HESA Committee Report
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A. An Advisory Body to Public Drug Plans
The CDR provides advice to participating drug insurance plans about the clinical efficacy and cost-effectiveness of a drug against other drug therapies so that public funds are optimally used. This drug review process is distinct from Health Canada’s drug approval and licensing process. Health Canada is responsible for ensuring that marketed drugs in Canada meet established standards for efficacy, safety and the quality of manufacturing. Its decisions are made on the basis of information from clinical trials as provided by the manufacturer. These clinical trials compare the impact of a drug on health and safety relative to a placebo.
Health Canada does not compare the new drug to other available therapies, and cost is not a consideration under its drug approval process. Rather, this is the role of the CDR which helps determine whether or not the therapeutic improvement offered by the new drug compared to an alternative drug therapy justifies its cost or represents value for money when considered within the broader context of the health care system. For this reason, the approval for the marketing of a drug by Health Canada does not automatically lead to a CDR recommendation to list the drug.
The vision and mandate for the CDR came from the F/P/T Ministers of Health in September 2001. At the time, four goals were envisioned for the CDR:
· To establish a consistent and rigorous approach to drug reviews;
· To reduce duplication across publicly funded drug plans;
· To maximize the use of limited resources and expertise; and
· To provide equal access to expert advice.
The CDR was established in March 2002 and began accepting drug submissions in September 2003. From its creation up to April 2007, the CDR accepted submissions and performed reviews only for new drugs. Its mandate was recently expanded to review submissions for new indications for old drugs and this will commence later in 2007. There are plans under the National Pharmaceuticals Strategy to eventually expand the CDR to all drugs.
The CDR is the responsibility of the Canadian Agency for Drugs and Technologies in Health (CADTH), which is an independent, not-for-profit corporation with an annual operating budget of $24.2 million. It is funded by federal, provincial and territorial governments (except Quebec) and is governed by a 13-member jurisdictional Board of Directors appointed by the F/P/T Deputy Ministers of Health.
Federal funding for CADTH is provided through a Named Grant and is distributed among the Agency’s three core business activities — Common Drug Review (CDR), Health Technology Assessment (HTA), and Canadian Optimal Prescribing and Utilization Service (COMPUS). According to Health Canada’s Report on Plans and Priorities for 2006-2007, CADTH will carry out and submit to the federal Minister of Health, no later than June 30, 2007, an independent evaluation of its core business activities from 2003 to 2007. This evaluation will not include the CDR as it was previously evaluated in 2005 by EKOS Research Associates.
As indicated previously, the funding formula for the CDR is 70% provincial/territorial and 30% federal contribution. The initial total CDR budget of $2 million per year was augmented to $3.4 million for the last two years, as the number of new drugs submitted for review increased. As of April 1, 2007, with the expansion of the CDR to cover new indications for old drugs, the total budget increased to $5.1 million. For 2007-2008, this corresponds to federal funding for CDR of about $1.5 million.
2. What Process Does the CDR Use in Reviewing New Drugs?
The CDR process is usually initiated when a drug manufacturer files a submission for a new drug to the CDR Directorate. (See Appendix A for a schematic representation of the CDR process.) Participating drug plans can also make a submission. A review team — involving both external and internal reviewers — is established within the Directorate. While the names of the review team members are not disclosed, the make-up of the team is acknowledged in all CDR documents. The team usually includes epidemiologists, pharmacists, physicians, health economists and information specialists. At least one physician with expertise in the relevant clinical area is included in all reviews.
The review team undertakes a systematic review of the clinical evidence and the pharmacoeconomic data provided in the manufacturer’s drug submission or retrieved through an independent literature search. The information in the manufacturer’s submission may be confidential, and, for this reason, may have proprietary protection. The results of the review are sent to the manufacturer for comment after which CDR reviewers prepare a reply.
B. CEDAC Review and Recommendation
The dossier of the drug submission and its assessment by the review team is then forwarded to the Canadian Expert Drug Advisory Committee (CEDAC), which is housed within CADTH. CEDAC is an independent advisory body composed of 13 individuals with expertise in drug therapy and drug evaluation, including two members of the general public. The names and biographies of CEDAC members are publicly available on the CADTH website. CEDAC undertakes deliberations and makes a formulary listing recommendation to the participating drug plans.
In its deliberations, CEDAC considers the following three review criteria for each new drug: 1) clinical studies, which assess safety and/or efficacy of the drug in appropriate populations and, when available, effectiveness data are compared with current accepted drug therapy; 2) therapeutic advantages and disadvantages relative to current accepted drug therapy; 3) cost-effectiveness relative to current accepted drug therapy.
CEDAC may recommend that: 1) a drug be listed; 2) a drug be listed with criteria and conditions; or, 3) a drug not be listed. A recommendation may also be deferred pending clarification of information. The final recommendation and reasons for the recommendation are sent to the manufacturer and participating drug plans and are also released publicly. While CDR provides formulary recommendations, the final decisions rest with the provincial, territorial and federal governments, taking into consideration their jurisdictional needs, priorities and resources.
CADTH officials told the Committee that, as of April 2007, after almost four years of operation, the CDR had received 95 drug submissions; 70 final recommendations were issued; positive formulary listing was recommended for approximately 50% of all the drugs reviewed; and, drug plans’ decisions have followed CDR recommendations 90% of the time.
C. CDR Conflict of Interest and Confidentiality Guidelines
It is important to note that all CDR reviewers and CEDAC members must abide by strict conflict of interest guidelines and a code of conduct. The conflict of interest assessment includes a focus on real, potential and perceived conflicts. It requires disclosure of personal, occupational and financial connections, or interests with pharmaceutical companies or affected organizations.
Perhaps more importantly, CADTH has developed confidentiality guidelines to protect confidential information obtained for the CDR. A manufacturer will be deemed to have consented to the guidelines when he/she files a submission or supplies other information to the CDR Directorate. However, if any reasons for a CDR recommendation are based on unpublished confidential information and/or confidential price, the manufacturer will be asked for permission for disclosure in the final recommendation and accompanying reasons. The information will be kept confidential at the manufacturer’s request, thereby restricting the ability of the CDR to report to the public on the price or clinical evidence used for the CEDAC recommendations.
3. How is Cost-Effectiveness Determined?
The clinical review and pharmacoeconomic assessment undertaken by the CDR is extensive. Before the cost-effectiveness of a drug is considered, the drug must first be shown to be clinically effective and demonstrate improved healthcare outcomes. Experts explained that the central concept around cost-effectiveness is value for money and is not simply price or budgetary cost. The internationally accepted gold standard for expressing cost-effectiveness of a new drug is by the cost per Quality Adjusted Life Year (QALY), compared to other drug therapies. The cost per QALY estimates the cost of a new drug relative to improvements in survival and quality of life. An expensive drug can still be cost-effective if it demonstrates an improved health outcome over its comparator. A relatively inexpensive drug may not be cost-effective if it offers little or no improvement in health outcomes compared to a less costly treatment.
B. Expanded to Incorporate Other Outcomes
The pharmaceutical industry claimed that the CDR process places too much emphasis on cost and not enough on patient outcomes. In the view of the industry, this leads the CDR to recommend that innovative drugs not be listed. Industry representatives explicitly recommended that the CDR incorporate mechanisms that recognize the value of pharmaceutical innovation into its mandate.
Health professionals and patient advocacy groups told the Committee that the clinical and pharmacoeconomic assessment should compare not only a drug’s performance to other drugs in the same class, but also to other available non-drug therapies. They suggested that the review consider a drug’s impact on overall health care utilization. For example, if a drug reduces a patient’s hospital stay, helps an otherwise disabled patient to return to work, or replaces costlier or invasive procedures, this should be considered in evaluating its overall cost-effectiveness.
CADTH officials clarified, however, that their cost-effectiveness does look at the other costs to the health care system such as doctors’ visits and hospitalization. They also pointed out that the CDR has, in fact, recommended expensive drugs that demonstrate improved health outcomes and that, in their view, it is clear that drug cost alone does not drive CDR recommendations.
Other witnesses emphasized the challenges of reviewing new drugs that do not have clear evidence of long term health outcomes. Health Canada can approve a new drug on the basis of surrogate end points (surrogate markers) of effectiveness and require a future commitment by the manufacturer to collect ongoing data. In such cases, initial assessment of a new drug may indicate an early and positive change in one aspect of a disease or one system of the body. The longer term effectiveness with respect to improved morbidity and decreased mortality are not known.
C. Incorporating Human Values into the Review Process
The determination of the cost per QALY generated considerable interest. Several witnesses noted that there are problems with applying economic analysis to complex issues around quality of life such as putting a value on the ability to dress or feed oneself. Furthermore, although QALY has a widely validated scientific methodology, they stated that it has no explicit connection to ethical analysis. Many agreed that the CDR process could be moved from one that has been technical, scientific and clinical to one that incorporates an analysis of competing human values within an ethical framework. However, it was also acknowledged that these human values and ethical considerations must be balanced with resource allocation challenges, pressures from the pharmaceutical industry to promote innovative medicines and the interests of patients.
The Committee acknowledges that pharmacoeconomic assessment is a valid method when weighed against clinical effectiveness of the drug. Governments have a legitimate role in ensuring that public resources are appropriately used. For drugs that are publicly reimbursed, this includes verifying that they offer good therapeutic and monetary value relative to their benefits over existing therapies. This is a dilemma that is frequently faced by public policy makers when they must decide how best to spend taxpayer money.
On the one hand, if two drugs in the same class achieve similar therapeutic outcomes, it is not unreasonable to expect that the less expensive drug should be preferentially covered and/or prescribed. On the other hand, the Committee agrees with witnesses in that some flexibility is also needed. Consideration should be given to allowing patients to access off-formulary drugs if, in the opinion of the attending physician, the recommended product is not the right choice for them. Moreover, pharmacoeconomic assessment must continue to take into account the potential savings to the publicly funded health care system resulting from, for example, reduced hospitalization or fewer surgical interventions. Finally, the Committee sees an opportunity for including values through increased public involvement in the review process, as mentioned under the section on public participation in CEDAC.
4. Has the CDR Reduced Duplication?
A. Single F/P/T Review of New Drugs
Before the creation of the CDR, the federal government and the provinces/territories had separate processes for reviewing and recommending new drugs to their respective drug plans. Pharmaceutical companies had to file a submission for review of each new drug to each individual drug plan. In setting up a single review process, the CDR was expected to benefit drug manufacturers since they would only be required to make a single submission to the CDR rather than to each individual drug insurance plan. In principle, therefore, the pharmaceutical industry should have been positively impacted by this new approach.
Pharmaceutical industry representatives and individuals representing patient advocacy groups, however, told the Committee that the CDR is an additional layer of bureaucracy which is redundant. They claimed that participating drug plans are still conducting their own reviews of new drugs.
In contrast, officials from federal and provincial drug insurance plans told the Committee that this criticism is unfounded. They confirmed that the 18 separate drug plan processes for reviewing overall cost-effectiveness and making formulary listing recommendations on new drugs have been replaced by the single CDR process. In their view, the CDR process saves time, effort and money. It has reduced duplication of effort across the provincial, territorial and federal drug plans and has allowed all jurisdictions — large and small — to have equal access to a high level of evidence and expert advice from the CDR. They also told the Committee that the CDR has rapidly become a respected peer among review processes on the global stage.
B. Different Drug Insurance Plan Reviews
Federal and provincial officials further explained that their respective drug reviews for clinical and cost-effectiveness have remained in place only for those drugs that do not fall under CDR’s mandate of new drugs. They also stated that they do continue to assess drugs for formulary listing based on the appropriateness for their different client populations and with a view to the distinct budget needs of each plan. Health Canada estimated, with respect to the First Nations and Inuit drug plan, that it spent approximately 50% less on its drug review activities per year since the creation of the CDR.
The Committee heard clearly that the CDR is meeting the needs of participating federal, provincial and territorial drug plans and that, in most cases, CDR has provided a higher quality review than the individual plans could have achieved with their own resources. According to the participating plans, the CDR has reduced their human and financial resource requirements for data collection and scientific assessments. In addition to responding to the limited capacity in smaller drug plans, the CDR has achieved its goal of reducing duplication of drug review processes for new drugs.
5. Has the CDR Resulted in Longer Waits for New Drugs?
During the hearings, the pharmaceutical industry and many patient advocacy groups claimed that reimbursement of new drugs through public plans has been delayed under the CDR. The Committee was told that this issue relates to the “time-to-listing” which involves three steps: 1) the time it takes the manufacturer to file a submission after a Notice of Compliance has been issued by Health Canada; 2) the time it takes for the CDR to review the drug submission; and 3) the time it takes a participating drug plan to make and announce its listing decision.
According to CADTH data, the average total time from Health Canada approval to drug plan listing decision is essentially unchanged since the CDR was established — 471 days before versus 479 days now. The CDR process represents only about one-third of this total time period. Once the CDR has released a recommendation, it is the drug plans that make the decisions whether to list the drug on their formularies. The timeframe for this remains solely the responsibility of each drug plan and CDR has no role.
Officials from CADTH explained that they are responsible only for the second step of the overall time-to-listing and have no control over the first step initiated by the manufacturer or the last step of final decision-making by the plans. They stressed that, although the CDR process is highly detailed and involves many different stakeholders, the time from review initiation to recommendation is only 19 to 25 weeks. (For an overview of the CDR timelines, please see Appendix B.) They explained that the CDR has developed timelines on the basis of the best practices of the participating drug plans and that it has consistently met these timelines. They summarized the key stages and timing of the CDR process as follows:
· Clinical and pharmacoeconomic reviews are prepared within nine weeks;
· Reviews are provided to the manufacturer for written comments within two weeks;
· The CDR reports are finalized, based on these comments, within two weeks;
· The initial CEDAC recommendation and the reasons for the recommendation are sent to the manufacturer and the drug plans, and held in confidence for two weeks;
· During this two-week period, drug plans may request clarification of the recommendation and the manufacturer may request that CEDAC reconsider the recommendation on the drug. In this case, CEDAC reviews its recommendation at a subsequent meeting; and,
· The final recommendation and reasons for the recommendation are released publicly.
Some witnesses referred to an apparent overlap in the separate and sequential roles of Health Canada and the CDR as contributing to overall time-to-listing for new drugs. They called for greater coordination between the Health Canada approval process and the CDR review process. The Committee heard that if the CDR review process could commence in the latter stages of the Health Canada’s drug approval process (that is, before Health Canada issues a Notice of Compliance), then CDR recommendations could be made to participating drug plans more quickly once the drug is on the market. It was suggested that a more unified approach involving greater and timelier sharing of information between the two processes could eliminate some of the time lags between Health Canada and the CDR. This could eventually result in faster drug plan determination for reimbursement eligibility. As a matter of fact, a CDR representative told the Committee about a recent collaboration with Health Canada which has permitted the CDR to start its review process in the latter stages of the Health Canada approval process and to incorporate evidence from the regulatory review. Thus, for a drug that offers the potential for treatment of life-threatening or very serious conditions, the CDR review can complete its process and reach a recommendation within months of the market approval by Health Canada.
Representatives from CADTH and participating federal and provincial drug plans told the Committee that, prior to the CDR, the reviews often took longer, and the level of rigour varied considerably across the jurisdictions. It is their view that the total time to formulary listing has not increased since the inception of the CDR. This is despite establishing a standardized process that has both increased the level of rigour of the review and added many transparency elements to the process.
The Committee understands the anxiety of clients of participating federal, provincial and territorial drug plans when they are waiting for a drug to be listed on a formulary. While acknowledging that the CDR has consistently met its timelines, the Committee also encourages CDR to reduce its timeline through measures such as closer collaboration with Health Canada.
6. What is the Impact of CDR Recommendations?
Of the estimated nine to ten million Canadians who are affected by CDR recommendations, most are seniors and low income individuals eligible for provincial and territorial drug insurance plans. These individuals first must wait for a CDR recommendation and then wait again for their plan’s final listing decision. The pharmaceutical industry and patient advocacy groups contended that those Canadians who depend on a CDR participating plan have far less access to new drugs than the rest of the population who can seek coverage by a private drug plan or pay from their own pockets.
In their view, Canadians should have access to new drugs as soon as they are approved for sale by Health Canada and marketed by the manufacturer. Industry representatives also told the Committee that they find it troublesome when CDR makes a negative listing recommendation after Health Canada has already approved the drug for sale. According to them, Canadians who have private plans have more choice and better access than those who must rely on publicly funded drug plans. Other witnesses mentioned that Quebec lists more drugs on its formulary than any of the CDR participating drug plans.
B. Clinical Guidelines and Physician Practice
The Committee heard from some physicians and patient advocacy groups that the CDR review process should include experts with clinical expertise in the disease areas relevant to the new drug under review. They pointed to several examples of new drugs that had been recommended by expert committees responsible for the development of clinical practice guidelines for specific diseases that were not recommended for listing by the CDR. In their view, the CDR should not make a negative (“not to list”) recommendation when guidelines already exist that support prescribing the drug. The Committee was told, however, that currently in Canada there are marked differences in provincial clinical practice guidelines for the treatment of cancer, diabetes and other conditions. These guidelines vary greatly even though they are developed by experts analyzing similar medical databases. Patient advocacy groups suggested that the development of national clinical practice guidelines would provide uniformity across the country and provide the basis for patients to demand that their provincial governments pay for the drugs that are recommended in the guidelines.
A CDR representative emphasized that the body of evidence available to physicians and to the developers of clinical practice guidelines is not the same as the evidence reviewed by the CDR. The CDR has the advantage of having access to unpublished information that pharmaceutical companies are compelled to supply in their submission.
Furthermore, several academics noted that the development of clinical practice guidelines may be financially influenced by pharmaceutical companies. They pointed out that it is important to separate guideline development from the vested interest of the industry as well as from patient advocacy groups.
There have been criticisms that participating drug plans do not necessarily adopt CDR recommendations. However, the Committee was told that the drug plans are not obliged to do so. Witnesses indicated that decisions by public drug plans are entirely within the authority of their respective jurisdictions, and the CDR has no role in, or influence on, the nature or timing of decisions by those drug plans. According to CADTH officials, the drug plan decisions have, to date, followed CDR recommendations 90% of the time. There are some exceptions made and this shows that the drug plans take into account their local jurisdictional considerations. Federal drug plans explained that they do not all implement the CDR recommendations in the same way, due to their varied client groups. They believe that this is a strength of the CDR process, rather than a weakness.
According to officials from CADTH, there is no evidence that the CDR has created a new and more challenging threshold for drug access compared to what was occurring before CDR existed. In fact, in the five years preceding CDR, the largest public plan in Canada, the Ontario Drug Benefit Program, listed 44% of new drugs that they reviewed. To date, the CDR rate for positive recommendations is approximately 50%.
D. Drug Plans in Other Countries
Pharmaceutical industry representatives provided a commissioned study that suggested that the CDR recommends fewer drugs than international comparators. However, CADTH representatives and academic researchers replied that the positive recommendations rate for Canada is in the midrange of all countries studied, and is higher than for those countries with similar health care systems, such as Australia and New Zealand. They also stressed that one must be very careful in doing such comparisons as some countries may list a drug, but only for partial reimbursement with the remainder being paid by the patient. For example, France has a three level reimbursement model. Other countries undertake national price negotiations which influence reimbursement decisions.
The Committee heard the claim that the CDR is a barrier between patients and potentially life-saving new drug therapies. The Committee understands the frustration of patients and their advocates when the CDR recommends against public reimbursement or even more when the CDR approves a drug but individual drug plans refuse to include that drug on their own formularies. The Committee empathizes with these frustrations. It also acknowledges that sustainability of the health care system is an important and valid consideration.