CLHIA-ACCAP

CLHIA Report on Prescription Drug Policy

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11 for Canadians. In this regard, until the mandate and operations of the PMPRB have been amended, we believe that the PMPRB should expand the list of comparator countries that are used to calculate the Median International Price Comparison with an eye to ensuring that the comparator countries are more representative of the OECD as a whole. THEREFORE, THE CLHIA RECOMMENDS THAT: • THE MANDATE OF THE PMPRB BE CHANGED SUCH THAT ITS GOAL IS TO ACHIEVE THE LOWEST POSSIBLE PRICES FOR CANADIANS, LEVERAGING AN ECONOMIC AND MARKET DRIVEN PROCESS WITH INTERNATIONAL REFERENCING BEING ONLY ONE OF MANY INPUTS TO THIS PROCESS; AND • IN THE SHORT-TERM, WHILE MORE FUNDAMENTAL REFORM IS BEING IMPLEMENTED, THE LIST OF INTERNATIONAL COMPARATOR COUNTRIES BE EXPANDED TO MAKE IT MORE REPRESENTATIVE OF THE ENTIRE OECD. b.1.2 More Aggressive Use of Value-based Pricing One notable trend globally has been a recent move to "value-based pricing" by national regulators. Under value-based pricing agreements, payers and pharmaceutical companies agree to link payment for a medicine to value achieved, rather than volume. Agreements dictate price (and/or coverage) relative to actual, real-world performance. In 2012, for example, Germany radically changed its reimbursement system to a value-based pricing system. Pharmaceutical companies have one year to prove the value of new pharmaceuticals when compared to existing offerings. Achieving value will result in obtaining a premium price compared to the competition; not achieving value will result in a price based on similarly effective, existing (and potentially generic) pharmaceuticals.

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