The impact of willingness-to-pay threshold on price reduction recommendations for oncology drugs: a review of assessments conducted by the Canadian Agency for Drugs and Technologies in Health.

Since late 2020, the Canadian Agency of Drugs and Technologies in Health (CADTH) has been using a threshold of $50,000 (CAD) per quality-adjusted life-year (QALY) for both oncology and non-oncology drugs. When used for oncology products, this threshold is hypothesized to have a higher impact on the time to access these drugs in Canada. We studied the impact of price reductions on time to engagement and negotiation with the pan-Canadian Pharmaceutical Alliance for oncology drugs reviewed by CADTH between January 2020 and December 2022. Overall, 103 assessments reported data on price reductions recommended by CADTH to meet the cost-effectiveness threshold for reimbursement. Of these assessments, 57% (59/103) recommendations included a price reduction of greater than 70% off the list price. Eight percent (8/103) were not cost-effective even at a 100% price reduction. Of the 47 assessments that had a clear benefit, in 21 (45%) CADTH recommended a price reduction of at least 70%. The median time to price negotiation (not including time to engagement) for assessments that received at least 70% vs >70% price reduction was 2.6 vs 4.8 months. This study showed that there is a divergence between drug sponsor's incremental cost-effectiveness ratio (ICER) and CADTH revised ICER leading to a price reduction to meet the $50,000/QALY threshold. For the submissions with clear clinical benefit the median length of engagement (2.5 vs 3.3 months) and median length of negotiation (3.1 vs 3.6 months) were slightly shorter compared with the submissions where uncertainties were noted in the clinical benefit according to CADTH. This study shows that using a $50,000 per QALY threshold for oncology products potentially impacts timely access to life saving medications.

Can Standard Health Technology Assessment Approaches Help Guide the Price of Orphan Drugs in Canada? A Review of Submissions to the Canadian Agency for Drugs and Technologies in Health Common Drug Review.

Orphan drugs have high acquisition costs and when standard health technology assessment (HTA) approaches are used to assess their cost-effectiveness, they often appear not cost-effective. The Canadian Patented Medicine Review Board (PMPRB), through new regulations, will apply HTA assessment results from the Canadian Agency for Drugs and Technologies in Health (CADTH) and Institut national d'excellence en santé et en services sociaux (INESSS) when setting the maximum price that can be charged for Category I patented medicines (treatments with an annual cost exceeding 150% of GDP per capita of Canada or with expected annual market size >$50M). Through these regulations, PMPRB has also established a willingness-to-pay threshold of CAD$200,000 or CAD$150,000 per quality adjusted life year (QALY) for medications with a prevalence of no more than 1 in 2000 across all approved indications. We reviewed the orphan drug submissions made to CADTH's Common Drug Review (CDR) January 2015-May 2020 to understand how the methodology of assessing cost-effectiveness of orphan drugs has guided pricing in Canada. A total of 35 orphan drug submissions were assessed by CDR in this period, none of which met the willingness-to-pay threshold of CAD$50,000 per QALY. Only one drug met the CAD$200,000 per QALY for Therapeutic Criteria Level I, and two drugs met CAD$150,000 per QALY for other Therapeutic Criteria Levels proposed by PMPRB. Price reductions of 32-99% were recommended for treatments that were approved in order to be listed for reimbursement. This review showed that the new PMPRB regulations could be creating challenges for manufacturers of rare disease treatments to meet Canadian pricing regulations. These regulations may jeopardize the launch of new medicines and limit opportunities to add to the development of real-world evidence of orphan drugs, which can be used in reimbursement approaches such as pay-for-performance.