Coverage of new medicines in Federal-Provincial public drug plans in Canada 2009-2018
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CITATION: Canadian Health Policy Institute. Coverage of new medicines in Federal-Provincial public drug plans in Canada 2009-2018. Canadian Health Policy, September 2019. canadianhealthpolicy.com.
AUTHOR(S): This paper is corporately authored and edited based on proprietary template models and methods that are intended to facilitate regular updates. The design and content are a cumulative reflection of the diverse contributions collectively attributable to the CHPI affiliated researchers who may have variously participated in updating each edition. Data sources, methods and editorial presentation may evolve from previous editions.
DISCLAIMER: This study uses data from IQVIA Inc. The analysis, conclusions and opinions expressed in this paper do not necessarily reflect the views of the data supplier.
HIGHLIGHTS
- Health Canada approved 491 new drugs from January 1 2009 to December 31 2018.
- On average only 26% of new drugs were covered by public drug plans by May 30 2019.
- Quebec covered the highest percentage of new drugs (34%). Prince Edward Island covered the lowest percentage of new drugs (20%).
- The average wait was 690 days to list a new drug on the public formulary.
- Quebec had the shortest average wait (507 days). Prince Edward Island had the longest average wait (882 days).
- Full Benefit coverage rates ranged from a low of 4% in British Columbia and Manitoba, up to only 11% in New Brunswick.
SUMMARY
What good is your drug plan if it doesn’t cover new medicines?
Good drug insurance should provide financial protection from unexpected and unaffordable costs of accessing necessary medicines when you or your family experience health challenges. Most prescription drugs are priced low enough (relative to other household expenses) to be affordable as an out-of-pocket expense which does not require insurance.[1] Older versions of widely used drug products tend to be the most affordably priced. Newer products – often the latest treatment advances, first-in-class therapies, or targeted therapies for rare diseases – can be expensive and unaffordable without insurance. Therefore, it is important to know how good the coverage is for new medicines under your drug insurance plan.
Since 2013, CHPI has regularly compared the coverage of new medicines across Federal and Provincial public drug plans. The analysis raises awareness about differences in the public benefits provided to patients across the country. The study is relevant to a lot of people in Canada. Of the 36.3 million people who lived in Canada in 2016, 13.1 million people had first-payer public drug benefits or were otherwise eligible (by progressive, income-adjusted cost-sharing) for safety-net coverage under public drug plans.[2]
The study is also relevant to the public debate about the federal government replacing Canada’s current prescription drug insurance system with a universal single-payer national pharmacare program. The 23.2 million Canadians now covered under private plans need to know that the limited scope of coverage in existing public drug plans is the most that they can expect from national pharmacare. In fact, the Parliamentary Budget Officer modeled its national pharmacare cost analysis on Quebec’s public drug plan formulary.[3] Our analysis shows that Quebec had the best public drug plan in the country, but the provincial formulary listed only one-third of all new drugs approved by Health Canada from 2009 to 2018, and the wait for coverage of these few drugs was more than a year on average.
This study is also useful for evaluating the performance of the pan-Canadian Pharmaceutical Alliance (pCPA). The pCPA negotiates prices and terms of coverage for new drugs under federal, provincial, and territorial public drug plans.[4] The pCPA was initiated under the expectation that all jurisdictions would uniformly adopt its decisions and that it would improve access to new drugs. This study informs Canadians about whether the pCPA is actually achieving uniform adoption of new medicines across the country’s public drug plans, and whether it facilitates or hinders coverage of new medicines. Our analysis suggests that the pCPA is failing on both counts. The data show significant variation in the coverage of new drugs across jurisdictions. Where commonality exists, it is mainly that all public drug plans cover few new medicines and take a long time to do so.
OBJECTIVE
To compare the quality of the benefits across Federal and Provincial public drug plans in Canada, according to the coverage for new medicines.
METHOD
Definitions
In this study, the quality of drug insurance coverage is defined by:
- The rate (percentage) of new drugs covered under the plan.
- The wait in days for new drugs to be covered under the plan.
- The scope of coverage for new drugs listed on the formulary:[5]
- Full Benefit (FB) status listing, meaning that the product is covered under the drug plan formulary with no restrictions.
- Special Authorisation (SA) status listing, meaning that the product is covered under the drug plan formulary, but the patient must meet certain criteria before it will be reimbursed. Includes other statuses, such as: Exception Drug, Conditional Listing, Exception Access, Limited Use, and EM (Quebec only).
Data
Data on the total number of new drugs that were available to be covered were obtained from Health Canada. The data included all New Drug Submissions (NDS) that received a Notice of Compliance (NOC) from Health Canada between 2009 and 2018.[6],[7] NDS include any drug that has not previously been approved by Health Canada or a new combination of previously approved drugs. Over-the-counter (OTC) drugs were excluded so that the study included only prescription drugs. The public drug plan coverage analysis used all available data from IQVIA on new formulary listings in public drug plans in Canada. IQVIA iMAM database provides comprehensive data recording the date at which new drugs are added to public drug plan formularies and details about the scope of coverage for Full Benefit or Special Authorisation. All provincial public drug insurance plans were included in addition to the federal Non-Insured Health Benefits Plan (NIHB). Territorial plans were excluded.
Coverage rates
Drug plan coverage rates were calculated as the total number of new drugs that were listed for coverage (either Full Benefit or Special Authorisation) on the public formulary (as of May 30 2019), stated as a percentage of the total number of new drugs approved for sale by Health Canada from January 1 2009 to December 31 2018.
Coverage waits
The wait for coverage of new drugs was calculated from the date that the new drug was approved for sale by Health Canada (marked by the issuance of a NOC) to the date at which the drug was listed on the public formulary. Drugs that have not recorded a public formulary listing were excluded. National averages were calculated as an aggregate across all drugs and all jurisdictions over the time period.
Coverage scope
The scope of coverage was calculated as the total number of new drugs that received Full Benefit coverage versus those that received Special Authorisation coverage on the public formulary (as of May 30 2019), stated as a percentage of the total number of new drugs approved for sale by Health Canada from January 1 2009 to December 31 2018. New drugs that switched status from Full Benefit to Special Authorisation coverage (or vice versa) during the period were recorded as “Full Benefit” coverage to avoid double-counting.
RESULTS
New drugs approved
Table 1 shows the number of NDS approved by Health Canada in each year from 2009 to 2018 and a total for the entire 10-year period. Health Canada approved a total of 491 new drugs from 2009 to 2018.
Federal-Provincial public formulary coverage rates
Table 1 shows the coverage rates in federal and provincial public drug plans as of May 30 2019, for the 491 new drugs approved by Health Canada from 2009 to 2018. Results are shown separately by jurisdiction and by year of Health Canada approval. A total for the entire period is shown for each jurisdiction along with a calculated coverage rate. National averages are shown along the bottom of the table. Chart 1 displays the coverage rates as a percentage of all new drugs approved by Health Canada from 2009 to 2018 by jurisdiction, ranked from lowest to highest. The data show that public drug plans covered very few of the new drugs approved by Health Canada from 2009 to 2018. The average of the coverage rates observed across all public plans over the entire period from 2009 to 2018 was 26%. There are significant differences in the coverage of new drugs between jurisdictions. Quebec covered the highest percentage of new drugs (34%). Prince Edward Island covered the lowest percentage of new drugs (20%).
Table 2 shows the average time in days between when new drugs were approved for sale by Health Canada (from 2009 to 2018) and coverage under public drug plans, by jurisdiction and by year of approval. The average across the entire period from 2009 to 2018 is also shown by jurisdiction. The national aggregate average is shown along the bottom of the table. The data indicate that patients waited a long time for access to new drugs across all public plans. Chart 2 shows the average coverage wait for the entire 2009 to 2018 period by jurisdiction, ranked from the longest to the shortest wait. The national aggregate average coverage wait over the entire 2009 to 2018 period was 690 days. Quebec had the shortest average wait to list a new drug for coverage (507 days). Prince Edward Island had the longest average wait to list a new drug for coverage (882 days).
Federal-Provincial public formulary coverage scope
Table 3 shows the number and percentage of new drugs that were listed in each public drug plan as Full Benefit versus Special Authorisation as of May 30 2019. Results are shown separately by jurisdiction and by year of Health Canada approval. A total for the entire period is shown for each jurisdiction along with a calculated coverage rate. National averages are shown along the bottom of the table. Chart 3 displays the coverage rates as a percentage of all new drugs approved by Health Canada from 2009 to 2018 by jurisdiction, ranked from lowest to highest rate of Full Benefit formulary listings. All federal and provincial public drug plans listed most drugs that were covered in each jurisdiction as Special Authorisation versus Full Benefit. There was a significant difference in the scope of coverage for new drugs between public drug plans. New Brunswick listed the highest number of new drugs as Full Benefit over the study period (53). British Columbia and Manitoba listed the lowest number of new drugs as Full Benefit (21). Of the 491 new drugs approved by Health Canada from 2009 to 2018, Full Benefit coverage rates ranged from a low of 4% in British Columbia and Manitoba, up to only 11% in New Brunswick.
POLICY IMPLICATIONS
The findings of this study have two main policy implications. First, the analysis sheds light on the debate about what kind of coverage will be provided under a universal single payer public drug program like national pharmacare. The limited scope of coverage in existing public drug plans is indicative of what Canadians can expect from national pharmacare. Governments need to improve access to new medicines in existing public plans. Other research has shown that this would be far easier and less expensive than national pharmacare.[8] Second, the results reflect the poor performance of the pan-Canadian Pharmaceutical Alliance (pCPA), which negotiates the prices paid and terms of coverage for new drugs on behalf of the federal, provincial, and territorial public drug plans.[9] The pCPA was initiated under the expectation that all jurisdictions would uniformly adopt its decisions and that it would facilitate public coverage of new medicines. Our analysis suggests that the pCPA is failing to achieve uniform adoption of new medicines across the country’s public drug plans and is acting as a barrier to public coverage of new medicines. The data show significant variation in the coverage of new drugs across jurisdictions. Where commonality exists, it is mainly that all public drug plans cover few new medicines and take a long time to do so.
[1] Canadian Health Policy Institute. Out-of-pocket prescription drug costs: What are the implications for National Pharmacare? Canadian Health Policy, October 2018.
[2] Skinner, Brett J. Prescription drug plan coverage 2016: how many Canadians were insured, under-insured or uninsured? Canadian Health Policy, June 11, 2018.
[3] Office of the Parliamentary Budget Officer. Federal Cost of a National Pharmacare Program. Ottawa, Canada. 28 September 2017.
[4] Council of the Federation [Canada’s Premiers]. The pan-Canadian Pharmaceutical Alliance. http://www.canadaspremiers.ca/pan-canadian-pharmaceutical-alliance/.
[5] IQVIA (2019). iMAM Glossary of Terms – Integrated Market Access Console.
[6] Under the regulations of the Food and Drugs Act, each new drug must be issued a NOC from Health Canada certifying its safety and effectiveness before it can be sold in the Canadian market.
[7] This study includes pharmaceutical and biologic drugs.
[8] Skinner, Brett J. Close the Gaps: Patient Benefits and Taxpayer Costs of 3 Pharmacare Options. Canadian Health Policy, April 2019.
[9] Council of the Federation [Canada’s Premiers]. The pan-Canadian Pharmaceutical Alliance. http://www.canadaspremiers.ca/pan-canadian-pharmaceutical-alliance/.
