canada drug iressa supplier

Teresa Negrich
Director, Group Product Development
The healthcare landscape is changing ….. rapidly
Drug plans
Hospitals and
Private clinics
Eligible
prescribers
Health and
Wellness
Today’s Topics
Overview of Canadian Healthcare System
Coverage of Cancer Drugs
Provincial Pricing
Provincial Drug Tendering
Sustainability Principle
Generic drug pricing
Other trends
Overview of the Healthcare
System In Canada
Canada Health Insurance System
Federal legislation
Comprised of 13 interlocking provincial and territorial health
insurance plans
Designed to ensure
- Reasonable access to “medically necessary” hospital and physician services
- On a prepaid basis and
- Without direct charges at the point of service
“to protect, promote and restore the physical and mental
well-being of residents of Canada and to facilitate reasonable
access to health services without financial or other barriers.”
Canada Health Act
Defines the requirements that the provinces must fulfill in order to
receive their full transfer payment under the Canada Health Act
- Public administration
- Comprehensiveness
- Universality
- Accessibility
- Portability
- No extra billing and user charges for insured services
- Reporting requirements to Minister of Health
Canada Health Act – Key Definitions
Insured health services
- Medically necessary hospital, physician and surgical-dental services
Insured hospital services
- Medically necessary in and outpatient services such as
•
•
•
•
Accommodation and meals at ward level
Nursing services; laboratory, radio-logical and other diagnostic procedures
Drugs, biologicals and related preparations when administered in the hospital
Use of operating rooms, anesthetic facilities including equipment and supplies
Insured physician services
- Medically required services rendered by medical practitioners
- These are generally determined by physicians in conjunction with their
provincial health insurance plan
“Medically necessary” is not defined in the Canada Health Act
Canada Health Act
Many provinces offer programs and services which fall outside of the
Canada Health Act’s definition of insured health services
i.e. Pharmacare, disease focused programs
Provincial governments have jurisdiction over administration and
delivery of health care services in their provinces
- Can determine their own priorities
- Determine their health care budget
- Manage their own resources
The federal government sets out criteria that the provinces must
satisfy in order to receive a full transfer payment for healthcare
Cancer Drugs
“Tell me your postal code, and I will tell
you your chances of surviving cancer,”
says Dr. William Hryniuk, past chair of the Cancer Advocacy Coalition of Canada.
Coverage of Cancer Drugs – Ontario 2006
Ontario working group - proposed that Ontario hospitals could administer some
new IV oncology drugs on an outpatient basis
- However, the drug will NOT be an insured service
- Hospitals may charge an administrative fee for administering the drug
Why?
- To stop people from traveling to the U.S. to purchase these drugs at a much higher price
Not provincial policy yet
Does this violate the Canada Health Act? Is this service medically necessary?
Legal opinion obtained the working group supported this recommendation
- It appears as though a province can carve out (not insure) any service they want on an outpatient
basis
Public policy decision that the Federal Government must address, but hasn’t
How do the provinces compare?
Source CACC report Card 2007
Source CACC report Card 2007
Private Clinics – The New Healthcare Reality
18 private clinics in Canada make these drugs available
to individuals
- 11 clinics recently opened across Canada
- They are funded by Roche Pharmaceuticals
- They administer more than just oncology or Roche drugs
Who will pay for these drugs?
Private healthcare plans
If no private coverage
-
Exhaust individual savings
Cash out RRSPs
Second mortgage your home
Credit cards
This is a great opportunity for group Critical Illness
Pharmaceutical Focus
Drug Name
Estimted Annual Cost
Leukemia + Non-Hodgkin’s Lymphoma
Fludara
$8,000
Rituxan
$41,000
Mabcampath
$28,000
Gleevec
$60,000
Breast Cancer
Herceptin
$45,000
Taxotere
$30,000 to $40,000
Lung Cancer
Iressa
$16,000
Tarceva
$15,000
Taxotere
$30,000 to $40,000
Alimta
$60,000
Colorectal Cancer
Avastin
$52,000
Erbitux
$130,000
Camptosar
$100,000 to $150,000
Ovarian + Prostate Cancer
Taxotere
$30,000 to $40,000
Head + Neck Cancer
Taxotere
$30,000 to $40,000
Erbitux
$130,000
Multiple Myeloma
Velcade
$57,000
Kidney Cancer
Nexavar
$33,000
Thyroid Cancer
Thyrogen
$1,500
Source: Drug Manufacturer
Bayer Inc.
Hoffmann-LaRoche Limited
Genzyme Corporation
Novartis Pharmaceuticals Canada Inc.
Hoffmann-LaRoche Limited
Sanofi-Aventis Canada Inc.
Astrazeneca Canada Inc.
Hoffmann-LaRoche Limited
Sanofi-Aventis Canada Inc.
Eli Lilly Canada Inc.
Hoffmann-LaRoche Limited
Bristol-Myers Squibb Company
Pfizer Canada Inc.
Sanofi-Aventis Canada Inc.
Sanofi-Aventis Canada Inc.
Bristol-Myers Squibb Company
Janssen-Ortho Inc.
Bayer Inc.
Genzyme Canada Inc.
Pharmaceutical Focus
The focus is on cancer drugs and drugs to treat rare conditions
• It is estimated that there are 483 drugs in the pipeline
- 25% are for cancer
- 18% are for specialty conditions
Private clinics will ensure that the drugs get covered by private
payers
Movement to oral medications rather than intravenous ensures that
the treatment does not have to be administered in a hospital and will
be covered under private plans
The Rise of Catastrophic Claims – Drug Card Only
Total # of People
Covered
Year
$10,000 to
$14,999
$15,000 to
$24,999
Over $25,000
% of Total Covered Who Have Incurred A Claim
2000
4.0M
(1,1413) .03%
(1,029) .03%
(153) .01%
2001
4.4M
.05%
.03%
.01%
2002
4.7M
.05%
.05%
.01%
2003
4.9M
.07%
.05%
.02%
2004
5.1M
.08%
.07%
.03%
2005
6.0M
.08%
.08%
.03%
2006
6.0M
(5,551) .09%
(5,611) .09%
(1,906) .03%
Source: Emergis 2007 Data
Provincial Pricing
Provincial Pricing – Ontario Bill 102
Bill 102 limited the amount that the ON government will pay for drugs
for ODB plan recipients
Pricing applies to the public plan only
Changes
Pharmacy markup - reduced from 10% to 8% on all drugs (brand and
generic).
Generic drugs - capped at 50% of the equivalent brand
Rebates have been reduced and replaced by professional allowances
This has impacted pharmacy revenue
Components of a Rx
Ingredient
Cost
Rx =
Markup
+
Dispensing
Fee
Bill 102
reduced from
10% to 8%
Components of Pharmacy Revenue
Prescription
Drug
Sales
Other
Merchandise
Sales
Pharmacy
markup
reduced
Generic
Rebates
Other
Generic
rebates
reduced
Impact of Ontario Bill 102
The principle of rebating was exposed
Dispense fees in Ontario increased by 20% immediately
Extra billing is occurring in some pharmacies on the drug card
Cash paying customers are funding a portion of the lost pharmacy revenue
Bill 102 created three tiered pricing
-
One price for ODB recipients
-
Another price for drug cards
-
A third price for cash paying customers
Provincial Pricing
Quebec
- First province to follow Ontario’s lead
- Maximum price structure to be implemented over 3 years
• Generic drug prices capped
• Maximum profit margin capped for the wholesaler
- This pricing structure applies to private plans
Newfoundland
Will follow Ontario’s pricing structure - effective Feb. 1, 2009
- Pushed back new pricing structure due in February 2008
due to negative pharmacy reaction
-
Nova Scotia
•
Tariffs introduced on “Top 20” drugs
Provincial Drug Tendering
Provincial Drug Tendering
Province of BC negotiated a drug deal for Zyprexa
- Speculated that 10-15 more deals are in the works
Province of Alberta
- AB has announced that they will be establishing a bulk buy policy
Province of Ontario
- Tendering certain off-patent drugs where
multiple generics exist
- First Wave: high blood pressure, gastrointestinal,
diabetes, epilepsy and pain disorders
Impact of Provincial Tendering
Provinces are legislating on behalf of the public sector and ignoring the
private sector
A two-tiered pricing system exists
- One price for pharmaceuticals purchased by the government
- A second higher price for the private sector and uninsured
Sustainability Principle
Provinces Add Sustainability Principle
British Columbia
Province of BC added a sixth principle to Medicare Protection
Act (April 2008)
- SUSTAINABILITY – The Medical Services Plan will be administered in a
manner that is fiscally sustainable and provides for current healthcare
needs without compromising the public health care system for future
generations.
Alberta
Announced an aggressive action plan to improve efficiencies
and the sustainability of their healthcare plan
Generic Drug Pricing
Generic Drug Pricing – is there cause for concern?
Reasons For Competition Bureau Investigation
- Concern over the high cost of generic drug prices in Canada
• Cost out of sync with other 10 out of 11 comparator countries
• Cost 32% higher than other countries
Findings
- Rebates are between 40 – 80%
- Lots of competition between manufacturers and suppliers BUT rebates are
NOT passed along to the private sector
- This has created on over-inflated price
Mental Health
“there can be no health without mental health”
Centre for Mental Health in the Workplace
Cubic Health Study Found
Employees with depression
- Drug claims were 2.5 times greater than employees who do not suffer from
depression
Many co-morbidity conditions accompany depression
- Neurotic pain, anxiety disorders, sleep disorders, stomach hyperacidity and mild
to moderate pain.
*Cubic Health study was based on 2004 and 2005 Great-West Life data
The impact of depression in the workplace
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
Amount Paid ($) Per Claimant
All Claimants
Claimants with Depression
*Cubic Health Study: based on 2005 data from Great-West Life
Claimants without Depression
Co-morbidities of depression
70%
60%
1 - Neurological Pain
2
3
4
5
6
50%
40%
30%
-
Anxiety Disorder
Sleep Disorder
Mild-Moderate Pain
Stomach Hyperacidity
Inflamation, Muscle / Bone
7 - Asthma / COPD
8 - Infection, General Bacteria
9 - Blood Pressure
10 - Elevated Cholesterol
20%
10%
0%
Percent of Amount Paid for Claimants with Depresson
*Cubic Health Study: based on 2005 data from Great-West Life
Other Provincial Trends
Privatization
Governments are entertaining the value that the private industry brings to
their budget concerns
Private medical clinics and online doctor services are quickly gaining
momentum in many provinces
Quebec just introduced a bill that, if passed, could allow doctors to practice
in both the public and private sector
Former Quebec Minister of Health, Philippe Couillard, has joined a private
sector company only two months after retiring from politics
•
He is now a partner of PCP Healthcare Opportunities Fund which invests in private
healthcare businesses with the overall goal to improve healthcare system efficiencies
U.S. company launches a NAFTA-based lawsuit threatening Medicare
Alternative Healthcare Professionals
Pharmacists and nurse practitioners are being granted the right to
prescribe and/or provide expanded services in many provinces
This is a positive change which will take some strain off physicians and
increase compliance and health outcomes
Provinces Focus On Wellness
• Manitoba - Workplace In Motion – grants available to promote activity in
workplaces
• Alberta - looking at disease management
• Ontario – The 2008 proposed $190M (over 3 years) to implement a chronic disease
prevention and management strategy. Diabetes will be focused on first.
Provinces Ban on Mandatory Retirement
• ON, BC, SK, NS and NF have put in place laws for provincially regulated employers
- can no longer force employees to retire solely because they have reached age 65 or more.
Provinces set to Create Electronic Medical Record
• Each province is looking to capture medical information electronically so that all
healthcare providers have up to date relevant information
Other Trends
Medical Tourism - Sun, Sand and Surgery
Sicko (Michael Moore) depicts the Cuban health care system
superior to the U.S.
Entrepreneurial companies are providing a service of arranging trips
to other countries for medical treatment and diagnostic tests
It is estimated that as many as 30,000 Canadians travel each year
for medical and dental procedures
HPV Vaccination
Gardasil protects against high risk HPV types 6, 11, 16 and 18
Recommended for women ages 9 to 26
The Federal Government has provided $300M in funding to the provinces
Some provinces began vaccinations in the 2007 school year
Approximate cost $400 - $600 total (for 3 doses)
Impact on Private Plans
As of July 2007, 37% of all vaccinations at GWL were for Gardasil*
-
At July 2008, 22% were for Gardasil vaccinations (* GWL 2007 drug data)
A new HPV vaccination made by Glaxco Smith Klein is due to come
into the market soon. This will increase media attention.
Gardasil is being fast tracked for women age 27 to 42 in the U.S.
-
Only a matter of time before it is expanded in Canada
Paramedical Trends
The number of plan members using paramedical services is
increasing and the number of services that they claim is also on the
rise
“Blackberry thumb” is predicted to be the new upcoming problem
Despite increasing utilization, paramedical services should form part
of every benefits plan
- Focus on health and wellness
- Can improve physical and mental health
- May prevent more serious long term illness
Paramedical Claims – % of healthcare
1999
2000
2001
2002
2003
2004
2005
2006
Massage
2.05
2.38
2.77
3.15
3.53
3.82
3.99
4.04
Physio
3.79
3.72
3.71
3.72
3.66
3.52
3.39
3.30
Chiro
2.86
2.66
2.61
2.53
2.61
2.69
3.58
3.68
Psych
1.62
1.57
1.54
1.47
1.43
1.36
1.26
1.24
Other
1.37
1.37
1.46
1.58
1.78
1.95
2.02
2.09
Total
11.69
11.70
12.09
12.44
13.00
13.34
14.25
14.36
Source: GWL data
Thank you