Co-authored by Bill Dempster (CEO, 3Sixty Public Affairs) and Johanne Chambers (Associate, 3Sixty Public Affairs)
Provincial and territorial premiers first announced the
Pan-Canadian Pricing Alliance (PCPA), an initiative aimed at
facilitating multi-jurisdictional negotiations on prices of brand
name drugs, back in the summer of 2010. Three years have now gone
by, and although the Premiers recently confirmed that PCPA is one
of their joint key priorities, we still know very little about the
initiative. This is largely due to the fact that the PCPA process,
until now, has remained largely undefined. This, however, will
likely change, as the provinces and territories are now working
with a consultant, IBM Healthcare Solutions (IBM), to recommend
options for the development of a permanent model that will
facilitate negotiations under the PCPA.
Since its inception, the drug plan managers in the provinces and
territories have established an informal process to determine the
applicability of PCPA to every drug coming out of the national drug
review processes (i.e., the Common Drug Review (CDR) and the
pan-Canadian Oncology Drug Review (pCODR)). However, the PCPA has
given rise to a significant degree of business uncertainly. For
example, manufacturers may not know which provinces/territories are
participating in the negotiations at a given point in time. This
makes it difficult for manufacturers to accurately determine the
size of their market and the volume of sales it could generate, so
as to be able to decide on an acceptable price point. The process
may be even more complicated for companies who must involve their
global counterparts when engaging in these negotiations, presenting
an additional layer for approval.
In February 2013, the Government of Ontario issued a request for
proposal to retain the services of a consultant to "recommend
options for the development of a permanent model(s) that will
facilitate negotiations for brand products and approaches to
achieving better value for money for generic drugs." IBM was
hired to undertake this project, and is conducting consultations in
the fall of 2013 with provincial governments, the Canadian Agency
for Drugs and Technologies in Health (CADTH), pCODR, selected
manufacturers, industry associations and patient organizations. IBM
is expected to report back to the provinces and territories with
its recommendations before the end of December 2013.
Link to article as published in Inside Policy, the Magazine of
the MacDonald-Laurier Institute (November 2013)
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