International reimbursement levels revealed in Canadian industry report
This article was originally published in Scrip
The Canadian pharmaceutical industry association, Rx&D, has published a report ranking OECD countries according to their public reimbursement of 150 innovative medicines (representing 181 indications in Canada), finding that Canada ranks 23 out of 29 countries, far behind the OECD average.
It finds the international "positive reimbursement percentage" average is 64%, with the US topping the list at 88%, and Poland at the bottom with 15%. Other countries doing well according to the rankings are Portugal, Greece, Germany and Norway (see table below).
It is no surprise to see some countries such as New Zealand at the bottom of the list (rank: 28) as its pharmaceutical management agency, Pharmac, is known to be a tough negotiator on reimbursement. But it is a surprise to see Japan at the bottom.
However, the report, now in its fourth year, sees the world from a Canadian perspective so that not all of the drugs/indications are available in all of the countries. Still it does give an indicator as to which countries are good at reimbursement.
Russell Williams, president of Rx&D, said the report reveals that less affluent countries than Canada are finding ways to provide greater access to innovative medicines through their public drug plans.
Australia's R&D industry association was concerned by Australia's ranking in the bottom third. Dr Brendan Shaw, Medicines Australia's chief executive, said: "In essence this report measures the willingness of governments to pay for new innovative pharmaceuticals and Australia doesn't stack up too well ... Australia is falling behind other countries in making innovative medicines available to patients. This report challenges policy makers in Australia to seriously rethink the allocation of the public healthcare dollar."
The 150 drugs in the report comprise 117 drugs (representing 132 indications) that have been reviewed by the Canadian Expert Drug Advisory Committee (CEDAC) of Canada's Common Drug Review from December 2003 (from its inception) to December 2009, plus 33 anticancer drugs (representing an additional 49 indications) that have been introduced in Canada over the last five years. (CEDAC makes recommendations to each of the participating federal, provincial and territorial publicly funded drug plans regarding the listing on their formularies.)
Mark Ferdinand, Rx&D's vice president of policy, research and analysis, told Scrip that the report could not make "conclusions" about countries other than Canada. "Our aim is to explore how other countries can reimburse these drugs while Canada has not."
He thinks that there are several different layers of the Canadian reimbursement process after a drug is approved that is delaying patients' access to drugs. Sometimes a patient can wait up to "two years" to access a drug on a public plan compared with a private plan, and in many instances these sort of patients include the "poor" and elderly. "Those other public plans [in other countries] are doing something right to reimburse these drugs, but Canada is not taking an individual approach on re-imbursement."
He says the next phase of the research is to look at other countries' reimbursement systems to identify "best practice" so Rx&D can then have a discussion with the Canadian government and other stakeholders. Next year's report will also contain reimbursement information for four new OECD members: Chile, Estonia, Israel and Slovenia.
Drug spending proportion
The report also ranks countries according to their pharmaceutical spending as a percentage of total health spending (see table). Canada spends about 17.2% of its total health expenditure on pharmaceuticals (this includes drug cost, distribution and professional fees and allowances), which is also the OECD average.
However, some countries, such as Greece and Portugal (above 20%) rely more on pharmaceuticals in the delivery of health services. The report notes that given the drug price-cuts seen this year in several countries and the looming patent cliff, "we can expect to see changes in this metric over the next few years".
The report also ranks countries according to reimbursement of "first-in-class medicines" and oncology drugs.
Rank | Country | Pharmaceutical spend as % of total health spend |
1 (88%) | US | 11.9 |
2 | Portugal | 21.8 |
3 | Greece | 24.8 |
4 | Germany | 15.1 |
5 | Norway | 7.6 |
6 | Italy | 18.4 |
7 | France | 16.4 |
8 | Belgium | 16.4 |
9 | Sweden | 13.2 |
10 | UK | 11.8 |
11 | Slovak Rep. | 28.1 |
12 | Switzerland | 10.3 |
13 | Austria | 13.3 |
14 | Finland | 14.4 |
15 | Denmark | 8.6 |
Average (64%) | – | 17.2 |
16 | Netherlands | 11.5 |
17 | Iceland | 13.9 |
18 | Czech Republic | 20.4 |
19 | Australia | 14.3 |
20 | Ireland | 17.3 |
21 | Scotland | 19.3 |
22 | Republic of Korea | 23.9 |
23 (51%) | Canada | 17.2 |
24 | Turkey | 26.6 |
25 | Japan | 20.1 |
26 | Spain | 20.5 |
27 | Luxembourg | 8.4 |
28 | New Zealand | 9.4 |
29 (15%) | Poland | 22.6 |