalRegulatory Requirements 40

  41. MarketingAuthorizationforNewChemicalEntities •HealthCanada’s(HC)TherapeuticProductsDirectorate(TPD) responsiblefordrugtestingandapproval •Newdrugsubmissionsrequiredtoundergosafety,efficacyand qualitytestingbyTPD •Averageapprovaltime:18monthsfromsubmissionofNewDrug Submission(NDS)untiltheTPDmakesamarketingdecision •Priorityreview(targetof180days)availableforcertaindrugs (“extraordinaryusenewdrugsubmission”) •HCisanofficialobserverandactiveparticipantinInternational ConferenceonHarmonisationofTechnicalRequirementsfor RegistrationofPharmaceuticalsforHumanUse(ICH) •ICHguidelinesandstandardsadoptedbyHC 41

  42. MarketingAuthorizationforBiologicsandBiosimilars •Biologicaldrugsundergothesameprocedureandtesting requirementsasnewchemicalentities •Subsequententrybiologics(biosimilars)pathwayintroducedin 2010 •Canadianbiosimilarpathwayresemblesthatusedbythe EuropeanMedicinesAgency(EMA) •Keydifference:Applicantsmayusebiologicalreferenceproducts thathave notreceivedmarketapprovalinCanada •RDPprotection/periodsthesameforbiologicsandbiosimilarsas forsmallmoleculedrugs 42

  43. PublicProcurementPolicies– Pharmaceuticals 43

  44. PublicProcurementPolicies–Pharmaceuticals Overview •Pharmaceuticalpublicprocurementcarriedoutatprovincialand hospitallevel–federalpurchasinglimited •Procurementguidelinesissuedbyprovincialgovernments •Grouppurchasingcommon–circa.90%ofhospital/healthcare providerprocurementthroughgrouppurchasingorganization Pan-CanadianPurchasingAlliance •2010sawagreementbetweenallprovinces(expectQuebec)on establishmentofpurchasingalliance •Statedpurposeto“consolidatepublicsectorprocurementof commondrugsandmedicalsuppliesandequipment” •Relativelyfewdrugspurchasedsofar •2012reportofCouncilofFederationannouncedaccelerationof purchasingofbrandeddrugsandexpansiontoincludegenerics 44

  45. Thankyou! 45

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