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TheRoadtoMarketAccessFromConcepttoEndofLifecycle

April2017

CAHRMA101

ROUBAIXSTRATEGIESINC.

Roubaix[ru-bae]:

• The“Paris-Roubaix”isoneofthemostdifficultsingle-dayprofessionalcyclingracesintheworld. Atmorethan250km,cyclistsmusttransitionbetweenpavedroadsandcenturies-oldcobblestonepaths. JustlikemarketaccessinCanada,negotiatingthesechallengingconditionsrequiresstrategicplanning, carefulpreparation,superiorteamwork, andabitofcourage.

TheRoadtoMarketAccess

1. Overview2. Regulatory3. Pricing4. Budgets5. HealthTechnologyAssessment(HTA)6. Patients7. Pan-CanadianPharmaceuticalAlliance(pCPA)8. PrivateDrugPlans

OVERVIEW

AccesstoInnovativeMedicinesinCanada:FromConcepttoMarket

HC HTA pCPA PLAs pCPARenegotiations?

LOE

20-YEARPATENTTERM

PublicDrugPlanReimbursement

PMPRB/PRICING

8-12YEARS 12-8YEARS

PrivateDrugPlanReimbursement

©RoubaixStrategies Inc.Allrights reserved.

Thousandsofcandidates Pre-Clinical– Clinical(Ph1-3)

PMPRB=PatentedMedicinesPricesReviewBoard;HC=HealthCanada;pCPA=pan-CanadianPharmaceuticalAlliancePLAs=ProductListingAgreements;LOE=LossofExclusivity;HTA=HealthTechnologyAssessment;

AccesstoInnovativeMedicinesisGenerallyLongerinCanadavs.CountrieswithComparableHealthcareSystems

Source:InnovativeMedicinesCanada,AccesstoNewMedicinesinPublicDrugPlans:CanadaandComparableCountries,2016AnnualReport

1Familyphysicians/generalpractitionersandotherswhoprescribedrugsindifferentsettings,includingthehospitalenvironment2pan-CanadianOncologyDrugReview3LocalHealthIntegrationNetworksinOntario4Includesorganizationssetuptoadviseinsurers/employerssuchaspharmacybenefitmanagers,benefitadvisors

MarketAccess:TheMostImportantFunctioninCanadianDrugReimbursement

Stakeholder Description 2008 2013 2018Practitioners:Physicians FP/GPs1 , specialists, residents 5.0 3.0 2.0 Pharmacists Hospital/community pharmacy 0.5 0.5 0.5 Nurses RNs, nurse practitioners 0.0 0.0 0.0Payers/Managers:

Government Drug Plans Federal/provincial/territorial (includes cancer agencies) 3.0 3.0 2.5

Drug Approval/Advisory Groups

pCPA, Common Drug Review, pCODR2

and government drug expert groups 0.5 1.5 2.0

Regional Health Authorities Different provincial models (e.g. Alberta Health Services, LHINs3) 0.0 0.0 0.0

Private Drug Plans Insurers, employers and other third parties4 1.0 1.0 1.5

Consumers: Consumers at large, and organizations (seniors’/women’s groups, disease associations, consumer groups)

0.0 1.0 1.0 Consumers/Disease Groups

Total 10.0 10.0 10.0Source:IMSBrogan

SpecialtyDrugsAccountfor80%ofNewHTASubmissionsNoAmountofMarketingCanOvercomealackofDrugPlanFunding

3.5

5.5

1.0

CourtesyJanssenPharmaceuticals

REGULATORY

BytheTimeaPatentedDrug/BiologicisApprovedbyHealthCanada,ithas~10yearsofMarketExclusivity


LOE

20-YEARPATENTTERM


PMPRB/PRICING

8-12YEARS 12-8YEARS





HealthCanadaReviews

• HealthCanadareviewsDrugSafety,Efficacy,andManufacturingQuality• NOC=NoticeofCompliance;NOC/c=NOCwithConditions• ProductMonographsprovideinformationonapprovedindicationsforuse,(claimsthatcanbemadebythemanufacturer)clinicaldata,safetydata

• RegulatoryTransparencyisEvolving• HCreviewerreports:CADTHrequiresandisgrantedaccesstoreviewthese.• Listofdrugandhealthproductsubmissionsunderreview(SUR)hasbeenpostedsinceApril2015

• OnMarch9,2017proposestoproactivelymakecertainsubmittedclinicalinformationpubliclyavailablefollowingcompletedreviews

PRICINGWHENDOESITBEGIN?ANDWHATISCONSIDERED?

PharmaceuticalPricingOccursinaGlobalMarketWhichAffectsDecisionsMadeHere

Canadarepresents~2%ofglobalpharmaceuticalmarket1

Source: PMPRB 2015 Annual Report (published 2016)

CanadianPatentedMedicinesDrugPriceYOYChangesConsistentlyBelowtheCPI

CPI = Consumer Price IndexSource: PMPRB 2015 Annual Report (published 2016)

CanadianPatentedMedicinesDrugPricesareatParorLowerThanThreeComparatorCountries

Source: PMPRB 2015 Annual Report (published 2016)

ThereisGrowingAttentiononCanadian(andGlobal)DrugPricing

• PMPRBisconsideringunprecedentedchangestoitsscopeandmandate,asking:

• IsPMPRBrelevantintoday’smarket?

• Istheirmandateappropriateforensuring“non-excessive”pricing?

• Doesitneedtochangetoaddressquestionsofaffordability?

BUDGETSEVENBEFORESUBMISSIONSAREMADEFORDRUGREIMBURSEMENT,BUDGETIMPACTANDVALUEFORMONEYARETHEGROWINGFOCUSOFDRUGPLANS

DrugCostsAreRisingSlightly,ButTheirShareofTotalHealthCostsisDiminishing

1. Source:CIHI,NHEXdatabase,postedatIndustryCanada,2016.

15.0%

15.2%

15.4%

15.6%

15.8%

16.0%

16.2%

16.4%

16.6%

16.8%

17.0%

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f

TotalHealthExpenditures TotalDrugExpenditures Drugs%ShareofTotalHealthExpenditures

$B %Drugs

PublicHealthcareSpendingCloseto40%ofProgramSpend

Theproportionofgovernment

expendituresallocatedto

healthcarehasstabilizedoverthe

lastdecade.

NoteFinancial Management System data is estimated for 2009 to 2015.SourcesNational Health Expenditure Database, Canadian Institute for Health Information; Financial Management System, Statistics Canada;provincial public accounts, budgets, main estimates.

SpendingonHealthcareContinuestoGrow

ProvincesContinuetoStruggleWithDebt


HEALTHTECHNOLOGYASSESSMENT

HealthCanadaApprovesProductforSaleNoticeofCompliance(NOC)

ManufacturerReimbursementSubmissions

Requirementsvarybytypeofdrugplan

Public(Quebec)

INESSS ReviewsbeforeQuebecwillreimburse

PublicRestofCanada(ROC)

CADTH/pCODRbeforepublicdrugprogramswillreview&reimburse

Provincial,Territorial&FederalPublicdrugplans

(NegotiateReimbursementAgreements)

Pan-CanadianPharmaceuticalAlliance

(NegotiateLettersofIntent)

PrivateInsurers

Reimbursementcanvarybyplan

TheRoadtoPharmaceuticalMarketAccessinCanadaisComplex,TravellingThroughVariousChannelstoPatients

CriteriaHarmonization?Variability?ListingDelays?Value-BasedAgreements?

Pre-NOC?

InCanada,ThereisaGapBetweenDrugApprovalandPublicReimbursement

Percentage of new medicines launched and publicly reimbursed by country (IMC 2016 Annual Report)

Percentage of new biologic medicines launched and publicly reimbursed by country (IMC 2016 Annual Report)

IMC: ACCESS TO NEW MEDICINES IN PUBLIC DRUG PLANS: Canada and Comparable Countries (2016)

PATIENTS

FormalPatientInputOccursForHTAReviews;YetEngagementExtendsThroughoutDrugLifecycle


LOE

20-YEARPATENTTERM


PMPRB/PRICING

8-12YEARS 12-8YEARS





ReimbursementStrategy&NegotiationDevelopmentTimelines

-2yrs-3-6mos.NOC +3-6mos.+6mos.+1yr.

Pre-substrategyProcess

pCPANegotiations

HTARecommendation

ProvincialListings

HTASubmission

ProvincialSubmissions

Reimbursementstrategyconsiderations• ValueProposition• Anticipatedmarketdynamicsandcompetitiveset• Commercialstrategy• Payerenvironment• HealthEconomicModeling• Datagaps/planstoaddress

272727CourtesyJanssenPharmaceuticals

NegotiationTimeframesCanVary,andClosedDealsMayBeRevisitedasMarketChanges


LOE

20-YEARPATENTTERM


PMPRB/PRICING

8-12YEARS 12-8YEARS





ThepCPAisFacingGreaterNumbersofDrugsWaitingforNegotiationspCPANegotiationMix:AsofDec31,201681%ofdrugsundernegotiationswiththepCPAareSpecialtyDrugs.Currently~40+DrugsinActiveNegotiations– MorewaitingWait-timesaregoingup:someestimatesindicate~threemonthsUnclearOperatingFrameworkforpCPA’s MandateandObjectives

Specialtydrugsaregenerallydefinedasthoseproductswithanannualcost> $10,000

68%

45%

23% 14%

5%

75%

46%

25%8%

64%

41%

23%

0%

25%

50%

75%

100%

INDEXMONTH 3MONTHS 6MONTHS 9MONTHS 12MONTHS* 18MONTHS*

Sep2015 Dec2015 Mar2016

4of10DrugsRemaininpCPANegotiationsSixMonthsAfterEngagement

*12&18months:threeandonedrugrespectively**AsofDecember31,2016©RoubaixStrategiesInc.2017contact:[email protected]

%ofDrugsRemainingInpCPANegotiationsAfter“IndexDate”

22drugs

22drugs

24drugs

Now43drugproductsinActiveNegotiations**

ArepCPAObjectivesClear?

pCPAObjectives(Website):

1. Increaseaccesstodrugtreatmentoptions;

2. Achievelowerdrugcostsandconsistentpricing,and

3. ImproveconsistencyofcoveragecriteriaacrossCanada.

PRIVATEDRUGPLANS

HealthCanadaApprovesProductforSaleNoticeofCompliance(NOC)

ManufacturerReimbursementSubmissions

Requirementsvarybytypeofdrugplan

Public(Quebec)

INESSS ReviewsbeforeQuebecwillreimburse

PublicRestofCanada(ROC)

CADTH/pCODRbeforepublicdrugprogramswillreview&reimburse

Provincial,Territorial&FederalPublicdrugplans

(NegotiateReimbursementAgreements)

Pan-CanadianPharmaceuticalAlliance

(NegotiateLettersofIntent)

PrivateInsurers

Reimbursementcanvarybyplan

TheRoadtoPharmaceuticalMarketAccessinCanadaisOnlyBecomingMoreComplex

EmployerDrugPlans

CriteriaHarmonization?Variability?ListingDelays?Value-BasedAgreements?

Delays?Caps?Prior-Authorizations?PharmacyNetworks?

Pre-NOC?

Coordination?

ThePrivateStakeholders 23Insurers3PBMs

~3KBenefitAdvisors

~500KPlanSponsors

~23MPlan

Members

34

Payer


Payervalueexpectationsincreasewithshiftingcost:ButCostManagementActionsShouldDifferBasedonVolumeandRisk

Private PlanSpecialtyDrugExpenditure

13.2%

24.2%

29.9%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2007 2013 2015

<3%ofclaimants

2015

16.4%

29.2%

Sources:ESCDrugTrendReports(2014,2016);PMPRB,NPDUIS

Public PlanSpecialtyDrugExpenditure

PrivatePlansTalkAboutIntegratingintothePublicReimbursementProcess.ItisPlausible?

1 6 12

CDRREVIEW

18

PCPANEGOTIATIONS

UPTO15SEPARATEFPTNEGOTIATIONS

HOWMANYPRIVATEPLANNEGOTIATIONS?

ESTIMATEDMONTHSAFTERHEALTHCANADAAPPROVAL

ThepCPAdoesnotnegotiateproductreimbursement.Itnegotiatestheintentionforproductreimbursement

Onmarket

©RoubaixStrategiesInc.contact:[email protected]

The Current LandscapeuEconomicslowdown+Chronicityofdisease+Costofmeds=

↑pressureonemployers=↑pressureonInsurers=↑pressureonPharmamanufacturers

• Prior/SpecialAuthorization• StepEdits• MandatoryGeneric/Therapeuticsubstitution• Tieredformularies• Casemanagement• Preferredpharmacynetworks

uPayersseekingSUSTAINABILITY=OPPORTUNITYforpharmaceuticalmanufacturers

PrivateInsuranceCoveragefor23MillionCanadians

SunLife18%

GreatWestLife18%

Manulife19%

MedavieBlueCross3%

ClaimSecure5%

AlbertaBlueCross7%

PacificBlueCross6%

GreenShield4%

SSQandDesjardins10%

Others11%

Source:JanssenPharmaceuticals

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