Canadian pharmaceutical companies often enter into Product Listing Agreements (PLAs), especially with public payers, to facilitate reimbursement of medicines. It is common for PLA to take the form of an initial dollar rebate, with incremental rebates if the annual amount refunded by the payer exceeds a certain threshold. However, this approach of setting prices or limiting spending based on expected volumes and estimated cost-effectiveness addresses challenges that may be associated with new and innovative therapies, especially pharmaceuticals. Is not …
- Limited or uncertain clinical and cost-effectiveness data (e.g., if there are rare disease drugs, NOC/c (conditional NOC) drugs, or novel or targeted biomarkers).
- High up-front costs (eg, drug cures for high-prevalence diseases, including gene therapy, have only an initial impact on budgets).
- Request access to health system resources outside the responsibilities of the state’s drug benefit plan.
- Anything that calls into question budget certainty (e.g., the first drug to treat a condition is often associated with budget uncertainty. Conversely, many treatments for a condition Even if available, new products may become the new standard of care and replace other treatments.)
- If innovative diagnostic techniques are needed to determine whether a patient is a candidate for treatment (e.g., drugs that rely on radiopharmaceutical diagnostics should increase the availability of PET scans, but physicians face challenges regarding fee schedules, procurement of hospital and ambulatory diagnostic images, and access to clinicians required to treat and interpret these diagnoses); and
- When combination or add-on therapy can extend the life of the core therapy component, including when non-prescription drugs (e.g., over-the-counter drugs, devices, or diagnostics) are involved and marketed by another manufacturer.
Obstacles in reaching reimbursement-related agreements delay patient access to innovative medicines and unnecessarily constrain how patients are treated. To address this proactively, while at the same time adding value and providing financial sustainability to payers, Innovative Medicines Canada (IMC) published Innovative Pact Framework On November 17, 2022, we describe various innovative redemption models that are already being piloted or implemented around the world. This report has been prepared to promote new approaches to redemption in negotiations between the two countries. Pan-Canadian Pharmaceutical Alliance (pCPA) and formulary-listed pharmaceutical manufacturers by public payers.
Highlighted below are five types of innovative contracts, showing some of their benefits, uses, and considerations.
performance-based contracts
In this model, reimbursement is based on drug performance. The drug is reimbursed by the payer if the agreed benefit is achieved or maintained over a specified period of time. Otherwise, no refund will be given or only a partial refund will be given.
This type of contract allows manufacturers (by listing products with clinical and economic uncertainty that would otherwise not be reimbursed) and payers (risk We guarantee that you get “value” from both (through protection). Based on response to treatment. These agreements may provide more assurance that only the patients most likely to benefit from the product are the intended market.
There are different models for performance-based contracts. For example, performance can be measured at the patient level (e.g., the payer receives up to 100% rebate if the patient discontinues the drug by the time the drug yields a clinical outcome), at the population level (e.g., rebate percentage). data instead of volume), or based on economics or performance (eg, percentage of rebates associated with an increase in patients switching from more expensive and clinically equivalent alternatives).
Results routinely collected in clinical care are used to determine response to treatment (eg, objective imaging responses in oncology). This is due to the need for timely access to existing data (such as real-world evidence data) and continuous monitoring and measurement to assess whether clinical thresholds have been met. It means changes to your data infrastructure and significant administrative labor and financial costs.
amortization contract
This model assumes a lump sum payment (annuity payment) at a specific time for the drug. Benefits include budgetary “shock absorption” (e.g., the availability of new therapies so attractive that they need to be funded immediately, such as when hepatitis C drugs were developed). possible, but it is impractical to fund the demand within the annual budget cycle). launch); and budgetary “warranty protection” (e.g., spread of payments over the period of the manufacturer’s expected “healing” time due to uncertainty about whether a treatment is actually curative). If the model arises and the condition recurs within the warranty period, the payer will stop paying). This model is particularly useful for therapeutic drugs and gene therapies, as well as when patient demand is expected to be particularly high at launch.
Some of the particularly interesting factors to consider in this model are how to treat patients who move from one jurisdiction to another, or from public payment systems to private payment systems (or vice versa), and how to deal with supply interruptions during the amortization period.
subscription agreement
This model envisions unlimited access to a specific product for a specific period of time for a fixed fee, allowing for certainty of payment and broader access to products that are relatively easy to implement. This model ensures budget certainty and can be used to address a variety of situations, including rapid increases in product demand, large patient populations combined with budget constraints, and combination and add-on therapies. Extend the life of backbone treatments while ensuring payers are not surprised by budget increases).
While subscription models are often easier to set up and manage than other types of risk-sharing agreements, both the treatment population and treatment environment can change dramatically over time, potentially leading to re-treatment. Therefore, it is important to have a well-defined patient population. negotiation.
package deal
This type of contract includes not only pharmaceuticals, but also data infrastructure, testing and patient support. This “holistic” model includes partnerships (e.g., laboratories, clinicians, medical device companies, imaging companies, technology companies, etc.), patient support programs, and capital investments (e.g., independent, inpatient stays). out-of-hospital surgical facilities to manage) and new contract provisions.
Portfolio contract
In this type of contract, the manufacturer has a set price for a “portfolio” of products. Portfolios can be customized to meet the needs of individual jurisdictions. For example, it can include various products from one manufacturer (through one or more divisions), from the same or different classes of medicines, and all brand-name, generic, biosimilar, and/or diagnostic products. are bundled into his one contract.
Portfolio agreements should address whether different provinces’ drug budgets are affected (e.g., Ontario’s drug benefit programs and cancer treatment Ontario, especially if each program has a different eligible population), new product challenges (e.g., review and the unclear impact on the portfolio due to the emergence of new products), loss of patent protection (e.g., which may lead to lower reimbursement prices), and possible product divestitures by manufacturers. This model is more efficient because it eliminates the need for multiple separate negotiations.
of the IMC Innovative Pact Framework The report is not intended to be comprehensive, but rather a thoughtful report on potential models for stakeholders to consider. This report highlights both the opportunities and challenges facing payers and the industry, and encourages pCPA and industry to jointly develop innovative contract frameworks to expand the potential toolbox of reimbursement negotiations. trying to start a discussion between There are potential risks for manufacturers and payers if analytics and forecasts don’t play out as expected, but pursuing innovative contracts and thinking of healthcare costs in a different and more holistic way can have significant benefits. I have. Of course, continuation is risky. current situationparticularly as a delay and barrier to patient and clinician access to innovative therapies.
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