Reimbursement and market access are critical milestones for commercial success of new biotechnologies, and planning for reimbursement should begin long before regulatory approval. The road to reimbursement is marked by many challenges, not least of which is demonstrating value in terms of both clinical and cost effectiveness. No longer is it sufficient to demonstrate only efficacy, safety and quality (the requirements for regulatory approval). Payers (public and private) now insist on clear evidence of clinical and economic value confirmed through rigorous health technology assessments (HTAs). And budget impact is an additional factor that can limit access even for drugs (eg. Sovaldi (sofosbuvir) for hepatitis C) that have clearly demonstrated both clinical and cost effectiveness.
Health Technology Assessments (HTAs)
Formal HTA reviews are a requirement in most developed countries and Canada has been a leader developing HTA standards and procedures. The Canadian Agency for Drugs and Technology in Health (CADTH)1 and the Institut national d’excellence en santé et en services sociaux (INESSS)2 in Québec conduct assessments of all new prescription drugs and biologics, and recommend whether the new technologies should be reimbursed by the federal, provincial and territorial drug benefit plans. Not only are these recommendations critical for public reimbursement, they are increasingly important for private reimbursement as well.
Although the formal CADTH / INESSS HTA review processes commence just before or after market authorization (Notice of Compliance or “NOC” from Health Canada), planning for the HTA review should begin well before and often concurrently with Phase 2 clinical trials, if not earlier. This timing is important because the Phase 3 trials need to be developed with HTA, reimbursement and market access in mind. Trial design (double-blind randomized controlled trial is the gold standard), selection of comparators, primary and secondary outcomes, patient sub-populations, and quality of life measures are important elements that should be considered in the Phase 3 clinical trial program.
For most new drugs and biotechnologies, manufacturers face considerable challenges when it comes to developing and conducting clinical trial programs. For rare (orphan) diseases the barrier is small patient populations that make it difficult to recruit sufficient patients to power statistically significant differences in clinically meaningful outcomes. Moreover, the outcomes may only be surrogate markers and not the clinically relevant outcomes preferred by payers.
Case Study: PCSK9s
For example, approval of the recently launched PCSK9s3 (ie, Praluent (alirocumab), Repatha (evolocumab)), a new class of lipid lowering medications for the treatment of familial hypercholesterolemia, relied primarily on reduction of low-density lipoprotein cholesterol (LDL-C) as the primary outcome. LDL-C is a laboratory measure that often serves as a surrogate marker for cardiovascular events. However, HTA agencies would prefer to see changes in morbidity (e.g., cardiovascular events) and mortality as the primary outcomes in the clinical trials. And yet, this would have been difficult for the PCSK9s given the small patient population and the extended time horizon necessary to record sufficient morbidity and mortality events to be clinically and statistically meaningful.
Ultimately, HTA agencies accept surrogate markers as proxies for outcomes as long as there is sufficient evidence demonstrating a clear correlation between the surrogate marker and the outcome. Ideally there will be follow-on or extension trials that will help confirm that the new technology truly offers benefits in morbidity and mortality.
Early Scientific Advice
Leading pharma and biotechnology companies that recognize the challenges in developing clinical trials that are relevant to both regulators and HTA agencies will often seek early scientific advice from HTA agencies (sometimes in conjunction with regulatory agencies). This advice, while non-binding and offered on a fee-for-service basis, can provide valuable insights and suggestions for developing a clinical trial program that address both the requirements of the regulator and the evidence expectations of the HTA agency and payer.
The National Institute for Health and Care Excellence (NICE)4 in the UK was the first HTA agency to develop a scientific advice service, and this type of service is now offered in several countries including by CADTH in Canada, which modeled its program on NICE.
Early scientific advice is but one element of the pre-market activities that are critical to market access success. Payer engagement is important throughout the product life cycle and as such it is about the continuing relationship between the manufacturer and the national and regional decision makers. The objective of payer engagement is to establish professional relationships between manufacturers and payers that maintain clear lines of communication, foster understanding of each others organization and over time develop trust and credibility. Larger pharma companies maintain regional staff that are tasked with maintaining relationships locally, whereas smaller firms will have a national person in a senior role with responsibilities for establishing and maintaining relationships with payers and HTA agencies at all levels.
It is important to note that manufacturer –payer relationships are not about becoming “partners” or “friends”, but rather they are about manufacturer representatives establishing credibility with the payers. These relationships will pay dividends when it comes to negotiating risk sharing agreements typically referred to as product listing agreements or “PLAs” negotiated with public payers through the pan Canadian Pharmaceutical Alliance (pCPA)5 process. And this is not because longstanding relationships result in better deals per se, but rather because trust and credibility foster frank and honest negotiations. It is no surprise therefore that the most difficult and protracted negotiations are those led by foreign-based global pricing teams or their equally foreign consultants. Foreign-based global pricing teams are a fixture with large pharma companies, however, the best firms empower their Canadian affiliates (and local consultants) to lead negotiations.
Price Regulation, pCPA and PMPRB
The PLAs established through the pCPA process establish (usually) confidential net prices however this is not the only mechanism for limiting prices in Canada. The Patented Medicine Prices Review Board (PMPRB)6 has a mandate to ensure prices of patented medicines in Canada are not excessive. The PMPRB applies to both domestic therapeutic class price comparison and to international price comparisons to limit introductory prices of new patented medicines. Post introduction, prices cannot increase faster than inflation as measured by the consumer price index (CPI) and may never exceed the highest international price among the PMPRB seven reference countries.
The PMPRB and provincial payers (on their own or through pCPA) work independently of each other such that an agreeable price to one may appear excessive to the other. And the confidential rebates paid by manufacturers to provincial payers are typically not included the calculation of the average transaction price that is regulated by the
PMPRB. The PMPRB is currently engaged in a comprehensive review of its mandate with an objective of becoming more relevant to payers. New, tougher PMPRB price guidelines are expected in 2018. Meanwhile, the pCPA process continues to evolve. Taken together, it is expected that there will be greater collaboration between PMPRB and pCPA and perhaps even coordination or harmonization at certain levels.
Market Access is Complex and Evolving
While the specific pricing, reimbursement and market access mechanisms described above are unique to Canada, their complexity is not. Each country has its own complex systems of national and regional HTA, pricing and reimbursement mechanisms reflecting the underlying health care systems they serve. Although there are many similarities between Canada and other countries in terms of reliance on evidence-based methodologies for assessment, implementation and decision making processes are unique to each country.
Market access is at best a challenging endeavour in Canada (and globally!) that is ever evolving with new regulations, policies and methodologies employed by payers and regulators to assess value. Investors and analysts have become more sophisticated when it comes to market access – no longer are they looking only at regulatory approval but more importantly they need to be convinced that timely reimbursement is both feasible and probable.
Above all else it is critical to start early. Too often, small emerging biotechs find out the hard way (and too late) that convincing payers (public and private) to pay for innovative new technologies is a significant challenge. Big Pharma recognized some time ago that regulatory approval and market authorization are only the first step of a long journey and that it is essential that there be careful planning and sufficient resourcing to support strategic planning, model development, dossier preparation and payer engagement.
3. Proprotein convertase subtilisin/kexin type 9
About the Authors
Kaitlyn Proulx (Kaitlyn.Proulx@pdci.ca) is PDCI’s Managing Director with responsibility for managing the firm and leading the team of twenty senior consultants and support staff.
W. Neil Palmer (Neil.Palmer@pdci.ca) founded PDCI in 1996 and serves as principal consultant on many of PDCI’s pricing and reimbursement engagements.
About PDCI Market Access Inc. PDCI is Canada’s leading pricing and reimbursement consultancy featuring senior consultants with clinical, health economic, HTA, pricing and strategic reimbursement expertise. (www.pdci.ca)