Meeting minutes - Technical Working Group September 25, 2018

11:00 a.m. to 1:00 p.m. EDT

Participants: Dr Chris Cameron (Dalhousie University and Cornerstone Research Group), Dr Doug Coyle (University of Ottawa), Marie-Claude Aubin (INESSS), Dr Peter Jamieson (University of Calgary), Dr Frédérick Lavoie (Pfizer Canada), Dr Karen Lee (University of Ottawa and CADTH), Dr Christopher McCabe (University of Alberta and Institute of Health Economics), Dr Stuart Peacock (Simon Fraser University and BC Cancer Agency), Maureen Smith (Patient), Geoff Sprang (Amgen)

Observers: Edward Burrows (Innovation, Science and Economic Development), Nelson Millar (Health Canada)

PMPRB: Tanya Potashnik, Isabel Jaen Raasch, Guillaume Couillard, Matthew Kellison, Richard Lemay, Theresa Morrison

The PMPRB Working Group to Inform the Patented Medicine Prices Review Board (PMPRB) Steering Committee on Modernization of Price Review Process Guidelines (WG) met via teleconference on September 25, 2018.

The Chairperson, Dr. Mike Paulden, clarified that only the final report of the WG will be shared with the Steering Committee. In response to member requests for case studies, Board Staff explained that high-level case studies are being developed to share with the Steering Committee to illustrate how the proposed framework would be implemented. These studies are not designed to address the technical and foundational questions that have been posed to the WG. Board Staff invited members to bring forth potential case studies that would support the issues discussed in the working group. Members representing the pharmaceutical industry indicated they will prepare examples in advance of the final report.

The draft report will be circulated to members on October 5, 2018 and discussed during the meeting on October 12, 2018. Members will discuss and vote on final recommendations.

Members then discussed six topics designed to elicit specific feedback on areas of focus.

Topic 1: Options for determining which medicines fall into ‘Category 1’

Four criteria for classifying a medicine as “Category 1” (i.e., “high priority”) were presented:

1. The medicine is first in class or a substantial improvement over existing medicines
2. The medicine’s opportunity cost exceeds its expected health gain
3. The medicine is expected to have a high market impact
4. The medicine has a high average annual treatment cost

Members were asked the following questions:

1. Should other criteria be considered?
2. What are the relevant metrics for selecting medicines that meet the identified criteria and what options exist for using these metrics?

Members agreed that in general the opportunity cost of a medicine, criteria ‘B’, is potentially an inappropriate tool for screening purposes and should be removed as a classification criterion.

Topic 2: Application of supply-side cost effectiveness thresholds in setting ceiling prices for Category 1 medicines

Feedback was sought on two main issues: potential approaches for implementing a price ceiling based on a medicine’s opportunity cost, and potential approaches for allowing price ceilings above opportunity cost based for certain types of medicines (e.g., pediatric, rare, oncology, etc.). Members were asked the following questions:

1. What are the potential approaches for considering a medicine’s opportunity cost and implementing a price ceiling?
2. Should higher price ceiling(s) be adopted for certain types of medicines? If so, which medicines? How should the higher price ceiling(s) be determined?

Most members expressed the view that a supply side threshold is appropriate but work needs to be done to determine a supply side estimate. There was a concern that given different provinces have different thresholds it would be difficult to determine a threshold appropriate for all jurisdictions. One member suggested using the highest supply side estimate of all jurisdictions including territories. Members discussed possible interim solutions, with some expressing the view that estimates currently used by other agencies in Canada could be appropriate.

Topic 3: Medicines with Multiple Indications

Feedback was sought on options for addressing medicines with multiple indications (e.g., multiple price ceilings or a single ceiling reflecting one particular indication).The following questions were posed to the members:

1. What are the available options regarding pricing for multiple indications?
2. Which option should be recommended, and why?

Some group members expressed that, in principle, the price of a medicine should reflect its value and different indications with different values would have different ceiling prices. Members discussed the challenges with collecting utilisation information by indication and the implementation of indication based price ceilings. One member suggested linking the indication to a patent and determining the cost effective price per patent. Some members expressed that it would be preferable to base the review on the least effective indication, others on a weighted average of all indications and others on the first indication to market.

Topic 4: Accounting for Uncertainty

Members were asked to provide feedback on options for using the CADTH and/or INESSS reference cases to set a ceiling price, as well as options for accounting for and/or addressing uncertainty in point estimates. The following questions were posed to the members:

1. Do existing ‘reference case’ analyses provide the most appropriate estimates from which to derive a ceiling price?
2. If not, what modifications from the ‘reference case’ assumptions are desirable?
3. How should uncertainty be accounted for, or addressed, when setting price ceilings?

Members discussed that there is flexibility in the CADTH review with respect to uncertainty. This flexibility is dealt with via price negotiations with payers. Not all uncertainty is given equal weight and reflected in HTA recommendations after consultation with experts. Members discussed that the outcome of the Health Technology Assessment is normally a range of ICERs and not a point estimate as would be needed for the PMPRB purposes.

One member noted that the value proposition of product would change after being in market for a few years. It was noted that the PMPRB should consider price adjustments based on changes in real world evidence.

Topic 5: Perspectives

Members were asked to provide options to account for the consideration of a public health care system vs societal perspective, including the option of applying a higher value-based price ceiling in cases where there is a ‘significant’ difference between price ceilings under each perspective. Feedback was also sought on how to define a ‘significant’ difference in price ceilings between each perspective. The following three questions were posed to members:

1. What are the key differences between a public health care system vs societal perspective?
2. What are the options to account for these differences?
3. How should a ‘significant’ difference be defined?

Most members expressed the opinion that the public payer/health care system perspective would be appropriate for setting ceiling prices for patented medicines. Members representing the pharmaceutical industry expressed concern regarding using a model that did not consider cash-paying customers. Additionally, they questioned the ability of patentees to determine how benefits are transferred back to the end user specifically in the private market. Another member voiced that there is increased uncertainty with no real impact when use societal perspective.

Topic 6: Market Size

Members were asked to provide feedback on approaches to derive an appropriate affordability adjustment to a medicine’s ceiling price based on an application of the market size and GDP factors (e.g. based on the US ‘ICER’ approach). The specific questions posed were:

1. What approaches are available to consider an ‘affordability adjustment’ to a medicine’s ceiling price?
2. Should other factors be considered (in addition to market size and GDP)?
3. How should each of these factors be considered?

Members discussed whether medicines with a high market impact should have a lower cost effectiveness threshold. The members representing the pharmaceutical industry expressed concern that it is difficult to prospectively estimate market size and budget impact across different payers. The need for periodic reassessments of thresholds was discussed.

At the conclusion of the meeting, it was reiterated that the next WG meeting will take place October 12 during which the draft report will be discussed. The draft recommendations will be circulated a week before the meeting. A vote with respect to these recommendations will occur during the meeting before the draft final report is written. The final report will incorporate all member feedback and recommendations that were considered.