Rare disease innovators simply may not seek Canadian approval for new medicines if unable to obtain timely federal approval of prices that are comparable to other countries
OTTAWA, August 9, 2019 – Canadians with rare diseases will have far fewer innovative new treatments available to them in the future now that new very restrictive pharmaceutical price regulations have received final approval by the federal government, warns the Canadian Forum for Rare Disease Innovators (RAREi) – a group of global biopharmaceutical companies with a specific focus on researching, developing and commercializing treatments for rare diseases.
“The lack of a rare disease strategy in Canada already creates challenges for companies operating in the orphan medicines space,” said Bob McLay, Chair of RAREi. “These new regulations will mean Canada will be so out-of-line with other international markets that they will place Canadian patient access at risk.”
His reaction is in response to the federal government’s announcement of regulatory reforms addressing how the Patented Medicine Prices Review Board (PMPRB) regulates prices for innovative treatments. The changes, aimed at reducing the list price of innovative medicines by at least 25 per cent, and likely much more, will impose a lengthy, highly bureaucratic and potentially unworkable regulatory burden on all innovative pharmaceutical companies operating in Canada. Those challenges will be particularly damaging to many smaller companies that are focused on meeting the needs of people coping with rare diseases.
The specific concerns are outlined in more detail in an open letter to the Prime Minister issued by RAREi today. The letter notes that RAREi members are committed to cooperating with governments across Canada to ensure they receive optimal value from their investments in life-sustaining treatments. The letter urges the federal government to reconsider its current approach to pricing reform and engage with the life sciences community to create a workable and efficient system that encourages rare disease innovators to keep making new treatments available to Canadians who need them.
The new pricing rules, which could in fact, require orphan medicine innovators to offer reductions of as much as 70 to 95 per cent in order for Canadian government approval of an acceptable price, will make it highly unlikely that companies will be able to introduce new treatments here.
As it is, the Canadian pharmaceutical review and approval system lacks sufficient flexibility to properly account for the distinct development characteristics of creating innovative treatments for conditions affecting small numbers of patients (diseases affecting fewer than 1 in 2,000 people). Even though most rare disease patients live with few or no effective treatments, studies demonstrate that rare disease therapies are launched in Canada later than in the United States and/or Europe already and, in many cases, are not even available for patients in Canada. Moreover, the proposed policy shift will constrict the Canadian life sciences ecosystem because if its heavy dependence on innovative pharmaceutical industry support.
About the Canadian Forum for Rare Disease Innovators (RAREi)
The Canadian Forum for Rare Disease Innovators (RAREi) is a group of the Canadian operation of global biopharmaceutical companies with a specific focus on researching, developing and commercializing treatments for rare diseases. Its members are: Alexion Pharma Canada Corp., Amicus Therapeutics, Inc., Biogen Canada Inc., Biomarin Pharmaceutical Inc., Horizon Therapeutics Canada, Ipsen Biopharmaceuticals Canada Inc., Mitsubishi Tanabe Pharma Canada Inc., Recordati Rare Diseases Canada Inc., Sobi Canada and Vertex Pharmaceuticals (Canada) Inc.
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Open Letter to the Prime Minister
August 9, 2019
The Right Honourable Justin Trudeau, PC, MP
Prime Minister of Canada
80 Wellington Street
Ottawa, Ontario K1A 0A2
Subject: Impact of pharmaceutical pricing changes on rare disease patients in Canada
Dear Prime Minister Trudeau,
On behalf of the Canadian Forum for Rare Disease Innovators (RAREi) – a group of global biopharmaceutical companies[1] with a specific focus on researching, developing, and commercializing treatments for rare diseases – I am writing to express our disappointment with recent revisions to the Patented Medicines Regulations approved by your government.
To be clear, we understand the challenges governments face, particularly when it comes to the evaluation of rare disease medicines for public funding. That is why we have committed to work with you to meet your government’s objectives, while at the same time, supporting the delicate ecosystem that is required to support the introduction of new therapies.
RAREi members were dismayed that after more than eighteen months of consultation, during which multiple stakeholders raised substantial concerns and proposed many solutions and alternatives, the regulations passed were virtually unchanged from what was initially presented. The RAREi membership remains prepared to contribute to addressing your government’s objectives to make medicines more affordable, accessible and appropriately used. Our differences relate entirely to the methods you plan to pursue.
The changes you approved, which are aimed at significantly reducing the list price of innovative medicines will impose a lengthy, highly bureaucratic and potentially unworkable regulatory burden on all innovative pharmaceutical companies operating in Canada, and could deter other companies from bringing new medicines to Canada in the future. Those challenges will be particularly damaging to rare disease innovators, many of which are Canadian biotechnology companies focused on meeting the needs of people coping with orphan diseases.
These diseases are often severe conditions that affect a very small proportion of the population – fewer than one in 2,000 Canadians. Compared to other disease areas, Canadians with rare disorders already face unique challenges, including substantial barriers to accessing the treatments they need. In particular, the Canadian pharmaceutical review and approval system lacks sufficient flexibility to properly account for the distinct development characteristics of creating innovative treatments for conditions affecting small numbers of patients.
To put things in perspective, the academic literature consistently demonstrates that rare disease therapies are launched in Canada later than in the United States and/or Europe and, in many cases, are not even available for patients in Canada. A recent review noted that more than 95% of orphan medicines receive regulatory approval in Canada after approval in the United States or Europe, with a median delay of 340 days.[2]
That is because none of the elements of the lengthy Canadian pharmaceutical review and approval system – including regulatory review and approval, pricing review, health technology assessments, product negotiation processes and funding frameworks – are organized appropriately to account for the distinct nature of the development process for medications designed to treat small patient populations. Canada is virtually alone globally in resisting the introduction of tailored review processes and incentives to encourage manufacturers to develop and commercialize rare disease treatments. These new regulations will only exacerbate an issue that the rare disease community has been trying to resolve for many years.
For rare disease innovators, the most concerning aspect of the changes to the Patented Medicine Prices Review Board (PMPRB) pharmaceutical price review process is the reliance on cost-effectiveness analyses produced by Canadian health technology agencies (either the Canadian Agency for Drugs and Technologies in Health or Quebec’s Institut national d’excellence en santé et en services sociaux). Setting non-excessive price thresholds by relying on these evaluations is extremely problematic for medicines developed for small populations because of greater uncertainty in producing clinical data and higher per-patient costs. Such assessments are already heavily skewed against rare disease treatments. Moving these cost-effectiveness considerations into the price assessment process will have a significant negative impact on patient access. Ultimately, we believe that determinations of a medication’s value should be left to the pharmacare program administrators – not a federal price regulator, whose regulatory mandate is limited to ensuring that the maximum prices are not excessive.
Your government’s stated objective is to reduce average innovative pharmaceutical prices, with a forecasted impact on industry of around 10% per year during the next ten years. In fact, several case studies examining the effects of the new rules on rare disease medications particularly, indicate that the reforms will lead to mandated price reductions of as much 70-95%[3] for rare disease treatments.
Prime Minister, such price reductions would simply not be workable in a global market in which the Canadian price would be a fraction of what is being charged in other jurisdictions and insufficient to support the cost of operations here, especially for smaller companies.
The inevitable result will be a reduction in Canada’s attractiveness as a market for these treatments and will delay or eliminate access for patients. A recent study demonstrated a clear link between medication prices and the perception of a given jurisdiction as a favourable launch destination. It concluded that price regulations leading to significantly lower transparent medication prices would likely increase launch delays and significantly reduce Canada’s future attractiveness as a preferred launch destination.[4]
Beyond the obvious negative impact this will have on patients, the Canadian life sciences ecosystem is heavily dependent on innovative pharmaceutical industry support. If, as expected, Canada becomes a late-tier launch country globally as a result of this policy shift, it will become significantly more challenging to undertake research here, including clinical trials. This means that numerous research institutes, academic health centre research arms, contract manufacturing and research operations, early-stage pharmaceutical developers and the support system that nurtures them will be challenged to maintain their presence.[5]
Moreover, this change in policy appears to run counter to your own government’s recent efforts to enhance access to rare disease treatments. RAREi truly appreciates your government’s recognition of the challenges faced by the Canadian rare disease community in accessing necessary therapies in Budget 2019. Your commitment to investing $1 billion during the two years beginning in 2022-23 and up to $500 million annually thereafter to support a rare disease strategy is a welcome step towards more comprehensive coverage for Canadians with rare diseases. In this context, the PMPRB reforms seem counterproductive. The funding promised in Budget 2019 will be compromised by the new pricing reforms, given that they will likely result in rare disease therapies not being made available in Canada.
While RAREi is cognizant of your desire to ensure sustainable pricing, the reality remains that the national cost burden represented by patented medications and their prices has been stable and moderate for the past 20 years.[6] More specifically, in terms of the impact of rare disease treatments on national medication costs, a recent PMPRB analysis indicated that Canada spends less than 2% of its national medications bill on non-oncology orphan treatments and ranks in the middle of the developed world in terms of its spending on such medicines.[7]
In conclusion, the new PMPRB price review framework will lead to a highly uncertain and unworkable system that will further diminish Canada’s attractiveness as a market for these treatments. For a country that aspires to be an innovative leader and offer patients world-class health care, these reforms appear to represent a step backwards.
RAREi members are committed to cooperating with governments across Canada to ensure they receive value from their investments in life-sustaining pharmaceutical treatments. The national pharmacare discussion presents an important opportunity to develop a tailored approach to rare disease treatments which would provide greater benefits for patients, the health system and Canada’s innovation economy. RAREi, along with other industry associations, are well positioned to bring forward global experience to create a Canadian solution that addresses the need for accessible, affordable and appropriate treatments for rare diseases.
In closing, we urge you to reconsider your current approach to pharmaceutical pricing reform and engage with the life sciences community to create a workable and efficient system that encourages access to innovative therapies for the eligible Canadians who need them.
We would welcome an opportunity to begin a collaborative dialogue on this issue.
Thank you for your consideration.
Yours sincerely,
Bob McLay
Chair of the Canadian Forum for Rare Disease Innovators
[1] Alexion Pharma Canada Corp., Amicus Therapeutics, Inc., Biogen Canada Inc., Biomarin Pharmaceutical Inc., Horizon Therapeutics Canada, Ipsen Biopharmaceuticals Canada Inc., Mitsubishi Tanabe Pharma Canada Inc., Recordati Rare Diseases Canada Inc., Sobi Canada and Vertex Pharmaceuticals (Canada) Inc.
[2] Rawson, N., Fraser Institute, Regulatory, Reimbursement, and Pricing Barriers to Accessing Drugs for Rare Disorders in Canada, 2018: https://www.fraserinstitute.org/sites/default/files/barriers-to-accessing-drugs-for-rare-disorders-in-canada.pdf
[3] https://www.canadianhealthpolicy.com/products/new-patented-medicine-regulations-in-canada–case-study-of-a-manufacturer—s-decision-making.html
[4] https://www.innovateforlife.ca/sites/all/themes/imc3/files/2019_01_29_IMC_PhRMA_LaunchSequencing_vFINAL3.pdf
[5] See a recent profile of the Ontario life sciences sector for an indication of the implications of this policy change: https://lifesciencesontario.ca/wp-content/uploads/2019/03/LSO-Economic-Study_Final-Report_28FEB2019.pdf
[6] https://business.financialpost.com/opinion/drug-prices-arent-a-big-problem-but-ottawas-trying-to-control-the-market-anyway
[7] Lungu E, What is the “Expense” for Expensive Drugs for Rare Diseases? Patented Medicine Prices Review Board presentation, 2019 CADTH Symposium, April 2019: https://cadth.ca/sites/default/files/symp-2019/presentations/april15-2019/A1-presentation-elungu.pdf.