Provincial budgeting means a federal approach for Canadian healthcare companies
Canada operates a single-payer healthcare system in which the majority of services are provided by private entities, which are paid for at the provincial level. The Canada Health Act of 1984 stipulates universal coverage for all insured health services as administered by the country’s ten provinces. Medication is covered on a province-by-province basis. The split between public and private healthcare is roughly 70 to 30 percent.
Canada actually parallels Europe in terms of pricing, reimbursement and market access”
Because healthcare is managed by each of the ten provinces, pharmaceutical companies have to look at Canada as ten individual markets, as each has its own regulations regarding pricing and reimbursement. “Canada actually parallels Europe in terms of pricing, reimbursement and market access,” remarks Michael Seckler, CEO of Ferring Canada. “The country has a challenging product launch environment and requires careful considerations to provincial and private payer reimbursement. We have to be cleverer to communicate our value proposition to payers and other stakeholders. We take this very seriously and at Ferring we start consideration of market access as early as possible in product development and life-cycle management planning.”
According to LEO Pharma Canada’s president and CEO Christian Scheuer, the complexity of the Canadian system has created an opportunity for some pharma companies to reinvent their business model. “There are so many stakeholders to engage with today that it creates a system or a network,” says Scheuer. “From an internal organizational perspective, it would imply that access and scientific affairs are now as important as sales and marketing when engaging with the marketplace.”
Part of the challenges come from having an incredibly complex and multi-layered system. Deborah Brown, president of EMD Serono Canada, comments that “for such a vast geography with a population the size of California, to have 10 decision makers in healthcare makes no sense. We are duplicating costs over and over in the healthcare system.” Brown also points to the inefficiency in monitoring prescriptions. “In terms of cost utilization efficiency, I think that adherence must be tackled, particularly with proper use of medications. Pharmaceutical companies in Canada need to determine if patients are actually taking their medications correctly or often enough, which would reduce costs. This populace perspective on the freeness of drugs can result in patients not being adamant about taking medications or having a poor diet. Because EMD Serono is in the specialist area, it is a unique challenge for us to offer value, particularly given the cost of many of the company’s products.”
“Regarding the provision of public access and drug approval, Canada ranks 26 out of 32 developed countries,” says Valeant Canada president Jacques Dessureault. “On average, only 20 percent of products get reimbursement. Clinical data repositories do not even provide a positive response to half of the brands seeking public reimbursement. It is a very tough environment to do business because of the opportunity of an ageing, socialized, and organized healthcare system combined with pressure on the system.”
Because health-related products are often considered a simple line-item in a provincial budget, “there is a tendency in procurement to only look at price,” says Brian Lewis, CEO of MEDEC, Canada’s national medical technology association. “A device might have a price that is higher for the operating room (OR) and when you are in a hospital the OR can only grow so much because budgets are cut into silos there. The downstream effect of the product is that re-hospitalization and retreatment are reduced because of the device’s value but the amount that those considerations are accounted for when products are purchased is not enough.”