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)

Will a pan-Canadian approach to drug purchasing save the provinces money? (pdf 1MB)

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