getting to access: pricing & reimbursement exercise: setting the payer context sherry o’quinn
TRANSCRIPT
Man i & O ’Qu i n n R e imbu r s emen t S t r a t e g y E x p e r t s (MORSE )
Pricing&ReimbursementExercise:Se4ngthePayerContext
SherryO’QuinnManagingPrincipal
March29,2017
Objec&ve
ProprietaryandConfiden?al 2
Toprovideallpar?eswithabeFerunderstandingofthefactorsthatpayersmustconsiderwhenmakingfundingdecisions.
Health spending as a share of total spending has stabilized at 38%.
ProprietaryandConfiden?al 3
Provincial/territorialgovernmenthealthexpenditureasapropor?onoftotalprovincial/territorial
governmentprograms,Canada,1993to2015.
Drugs are the 2nd largest share of health expenditure Thedrugexpendituresharehasbeenincreasingsincethemid-1980s,andithadaccountedforthesecond-largestshare(16.0%in2014),aWerhospitalspending,since1997.
ProprietaryandConfiden?al 4
Totalhealthexpenditure,shareofselecteduseoffunds,Canada,1975to
2014
42.6% of prescrip&on drug spending is funded by public payers
• In2014,$12.5billion(42.6%)ofprescribeddrugspendingwasfinancedbythepublicsector.• In2014,thepublicshareofprescribeddrugspendingvariedamongprovinces,rangingfrom:o 29.8%inNewBrunswick;o 33.0%inPrinceEdwardIsland;o 45.5%inQuebec;ando 49.9%inSaskatchewan.
ProprietaryandConfiden?al 5
Source:Canada’shealthexpenditure:Spendingonprescribeddrugsincreases,totalgrowthremainsslow(CIHIMediarELEASE-2016.12.15)
Public drug spending reached a high from 2014-2015
• Comparedwithoverallslowgrowthinhealthspending,publicdrugprogramspendingincreased9.2%from2014to2015.o In2014,public-sectorspendingonprescribeddrugsincreasedby4.0%.
• Theintroduc?onofnewandexpensivechemicalstotreathepa??sCàtwo-thirdsofthegrowthinspendingin2015.• Patentexpira?onsandgenericpricingpoliciesarenolongerleadingtosignificantreduc?onsinyear-over-yeargrowth;however,thesavingstheyachievedpersist.
ProprietaryandConfiden?al 6
Source:PrescribedDrugSpendinginCanada,2016(CIHI-2016.12.16)
Payers struggle to manage current budgets within their constrained system.
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StakeholderPressureSignificantstakeholderpressureto
fundmostdrugs(e.g.manufacturers,pa?entgroups,
media,poli?cal,etc).
BudgetsForecastsfarexceedthebudgetsset
bygovernments.
ResourcesTimeandpeoplearerequiredtooffsettheincreasingvolumeof
workload:newlaunches,nego?a?ons,re-evalua?on
Payers have developed strategies to manage drug plan expenditures
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DrugSpecificapproaches:• pCPAstandardnego?a?on
approach• Therapeu?cclassre-
nego?a?ons• Revisionofcriteria,
disinvestment/de-lis?ngs• Morerestric?veand/or
administra?velyburdensomeaccess
Program/Policyapproaches:• Programchangesrelatedto
eligibility,co-pays&deduc?bles• Genericpricinganduptakepolicies• Biosimilarpricinganduptake
policies• Broaddecisionsnottolistorto
delaylis?ngdrugsthatwillhavecostimpact
• Convincegovernment/financetoincreasetheirbudgets
Mostofthedrug-specificandprogram/policytoolsareinuseorhavebeenused…manyarenotidealandlikelynolongerenough.
Payer “toolkits” are likely to evolve
• Drugplanmanagershavebeendiscussinghowtomanagetheirchallengesinpublicforumsandtheirneedtomake“toughchoices”.
• Someofthesearealreadyunderwayincertaindis?nctcircumstances:o Saying“no”tomoredrugso Therapeu?cre-nego?a?ons
• Somearenotformallyinplacebutarebeingdiscussedinvarioussehngs:o Disinvestment(Oncology)o Priori?za?on(pCPAandjurisdic?ons)
ProprietaryandConfiden?al 9
Drug plan “solu&ons” will be imposed unless other alterna&ves are presented
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• Manyoftheapproachesbeingtakenorconsideredarenotidealforanyparty,includingpublicpayers(government).
• DrugPlanManagersdonotfeeltheyhaveothertoolsthatcanbeusedtomanagetheirbudgetsinasustainableway.
• Withoutsomeassistancefromotherstakeholders,governmentswilllikelymakedecisionstomanagetheirbudgetsthroughthesetypesofpolicyanddecisionmechanisms.