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canada may fall behind without an 'orphan' drug strategy

canada’s new drug framework is set to go into effect january 2021. rare disease groups are worried about prices.

by emma jones

dec 8 2020

5 minute read

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canada needs a separate orphan drug strategy, says rare disease group

"[if] a lot of new drugs don't come along, these patients don't get treated and lot of these patients are going to die." fahroni / getty

amid an overhaul to how drug prices are negotiated in canada, rare disease advocacy groups are pushing for a specific rare-disease therapy strategy to address what they say is the reality of modern medicine. without such a program, they caution, canadians will fall behind in accessing next-generation treatments.

“orphan drugs strategies” are plans put into place to encourage the development of treatments that are not likely to be profitable without external help. this can be due to a number of factors, such as a small patient population that will pay for the drug or high development costs. the concern is that without these strategies, rare diseases are often ignored, or orphaned, in research and development activities.

in lieu of an orphaned drug strategy, canada builds considerations for rare disease treatments into the existing negotiation scheme. for durhane wong-rieger, the president & ceo of the canadian organization for rare disorders, this is a mistake.

“[the drug-pricing system] was never really designed for innovative therapies,” says wong-rieger. “…it’s sort of like trying to give a standard value for housing, regardless of where you are, regardless of whether this is housing in a very expensive area or…it’s housing in swamps [where] you’ve had to drain the entire swamp before you do anything.”

strategies in place around the world include guaranteeing a period of time where the applying pharmaceutical company will have exclusive marketing rights (seen in australia and the european union (eu)), hundreds of millions of dollars earmarked for research into rare diseases (seen in the us and the eu), and fast tracking the drug approval process (seen in japan).

the latest canadian guidelines exempt medicines expected to have an annual revenue of less than $12 million from certain rebate negotiations and may also cap price reductions. the patented medicine prices review board (pmprb) says that these factors, as well as a special regulatory pathway reserved for orphan drugs in the existing framework, makes these treatments more, not less, likely to obtain market approval in canada.

the pmprb also claims that, due to factors such as fewer patients available for clinical trials, costs to develop rare disease treatments is acutally on average more than 20 per cent lower than r&d costs for other treatments.

that being said, small sample sizes may not always work to the advantage of the pharmaceutical company.

rare diseases means smaller sample size

the reality of clinical studies for rare disease treatments including small sample sizes due to the rarity of the disease – can create an uphill battle. trials that do not meet accepted standards may have difficulty proving their worth in initial negotiations.

“what they do is something called a discounting factor: ‘i will put a lot of reservations around what you’re presenting to me’,” says wong-rieger. “and i will then say, because it’s uncertain, i am going to actually downgrade it in terms of what we’re willing to consider to be the actual value of it. all of these things conspire against bringing in innovative therapies.”

the pmprb, however, says that the new guidelines take this into account and have room for price adjustments if needed.

“the pmprb’s new guidelines allow for adjustments in a patented medicine’s ceiling price if new evidence comes to light that would result in a new and different pharmacoeconomic evaluation,” said a spokesperson for the pmprb.

the ability to re-negotiate prices, however, may have unintended consequences.

the organization for rare disorders cautions that international companies may read the ability to re-negotiate upper-limit prices as a negotiation tactic. once companies have already invested in marketing, training, and logistics to roll the product out in canada they will be in a vulnerable position and may not have a positive view of the federal government’s ability to trigger price negotiations.

“a support program is based on your assumption that you will have x number of patients at y price, but now that’s not the case. it may be x number of patients at y minus something ,” wong-rieger explains. “this creates a lot of uncertainty for the companies.”

inflation nightmare

the patented medicine prices review board (pmprb) works to spearhead initial drug price negotiations, setting a maximum threshold for what drug companies can charge the various public health bodies in canada. an exponential increase in medicine prices over the past decade coupled with a record low in pharmaceutical research and design (r&d) activities in canada has led to an overhaul of the system .

canada currently ranks third in highest patented drug prices in the world, after only the u.s. and switzerland. the new guidelines are expected to save canadians approximately $6.2 billion over the next ten years, according to a presentation given on the new guidelines.

the changes to the pmprb include altering the group of countries canada compares pricing with: removing the united states and switzerland (countries which pay the highest drug costs in the world) and adding in australia, belgium, japan, netherlands, norway and spain. prices for new medicines must be equal to or lower than the medium of these 11 countries.

the pmprb is also pushing back on claims that higher prices will equal better access to innovative therapies.

“many other oecd countries with lower patented medicine prices than canada have better access to new therapies and a higher number of clinical trials per capita,” a spokesperson for the pmprb continued. they did not specify which countries they were referring to, or if these countries also have an orphaned drug program.

for some, the new guidelines don’t go far enough to get canada to the cutting edge of innovative therapies. in an industry that concerns peoples lives, any missed opportunity is too costly.

“the pmprb is saying let’s put [these guidelines] in place and we’ll see after a few years,’ says wong-rieger. “but in the meantime, [if] a lot of new drugs don’t come along, these patients don’t get treated and lot of these patients are going to die. do you really want to need to sit around for three to five years while you decide whether this works?”

emjones@postmedia.com | @jonesyjourn

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canada may fall behind without an 'orphan' drug strategy

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canada may fall behind without an 'orphan' drug strategy

canada’s new drug framework is set to go into effect january 2021. rare disease groups are worried about prices.

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