The Potential Impact of Canada’s Proposed National Pharmacare Program on Rare Diseases

I thought the first post on my blog be about a more relatable topic, particularly for Canadians – Universal Pharmacare! This was a piece I wrote for one of my courses that I feel adds to the conversation around pharmacare but often over-looked: how can pharmacare help people with rare diseases? Enjoy!

We know from from a health care system-wide perspective, there is a compelling argument supporting a universal pharmacare system: increased accessibility to medicines; improved health outcomes; reduced overall costs; and less financial burden on employers and Canadians compared to the current incomplete patchwork of private and public drug plans. Numerous health commissions have recommended national pharmacare dating back to the 1965 Royal Hall Commission to the more recent 2019 Advisory Council Report (1–4).

Although the advantages of a national pharmacare program for the masses is evident, its impact on rare diseases remains unclear. People suffering from rare diseases often have a condition that is debilitating and life-limiting, severely impacting their lives. There are limited treatment options, and even if available, it can cost hundreds of thousands of dollars annually.

This commentary will highlight three key merits of a universal, national pharmacare program in Canada that may have an immediate impact on rare disease populations.

1. Development of a distinct pathway for accessing drugs for rare diseases

Small patient numbers, limited evidence on clinical effectiveness, high costs, and overall uncertainty of the long-term harms and benefits of drugs for rare diseases (DRDs) create a unique situation for regulatory approval, pricing, public reimbursement, and ultimately patient access to these drugs. While these are formidable challenges that a national pharmacare program for the general population will not fully solve, patients with rare diseases will remain in desperate need of these potentially life-altering therapies and therefore a national strategy is warranted. The Federal Advisory Council on the implementation of national pharmacare in Canada and the House of Commons Standing Committee on Health, explicitly recommends a separate rare disease pathway for DRDs (5,6), recognizing that Canada’s current approach towards DRDs is not working and needs to be changed.

At this time, it is unclear what a “distinct” pathway for DRDs will constitute. However, any rare disease strategy’s overarching goal should be to provide improved, equitable, and timely access to promising therapies. This would mean explicit consideration of the unique challenges of DRDs at all levels of the government including regulatory approval (i.e., Health Canada), health technology assessors (i.e., Canadian Agency for Drugs and Technologies in Health), pricing (i.e., Patented Medicine Prices Review Board), and funding (i.e., Provincial Health Ministries). Therefore, reforming Canada’s current approach to DRDs inevitably requires a shared vision among the federal and provincial/territorial governments. The implementation of a national pharmacare program, which already requires considerable cooperation between these governments, provides an ideal window of opportunity to implement a distinct national strategy for rare diseases.

2. Equitable access

In Canada, DRDs are accessed by paying out-of-pocket, having private health insurance, or public coverage.

Paying out-of-pocket for DRDs is entirely unreasonable even for the wealthiest due to their high costs. For instance, Orkambi®, a drug for Cystic Fibrosis, costs $250K per year and Soliris®, a drug for an ultra-rare condition known as Atypical Hemolytic Uremic Syndrome, costs $700K per year. Currently, there are 79 DRDs that cost over $100K per year, representing the fastest growing pharmaceutical market segment in Canada (7).

Most private health insurance plans (including employer-sponsored) exclude or limit coverage of expensive medications because it takes only a few members requiring these medications to bankrupt their plans. As a result, the only remaining option for most Canadians to access DRDs is through public coverage. However, even if a drug is publicly covered in one province or territory, it does not mean that every Canadian will have equal access to it.

In Canada, health care policies are controlled by different levels of government, with the province and territories holding primary responsibility for delivering health care, including public funding decisions for drugs. As such, each province and territory has their own policies for drug coverage but tend to use a general reimbursement review process and special “safety-net” programs in which case-by-case requests for access to some drugs are determined (8). Due to their high costs and overall uncertainty of benefit, coverage decisions of DRDs generally fall into these “safety-net” programs.

Provincial/territorial differences in policies for DRD coverage, usually means a multitude of factors can influence their funding decisions, such as the size and wealth of the province or territory, prevalence of the disease, cost, and media campaigning (9,10). As a result, there exists considerable variation in funding DRDs and eligibility criteria from province-to-province.

A single-payer, universal national pharmacare program could provide equal access to publicly covered DRDs for every single eligible Canadian based on uniform criteria regardless of where they live or how much they earn.

3. Lower drug prices

The high cost of DRDs is one of the main determinants limiting patients’ access to these drugs. Drug companies set high prices to recuperate research and developmental costs associated with bringing a drug into the market with such few patients. While on the other hand, payers are reluctant to provide coverage for these expensive drugs given their inherent uncertainties.

Currently, each province or territory will negotiate drug prices with pharmaceutical companies on their own, considerably diminishing Canada’s potential purchasing power as one unified nation.

Under a single-payer pharmacare program, all ten provinces and three territories would consolidate their bargaining power on behalf of the entire population of Canada to negotiate steep discounts on all drugs, including DRDs. If a drug company does not offer a fair price, it risks being excluded from the entire Canadian market. That risk alone can bring drug prices down to a more affordable level. It also provides drug companies certainty of a larger patient pool for their drug.

It is not surprising then that every country that is currently providing public coverage for an expensive drug like Orkambi®, priced at $250K per year per patient, has one shared characteristic – the presence of a single government entity bargaining with the drug company.

Even the provinces and territories understand the value of having greater purchasing power and its effect on lowering drug prices. To counter-act the inefficiencies of our fragmented system of financing prescription drugs, the pan-Canadian Pharmaceutical Alliance (pCPA) was borne in 2010 and formally established in 2015. The pCPA, on behalf of all participating public drug plans across the country, jointly negotiates drug pricing and supply arrangements with drug companies.

This joint alliance among provinces and territories has led to an estimated $2B in annual cost-savings (6). Despite success in lowering drug prices, the pCPA negotiations are one of the last stages in the pathway to determine public coverage of drugs, largely relying on previous regulatory and pan-Canadian processes. Joint negotiations through the pCPA only begin once a drug is deemed of sufficient quality and safe by Health Canada in addition to a positive recommendation by health technology assessors demonstrating its value for money, effectively excluding most DRDs.

Greater purchasing power also allows governments opportunities to get creative during negotiations to ensure greater accessibility and lower prices for its patients – all of which can have implications for DRDs.

For example, pharmaceutical companies usually have a portfolio of drugs with most of the revenue coming from drugs for the general population. However, more and more companies are increasingly diversifying their portfolio by including DRDs to boost additional revenues. With the implementation of a national formulary of “essential medicines”, which is a chosen list of basic medicines available to all Canadians, it may provide additional avenues to negotiate even better prices by bundling DRDs with these essential medicines. Moreover, transparent and fixed national budgets for DRDs (i.e., spending ceilings) may provide steady returns on the drug company’s investment while increasing availability to Canadians – a win-win situation.

In conclusion, a national pharmacare program with a distinct pathway for the handling of rare diseases has the potential to provide timely and equal access to DRDs for all Canadians, while also supporting innovation and keeping our health care system sustainable. We know that Canadians living with rare diseases deserve better access to health care. A national pharmacare program should represent a key enabling step in bringing positive change and should be embraced by people with rare diseases, their clinicians, advocacy groups and all other stakeholders.

Thoughts?

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References

Morgan S, Daw J, Law M. Rethinking Pharmacare in Canada. C.D. Howe Institute; 2013. Morgan S, Leopold C, Wagner A. Drivers of expenditure on primary care prescription drugs in 10 high-income countries with universal health coverage. CMAJ. 2017;189:E794-9. Adams A, Soumerai S, Ross-Degnan D. The case for a med- icare drug coverage benefit: a critical review of the empirical evidence. Annu Rev Public Heal. 2001;(22):49–61. Gagnon M. A Roadmap to a Rational Pharmacare Policy in Canada. Canadian Federation of Nurses Unions; 2014. Hoskins E. A Prescription For Canada: Achieving Pharmacare For All, Final Report of the Advisory Council on the Implementation of National Pharmacare. Ottawa, ON, Canada; 2019. House of Commons Standing Commitee on Health. Canadians Affected by Rare Diseases and Disorders: Improving Access to Treatment. 2019. Patented Medicine Prices Review Board Annual Report [Internet]. 2017. Available from: https://www.pmprb-cepmb.gc.ca/view.asp?ccid=1380#app2 Menon D, Clark D, Stafinski T. Reimbursement of Drugs for Rare Diseases through the Public Healthcare System in Canada: Where Are We Now? Healthc POLICY. 2015;11(15–32). Chafe R, Culyer A, Dobrow M, Coyte P, Sawka C, O’Reilly S, et al. Access to Cancer Drugs in Canada: Looking Beyond Coverage Decisions. Healthc Policy. 2011;6(3):27. Rachul C, Caulfield T. The media and access issues: content analysis of Canadian newspaper coverage of health policy decisions. Orphanet J Rare Dis. 2015;10(1):102.