The New Drug Landscape: International Availability and Pricing

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1. High-cost orphan drugs increasingly dominate the new drug landscape

In 2015, 41 new drugs received market approval in Canada and the PMPRB7, exceeding the annual average of 35 new drug launches from 2009 to 2014; 2016 was a much less active year, with 30 new active substances approved. An increasing share of new drugs received an orphan designation from the FDA and/or the EMA, reaching 54% in 2015 and 43% in 2016, a much higher share than the average of 33% in previous years. Oncology treatments continued to represent a large proportion of the new drugs: 27% of all new drugs introduced in 2015 and 2016.

2. Drugs launched since 2009 accounted for approximately one quarter of all brand-name pharmaceutical sales by Q4-2016

New drugs have a steep year-over-year uptake in sales. By Q4-2016, drugs launched in the Canadian and PMPRB7 markets since 2009 accounted for 23.8% of the total brand-name pharmaceutical market in Canada. The impact on pharmaceutical sales varied depending on the number and therapeutic relevance of the drugs launched in each particular year. For example, those launched in 2014, which included the new drugs for hepatitis C, had a greater effect on sales than the drugs launched in previous years. The sales for drugs launched in 2015 were highly concentrated, with antineoplastic drugs and antivirals together accounting for over 60% of new drug sales in Canada and the PMPRB7 in Q4-2016.

3. Fewer drugs are launched in Canada then in its PMPRB comparator countries

Fewer new drugs received market approval in 2015 through Health Canada (20) than through the FDA in the US (40) and the EMA in Europe (31), the two largest markets.

Longer term trends also show that Canada had fewer launches than most of its PMPRB comparator countries, many of which had lower average patented drug prices. Half of the new drugs launched from 2009 to 2015 had available sales in Canada by Q4-2016, placing Canada eleventh among the OECD countries. Despite this, Canada ranked third in terms of the corresponding OECD sales for these drugs (93%), suggesting that the higher-selling drugs were launched.

While this comparison reflects Canada’s relative international position in terms of drugs with available sales, it does not completely characterize the availability of new drugs. Like other countries, Canada approved additional drugs over this time period that had not yet recorded sales in MIDAS by Q4-2016; if these drugs were included, Canada’s share of new drugs launched would have increased to 62%.

4. Many 2015 drugs had high treatment costs, but few demonstrated more than a moderate level of therapeutic improvement

Of the 41 new drugs approved in Canada and the PMPRB7 in 2015, more than half were designated as orphan drugs, most of which came with very high treatment costs. Many of these orphan drugs were used for the treatment of cancer. In total, oncology drugs made up approximately one-third of all of these new drugs in 2015 at an average cost of $12,000 per 28-day treatment.

Twenty of the 41 new drugs launched in 2015 received market approval in Canada, accounting for 80% of the total new drug sales by Q4-2016. In keeping with the trend in previous years, only a few of the new drugs were assessed by the PMPRB as breakthroughs or as offering a significant level of therapeutic improvement.

NPDUIS is a research initiative that operates independently of the regulatory activities of the PMPRB.