|
Summary of Quebec Ministry of Health
SUMMARY OF QUEBEC MINISTRY OF HEALTH
PROPOSED PHARMACEUTICAL POLICY
POLITIQUE DU MÉDICAMENT
The Politique du médicament was submitted to the Québec National Assembly December 16, by the Minister of Health. This document contains significant proposed policy changes that would guide the operation of the province's drug plan. The document includes changes to patient contribution levels, the drug listing process and industrial development issues. This proposal will be debated at the National Assembly when the session resumes in the New Year. The key policy changes contemplated are summarized below.
In general, the policy and the discussions reflect the philosophy that pharmaceuticals are cost-effective in reducing other health care costs when there is optimal use. There is a clear recognition that policy changes are necessary because of continued cost increases, partly stimulated by sub-optimal drug use but the proposed policy changes are tempered by an objective to provide access to new medicines and industrial development considerations.
The reader is cautioned that this is an unofficial translation and summary. Brogan Inc. has taken all steps to render the correct interpretation but accepts no responsibility for decisions or actions which may be based on this summary.
MAJOR POINTS
1) PATIENT CONTRIBUTION
Under the new policy, seniors who receive the maximum guaranteed income supplement would not be required to pay any contribution to their drug cost. The current maximum contribution is $200 per person per year for this group of seniors. The rationale for eliminating the patient contribution for these low-income seniors is to take account of their ability to pay and lower other health system costs from optimal drug use.
2) ENDING THE "NO PRICE INCREASES" POLICY
The government has recently refused manufacturers' requests for price increases. The policy document recognizes that the parallel drug trade industry has created pressure on manufacturers to reduce the Canada-US price differential. This continued pressure will force the government to adopt a more flexible position. The proposed policy would permit price increases under certain terms and conditions outlined below:
- Price increases would be only authorized at specific periods, upon updating the formulary;
- Price increases would be limited to drugs listed for at least five years;
- A global limit for price increases for all the manufacturer's products altogether would be CPI less 0.5%;
- The manufacturer could adjust price increases across products, but no specific drug could exceed 1.5 times the global limit of CPI less 0.5%;
- In specific cases, a larger increase may be allowed if 1) the financial impact is small and it is cost-effective, 2) the discontinuation of the drug could be catastrophic for some individuals;
- Price indexation can be cumulated for three years, while the cumulative period cannot start prior to January 2005.
3) RISK-SHARING AGREEMENTS
The policy proposes minimizing the financial impact of price increases on the province through risk-sharing agreements. It would be used to allow more flexibility for medications that present a significant innovation. Risk-sharing agreements could also be used to promote the optimal use of drugs subject to the agreement. (Brogan Inc. comment: The emphasis on the optimal use of drugs is a central theme of the proposed policy.)
- Risk-sharing agreements could include compensation given to the government when the company's commitment does not materialize. Compensation could take the form of price decreases, repayments to government, sharing the wholesale margin, etc.;
- The agreement would establish a precise list of indicators for monitoring compliance, which would be accessible to all parties;
- The agreement would establish periodic adjustments measures to adapt to the evolution of the market;
- The agreement would ensure equity between public and private plans;
Brogan Inc. comment:
This is not dissimilar to the ODB risk-sharing agreements although with the potential for a wider scope, more monitoring and government intervention.
4) LIST PRICE OF GENERICS
It is proposed that the price of the first generic should be 60% of the brand price, and subsequent generics at 90% of the price of the first generic (54% of brand). Ontario requires a 70% and 63% discount from the brand price. The policy document contends that the financial consideration paid by generic manufacturers to pharmacists in the form of free goods, etc., which are illegal in Québec, indicate that generic company profit levels are high enough to support the price reduction.
5) MEASURES TO ENCOURAGE OPTIMAL USE
The government recognizes the benefits of improving the dissemination of information to stakeholders to encourage optimal-use through a better understanding of drug utilization. The government realizes the importance of improving the quality of research not only within its own organization (e.g. Conseil du médicament) but also within the community at large. Quality data dissemination is seen as a centerpiece of that strategy. The policy suggests the following measures as part of a pilot project.
- The physician would indicate the medical reason for the drug on the prescription (diagnosis or symptom). This information would be transferred to the Régie by the pharmacy to be stored in databases for research purposes, such as improving the quality of drug utilization reviews, or dissemination to other healthcare professionals with the intention of optimizing therapeutic intervention. (Brogan Inc.: There is no discussion about the practical application of this policy such as payment to pharmacists or physicians for entering or monitoring these entries.)
- A physician feedback system would be created to allow doctors to compare their prescription profile to the guidelines or with other physicians.
- Patients would be able to have their medication profile reviewed by a pharmacist who would make recommendations to the physician. This program would be targeted at vulnerable patients.
6) SUPERVISE COMMERCIAL PRACTICES
Analysis contained in the paper suggests that commercial practices in pharmaceutical marketing can influence physicians to prescribe more expensive drugs in situations where the therapeutic benefit has not been proven. Certain types of gifts and considerations to healthcare professionals create a conflict of interest that may divert from optimal prescribing. These situations can also be found with generic manufacturers at the pharmacy level, where free goods are not reflected in the price charged to the drug plan.
- Modify the listing policy to ensure that manufacturers respect existing advertising and physician detailing policies. The proposals contemplate closer scrutiny of sales activities and a method of punishing companies violating the rules; (Brogan Inc. comment: It is unclear how this differs materially from PAAB.)
- It is proposed that the guaranteed selling price (formulary price) should exclude all gifts, rebates or other considerations provided to healthcare professionals or pharmacies;
- Supervise or prohibit the distribution of samples. (Brogan Inc. comment: The province has until now steadfastly resisted attempts by manufacturers to introduce electronic sampling systems.);
- Create an agency to supervise the commercial practices of generic manufacturers with the agency funded by these companies;
- Modify the regulations to oblige pharmacists to charge the Régie only their acquisition price, net of all financial and other considerations (e.g. free goods).
7) GOVERNMENT-INDUSTRY PARTNERSHIPS
The new policy envisages government-manufacturer partnerships in specific classes of drugs with the objective of setting up measures to ensure optimal utilization within these classes. All concerned manufacturers in the class would be included in the partnership.
SECONDARY POINTS
1) FORMULARY UPDATES
According to this document, the current formulary updates require a ministerial directive, making formulary acceptance (or refusal), and simple updates, a long and difficult process. It is proposed to have more frequent formulary updates and reduce the administrative burden and delay.
The submission review process would become more transparent by making the evaluation process public (à la CDR).
Brogan Inc. comment:
There is no reference to Québec joining the Common Drug Review.
2) REDUCE ADMINISTRATIVE BURDEN OF EXCEPTION DRUG
It is proposed to lighten the administrative burden related to exception drugs, such as validating the therapeutic intention with a code (à la ODB) and automatic authorization for certain physicians.
3) RETAIN THE 15-YEAR RULE
The Québec-based innovative pharmaceutical industry provides nearly 8,000 jobs, generally high quality and high value-added. Québec represents 42% of Canadian pharmaceutical research and development expenditures. The 15-year rule states that the brand is reimbursed at full price for 15 years following listing by either the Régime or a healthcare facility. This constitutes one part of an industrial development strategy and it would be retained.
4) FIX A UNIQUE WHOLESALE UP-CHARGE
The wholesale up-charge currently varies between 5% and 7.15% depending on the wholesaler.
(The average up-charge is 6.1%.) This has created distortions in the market. It is proposed to fix the up-charge at 6% for all wholesalers, and cap it at $24 for products costing more than $400.
5) NO REFERENCE PRICING
It is explicitly proposed not to put in place a reference drug pricing policy.
Click here for the complete online version of this report
Richard Lavoie
Économiste principal / Senior Economist
Brogan Inc.
Copyright: Brogan Inc. 2004
|
