Abstract
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.