Canadian policy makers’ views on pharmaceutical reimbursement contracts involving confidential discounts from drug manufacturers

Abstract

Pharmaceutical policy makers are increasingly negotiating reimbursement contracts that include confidential price terms that may be affected by drug utilization volumes, patterns, or outcomes. Though such contracts may offer a variety of benefits, including the ability to tie payment to the actual performance of a product, they may also create potential policy challenges. Through telephone interviews about this type of contract, we studied the views of officials in nine of ten Canadian provinces. Use of reimbursement contracts involving confidential discounts is new in Canada and ideas about power and equity emerged as cross-cutting themes in our interviews. Though confidential rebates can lower prices and thereby increase coverage of new medicines, several policy makers felt they had little power in the decision to negotiate rebates. Study participants explained that the recent rise in the use of rebates had been driven by manufacturers' pricing tactics and precedent set by other jurisdictions. Several policy makers expressed concerns that confidential rebates could result in inter-jurisdictional inequities in drug pricing and coverage. Policy makers also noted un-insured and under-insured patients must pay inflated "list prices" even if rebates are negotiated by drug plans. The establishment of policies for disciplined negotiations, inter-jurisdictional cooperation, and provision of drug coverage for all citizens are potential solutions to the challenges created by this new pharmaceutical pricing paradigm.

“There is always a better way”: Managing uncertainty in decision making about new cancer drugs in Canada

“…Unfortunately, those invitation requests to be interviewed were declined as were all subsequent requests for interviewees to suggest other potential interviewees in the Atlantic Region. Similar difficulties recruiting Atlantic drug decision makers have been reported elsewhere …”

“…Some provide comparatively extensive coverage, while others have income eligibility restrictions and/or substantial deductibles, or only provide coverage to particular groups (eg, seniors and persons on income assistance) . In most parts of Canada, persons without employer‐sponsored or private extended health benefit plans often have substantial out‐of‐pocket costs for drugs . These different approaches lead to uncertainty about how decisions are made and the legitimacy of those decisions, if they vary from 1 jurisdiction to another.…”

“…Similar difficulties recruiting Atlantic drug decision makers have been reported elsewhere. 17,23 e488 DRIEDGER ET AL.…”

Dealing with uncertainty and high prices of new medicines: A comparative analysis of the use of managed entry agreements in Belgium, England, the Netherlands and Sweden

“…Further, even in countries where the ICER does incorporate the confidential discount, the problem remains for comparator medicines as the competitor manufacturer does not officially know the amount of the discount and can only submit a best estimate (usually including some sensitivity analysis with different prices) of the ICER of the new medicine. A survey among policy makers in Canada highlighted the various potential threats in countries in which MEAs are negotiated at subnational level and rebates are confidential (Morgan et al, 2013). These include inequities in medicines pricing and coverage across regions and, where pharmaceutical coverage is not universal, the issue of uninsured or underinsured patients not being able to benefit of the lower price negotiated by the health insurance plan (Morgan et al, 2013).…”

“…A survey among policy makers in Canada highlighted the various potential threats in countries in which MEAs are negotiated at subnational level and rebates are confidential (Morgan et al, 2013). These include inequities in medicines pricing and coverage across regions and, where pharmaceutical coverage is not universal, the issue of uninsured or underinsured patients not being able to benefit of the lower price negotiated by the health insurance plan (Morgan et al, 2013). Similarly, price confidentiality means it is not possible to assess the impact of financial agreements on price and budget impact as highlighted for the case of postlaunch studies in France .…”