The concept of a national or interprovincial formulary has been debated by policy makers for many decades now. While significant progress has remained elusive throughout much of this time, the past few years have seen an unprecedented level of interprovincial drug plan cooperation. Indeed, this trend appears to be gathering momentum, as most provincial drug plans continue to take collective action to moderate their reimbursement expenditures relating to both innovative and generic drugs. Thus far, innovative drug costs have been addressed through the joint negotiation of industry payor agreements, generally referred to within the industry as Product Listing Agreements. The first Pan-Canadian action addressing generic drugs will see agreements being reached with manufacturers, such agreements reducing the list price of six targeted molecules to a threshold equivalent to 18% of the innovative comparator product's price.
There is good reason for interested parties such as innovative and generic drug manufacturers to pay attention to the interprovincial initiatives being undertaken, as there remains a great deal of uncertainty over how the scope, objectives and process of such initiatives could evolve and develop over time. Certainly, there are legitimate policy reasons that encourage public drug plans to explore the furthering of interprovincial cooperation, and it would be counterproductive to dispute such. Alternatively, there are also legitimate reasons for pharmaceutical manufacturers to be concerned with whether these initiatives could impact their business models or the extent of drug therapies made available in the Canadian marketplace. How these interprovincial initiatives develop and how their scope and processes become defined throughout the development process will be critical, not only to public drug plans and pharmaceutical manufacturers, but most importantly, to the well-being of Canadian patients. Done correctly, these interprovincial initiatives could present to manufacturers and stakeholders a more streamlined and transparent drug listing process. Done incorrectly, it could present quite the opposite, that being a delayed and opaque challenge to market access.
Pathway Advisory Services has been pleased to help numerous key clients to better understand, contextualize and address the risks and opportunities posed by the increasingly prevalent interprovincial initiatives.