Alignment Among Public Formularies in Canada, Part 2: Oncology Medicines

Acknowledgements

This report was prepared by the Patented Medicine Prices Review Board (PMPRB) as part of the National Prescription Drug Utilization Information System (NPDUIS).

The PMPRB wishes to acknowledge the members of the NPDUIS Advisory Committee for their expert oversight and guidance in the preparation of this report. Please note that the statements and findings for this report do not necessarily reflect those of the members or their organizations.

Appreciation goes to Nevzeta Bosnic for leading this project, and to Jeffrey Menzies, Elena Lungu, and Tanya Potashnik for their oversight in the development of the report. The PMPRB also wishes to acknowledge the contributions of the analytical staff Allison Carey, Blake Wladyka, and Brian O’Shea, and editorial staff Sarah Parker, Shirin Paynter, and Laura Fortune.

Disclaimer

NPDUIS operates independently of the regulatory activities of the Board of the PMPRB. The research priorities, data, statements, and opinions expressed or reflected in NPDUIS reports do not represent the position of the PMPRB with respect to any regulatory matter. NPDUIS reports do not contain information that is confidential or privileged under sections 87 and 88 of the Patent Act, and the mention of a medicine in an NPDUIS report is not and should not be understood as an admission or denial that the medicine is subject to filings under sections 80, 81, or 82 of the Patent Act or that its price is or is not excessive under section 85 of the Patent Act.

Although this information is based in part on data obtained from the NPDUIS Database of the Canadian Institute for Health Information (CIHI) and under license from IQVIA’s MIDAS^®, Payer Insights, and Private Pay Direct Drug Plan databases, the statements, findings, conclusions, views, and opinions expressed in this report are exclusively those of the PMPRB and are not attributable to CIHI or IQVIA.

Executive Summary

Each publicly funded drug plan in Canada provides coverage to its eligible population based on a unique plan design, list of approved medicines (formulary), and reimbursed costs. Per the provisions of the Canada Health Act, oncology medicines administered in Canadian hospitals are fully covered by hospital budgets^{Footnote i} and provided at no cost to the patient¹. However, take-home oncology medicines, an emerging standard treatment for many cancers, are not consistently covered by public drug programs in Canadian provinces, which may cause some variations in oncology coverage and payer split between jurisdictions.

This is the second in a series of three PMPRB reports that explore the current gaps and overlaps in Canadian public drug plan formularies. These reports aim to inform discussions on the development of a national formulary, which has been identified as a keystone in ensuring equitable access and achieving better drug prices for Canadians². The first report in this series provided insight into the degree of alignment between the general public drug plan formularies in Canada, using data from 2015.

The current report, Part 2 in the Alignment of Public Formularies in Canada series, addresses the public coverage of oncology medicines reviewed by the Canadian Agency for Drugs and Technologies in Health’s (CADTH) interim Joint Oncology Drug Review (iJODR) or pan-Canadian Oncology Drug Review (pCODR), as of the end of March 2020. In addition to a comparison of the formulary listings, the report unpacks specific oncology market segments, including hospital and take-home, biologic and small molecule, and single- and multi-source medicines.

Part 3 of the series will analyze newer medicines assessed through CADTH’s Common Drug Review (CDR) process.

Key Findings

Coverage of oncology medicines is well aligned across provincial formularies in Canada.

• Individual formulary listing rates for oncology medicines were very high and comparable across provincial programs, with provinces listing an average of 84% of the selected medicines at the medicinal ingredient level. 
• The average listing rate increased to 97% when the corresponding sales were factored in, which indicates that the medicines not covered by the plans accounted for only a small share of national sales.
• Of the 87 selected medicines, 88% were listed in six or more provinces, accounting for 98% of sales. 
• Coverage rates were also comparable for all indications analyzed, with an average of 74% of the selected medicine/indication combinations listed. 
• Listing agreement rates across provincial formularies were high at 84%, increasing to 96% when sales were considered. The rates were identical at the indication level. 

Public formulary listing rates are consistently high across all oncology market segments analyzed.

• Public programs listed an average of 82% of hospital oncology medicines, while take-home medicines had an average rate of 86%. 
• The average listing rate for biologic oncology medicines was just slightly under the average rate for small molecule medicines, with many provinces listing 91% or more of the selected biologics.  
• The coverage rates for multi-source medicines, which include generics and biologics with available biosimilars, were higher than those for single-source medicines in all public programs, ranging from 80% to 100%.

There are some sizeable differences in overall provincial spending and payer split for the selected oncology medicines.

• Provinces with the highest per capita spending on hospital oncology medicines also ranked among the top spenders for take-home medicines. 
• Oncology medicines accounted for a considerably smaller portion of private drug plan spending (3.8%) than in the combined public/private sector (9.9%). 
• The payer split for take-home oncology medicines varied significantly by jurisdiction, driven by differences in financing. 
• Privately insured patients paid more for their take-home oncology medicines than beneficiaries in the public drug plans overall, though the patient-paid share of costs differed significantly among the public drug plans.

Definitions

Agreement rate: the percentage of agreement between listing decisions for any two formularies. Two programs were considered to be in agreement if both plans had the same listing decision: either to list or not to list a medicine.

Formulary: a list of medicines covered as benefits for eligible beneficiaries, as determined by the individual drug plan. For the purposes of this report, provincial formularies include all public drug plans and programs within a province.

Hospital oncology medicines: medicines used for the active treatment of cancer that are usually administered in a clinical setting.

Listing rate: the percentage of selected medicines listed on a formulary compared to the total number of medicines selected for analysis. Weighted listing rates correspond to the total national sales for the given medicines.

Payer split: the distribution of drug costs by source of reimbursement, typically between coverage by public drug programs and private insurers.

Take-home oncology medicines: medicines used for the treatment of cancer that are dispensed for administration in the home.

For more relevant definitions, see the Glossary provided on the NPDUIS Analytical Studies page of the PMPRB website.

Introduction

The costs associated with oncology medicines present an increasingly significant challenge to the sustainability of Canadian public drug plans nationwide. Each province has its own programs to guide decision-making on new and often very costly therapies⁴.

Under the Canada Health Act, prescription medicines administered in Canadian hospitals are directly covered by hospital budgets and provided at no cost to the patient¹. Per the provisions of this legislation, intravenous oncology medicines are fully covered in all provinces.

Take-home oncology medications, which now account for half of the oncology market as an emerging standard treatment option for many types of cancer⁵, are not covered using a consistent approach. In Manitoba, Saskatchewan, Alberta, and British Columbia, take-home cancer medicines are fully covered⁶ through publicly funded programs. In Quebec, the public plan provides coverage for eligible take-home cancer medicines, but individuals may be required to pay a deductible based on income. In Ontario and the Atlantic provinces, these medicines are publicly funded for the portion of the population eligible for public coverage, so patients sometimes bear responsibility for some or all of the costs and rely on private insurance or out-of-pocket payments⁷. In the provinces where oncology medicines are not fully covered, the amount paid by the individual also differs. Detailed information on the coverage of both hospital and take-home medicines is provided in Appendix A.

Since the implementation of the pan-Canadian Oncology Drug Review (pCODR), researchers have found a greater concordance among provinces in funding decisions for these medicines as well as reductions in the time needed for funding decisions⁸. However, the inconsistencies in the public coverage of take-home oncology medicines may lead to inequities in drug access and affordability for cancer patients.

This report is part of a three-part series developed by the PMPRB through the National Prescription Drug Utilization Information System (NPDUIS) research initiative to inform discussions related to a national pharmacare: Part 1 in the series compared the general public plan formularies by providing an overview of listing alignment between the provinces in 2015; the current report (Part 2) focuses on the coverage of oncology medicines; and Part 3 will analyze medicines assessed through CADTH’s Common Drug Review (CDR) process.

The report provides insight into the degree of alignment between the provincial formularies with a focus on the 87 oncology medicines reviewed by CADTH’s interim Joint Oncology Drug Review (iJODR) or pan-Canadian Oncology Drug Review (pCODR) from March 1, 2007, to March 31, 2019.

The first section provides a high-level perspective on the provincial formularies, including listing rates, which compare the percentage of the selected medicines listed in each province as well as their corresponding share of sales; the number of provincial formulary listings for selected medicines; and the rates of alignment between provincial drug programs. The second section more closely examines formulary coverage and alignment based on specific market segments: hospital and take-home medicines; biologic and small molecule medicines; and single- and multi-source medicines. Finally, the third section of the report explores the division of public and private funding of oncology medicines in the Canadian provinces, including the interprovincial variations in payer split and patient contributions.

Methodology

Based on the study criteria, 87 medicines with 166 different indications were selected for the oncology formulary analysis. These medicines accounted for more than $3.0 billion in sales in Canada in 2019, representing 75% of the oncology market and 10% of total pharmaceutical spending.

The analysis focuses on 87 medicines and their 166 respective indications reviewed from March 1, 2007, to March 31, 2019, by the interim Joint Oncology Drug Review (iJODR; 2007–2010) or the pan-Canadian Oncology Drug Review (pCODR; 2010–2019). It reports on the percentage of these medicines listed on province-specific programs for each of the pCODR-participating provinces, as well as the public drug programs in Quebec, as of March 31, 2020.

All public programs at the provincial level were considered, which may mean multiple programs in one province, including hospital formularies, cancer agencies, and/or public drug plans. These programs are collectively referred to as “provincial formularies”. Each province has its own unique set of programs, eligibility criteria, and cost-sharing structures. For an overview of the NPDUIS public drug plans, see the Public Drug Plan Designs reference document on the NPDUIS Analytical Studies page of the PMPRB website.

Selection of medicines

For the purposes of this analysis, a medicine includes all strengths and formulations of the given medicinal ingredient.

Medicines reviewed through the iJODR process and their listing statuses on provincial formularies were extracted from the CADTH website. Listing was confirmed through the review of available formularies or by program representatives.

Medicines reviewed by pCODR were extracted from the CADTH website if final recommendations had been issued and posted during the study period. Listing statuses were found in the Provincial Funding Summary and were confirmed with available public formularies or by program representatives. Submissions and re-submissions for the same medicines and/or indications were carefully reviewed to ensure that the most recent recommendations and indication(s) were considered. Medicines cancelled by Health Canada post market¹⁰ were excluded from the study.

Listing statuses were obtained for all selected indications. A medicine was considered listed if at least one indication assessed by iJODR and pCODR was accepted for reimbursement.

Quebec listing statuses were based on the available data published by the Régie de l'assurance maladie du Québec (RAMQ) on April 29, 2020. 

The IQVIA Private Drug Plan database was used to obtain a list of medicines reimbursed by private drug plans in 2019.

Data sources

Provincial and national sales data was extracted from the 2019 IQVIA Canadian Drugstore and Hospital Purchases Audit (CDH), which captures all sales regardless of the payer (public, private, and out-of-pocket), as well as IQVIA’s MIDAS^® and Private Drug Plan databases.

Oncology drug funding by payer was estimated as of the end of 2019 using IQVIA’s CDH, Private Drug Plan, and Payer Insights databases, as well as the NPDUIS database maintained by the Canadian Institute for Health Information (CIHI).

The CIHI NPDUIS and IQVIA Private Drug Plan databases were also used to estimate patient co-payments.

Analysis

The primary analyses were conducted at the medicinal ingredient level, though results are also provided at the indication level. If a medicine had generic or biosimilar versions available, any version (brand or generic/biosimilar) available on the formulary would designate the medicine as listed.

Market segments analyzed include hospital and take-home medicines, biologic and small molecule medicines, and single- and multi-source medicines.

• Hospital medicines include intravenous medicines administered in hospitals while take-home treatments are oral medicines and those administered by subcutaneous injections.
• Biologics were identified as those listed under Schedule D in Health Canada’s Drug Product Database (DPD). All others were considered small molecule medicines.
• Single-source medicines refer to brand-name medicines produced by one manufacturer without generic or biosimilar versions available on the market. Multi-source medicines are produced by two or more manufacturers and include the original brand-name medicines and/or its generic equivalent(s) and biosimilars.

Formulary listing rates are reported for each of the provinces analyzed both in terms of the number of medicines and their corresponding sales, where applicable.

• Listing rates by number of medicines were calculated by dividing the number of medicines listed on the respective formulary by the total number of medicines (87) or indications (166) selected for analysis.
• Weighting listing rates were calculated based on Canadian national retail and hospital sales in 2019, allocating greater weight to medicines with higher shares of the market.

Agreement rates measure alignment in listing decisions between pairs of provinces for the 87 selected medicines and 166 indications. In total, 45 jurisdictional combinations were compared in terms of the number of medicines and their corresponding sales. The programs were considered to be in agreement if both provinces had the same listing decision: either to list or not to list a medicine.

The oncology market payer split was calculated based on the available data and information on the drug plan designs^{Footnote ii}. Available data sources with information on total provincial sales, retail payer insights, public reimbursement, and private drug plan spending were used for the final estimates.

Patient contributions were calculated by subtracting the plan-paid amounts from the total drug expenditures. These contributions may have been paid out of pocket or by a third-party private insurer.

Limitations

The purpose of this report is to assess the general overlap and gaps in formulary listings of oncology medicines across public drug programs in Canada; it is not intended to assess the appropriateness or relevance of these listings.

Oncology medicines that did not meet the selection criteria were excluded from the study. While those analyzed in this report account for a large portion of the oncology medicines used in Canada and their corresponding sales, they do not represent the entirety of the oncology market.

To provide an equitable point of comparison, this report only analyzes medicines reviewed by iJODR or pCODR and their listing status on public formularies as of March 31, 2020, or those available in the private drug plan data in 2019. This snapshot does not include any medicines that may have subsequently been listed in the formularies or reimbursed by the private drug plans.

Only indications assessed through iJODR or pCODR were considered for this study. As a result, the coverage rates presented in this report might be slightly lower than the coverage for all oncology indications.

A direct comparison of the number of medicines listed may provide an incomplete picture of coverage across jurisdictions, as this number can depend on the therapeutic needs of the eligible population as well as decisions related to the listing.

Weighted formulary listing rates are based on overall sales reported in the CDH database, which is national data that includes all payers. Some medicines, including several with significant sales, were not available in the data at the time of the analysis, which may impact the weighted results. It should also be noted that the data captured in the CDH database for drugstore and hospital pharmacies may vary by jurisdiction.

Patient co-payments do not reflect all patient contributions. These values were calculated based on public and private drug plan data, which may not capture other patient-paid amounts such as plan premiums.

1. Overview of coverage of oncology medicines in Canadian public drug programs

Coverage of oncology medicines is well aligned across provincial formularies in Canada. Individually, provinces list a large proportion of the selected oncology medicines. When national sales for these medicines are factored in, the formulary listing rates are even higher, suggesting that the medicines not covered by the programs account for only a small share of the Canadian oncology market. A direct comparison of listing decisions between pairs of provinces confirms high agreement rates, which indicates that there is an important consensus among the public formularies regarding listing decisions for oncology medicines.

An analysis at the medicinal ingredient level, irrespective of associated indications, found that most of the medicines selected for this study were listed on provincial formularies as of March 31, 2020. Listing rates were relatively high in many provinces, ranging from 62% in Prince Edward Island to 92% in Saskatchewan, with an average of 84% across all provinces analyzed. When the medicines were weighted by national sales, the listing rates were higher and more consistent across jurisdictions, for an average of 97% across all provinces.

The findings show a higher coverage rate in the western provinces, which may be influenced by their centralized model of cancer care¹¹. Variations in the percentage of medicines listed may also be impacted by other factors, such as public drug plan designs and therapeutic needs of the eligible population.

Canadian private drug plans had a similar rate of coverage for the selected medicines, with 85% reimbursed by at least one private plan in 2019. It should be noted, however, that the private sector reimburses significantly fewer cancer patients than the public sector. Injectable medicines administered in hospitals are in most cases funded by the public sector, while take-home medicines are funded by mix of private insurers, public drug programs, and out-of-pocket payments, depending on the jurisdiction where the patient resides. Private drug plans may cover oncology medicines not listed on hospital or other public formularies, additional indications for listed medicines, patients not eligible for public coverage, or contributions to deductibles or co-payments.

Figure 1.1 reports formulary listing rates by province as of March 31, 2020, in terms of the number of medicines listed and their respective sales, along with the percentage of medicines available in private drug plans in 2019.

An analysis of the number of provincial formulary listings revealed that a vast majority (88%) of the 87 selected medicines were listed in six or more of the 10 provinces studied: 50% were listed in all public formularies, while 38% were listed in six to nine public formularies (Figure 1.2). Those listed in six or more provinces accounted for 98% of the national sales for all medicines analyzed. A small proportion of the medicines (10%) were listed in fewer than six provinces. These medicines, which include older iJODR-reviewed medications, accounted for an even lower proportion of total sales, at just 2%. Only two medicines were not listed on any of the public drug programs.

The listing rates reported in the preceding figures compared each of the provincial formularies to the total number of selected medicines. To gain insight into the extent to which the listing decisions align across jurisdictions, agreement rates were also measured by comparing the listing decisions for the 87 selected medicines between pairs of provinces. In total, 45 bilateral comparisons were made across the 10 provinces, with both yes-yes and no-no formulary listings considered as in agreement.

Table 1.1 provides the range of bilateral agreement rates across provinces, both in terms of the number of medicines (unweighted) and their corresponding national sales (weighted).

In terms of the number of medicines, the agreement rates ranged from 63% (Quebec and Prince Edward Island) to 98% (New Brunswick and Nova Scotia), with an average and median rate of agreement of 84% and 86%, respectively. These high levels of alignment are consistent with the harmonized approach to drug review envisioned under pCODR. When sales were taken into account, the average agreement rates increased, ranging from 86% (Manitoba and Prince Edward Island) to 100% (Saskatchewan and Manitoba; New Brunswick and Nova Scotia), with an average and median rate of agreement of 96% and 98%, respectively. These results further support the finding that the medicines not consistently listed account for only a small average share (4%) of total sales.

Table 1.1 Formulary agreement rates in public drug programs, oncology medicines*

For a better understanding of these findings, the analysis was also performed at the indication level by comparing coverage for the specific indications associated with each of the 87 selected medicines, for a total of 166 different medicine/indication combinations. The results show that most indications for the selected medicines were listed by the individual provinces as of the end of March 2020. British Columbia covered the highest number of indications, at 81%, followed by Saskatchewan and Manitoba at 80% and 79%, respectively. The average coverage rate across all programs analyzed was 74%, which is 10 percentage points below the average at the medicine level.

Figure 1.3 reports the formulary listing rates for public drug programs as of March 31, 2020, in terms of the number of medicine/indication combinations covered in each province.

Table 1.2 provides the ranges of bilateral agreement rates by indication across the plans analyzed, in terms of the number of medicine/indication combinations.

Agreement rates ranged from 67% (Quebec and Prince Edward Island; British Columbia and Prince Edward Island) to 95% (Saskatchewan and Manitoba), with average and median rates of 84% and 86%, respectively. These rates are equivalent to the agreement rates at the medicinal ingredient level.

Table 1.2 Formulary agreement rates in public drug programs, oncology medicines* by indication

2. Coverage of oncology medicines by market segment

Public formulary listing rates are consistently high across all oncology market segments analyzed. The coverage rates between hospital and take-home medicines are similar across many jurisdictions, irrespective of the provincial model of cancer care. Biologics are listed at a rate similar to their small molecule counterparts and have higher coverage in some individual jurisdictions. Rates for multi-source medicines surpassed those for single-source medicines in all public programs.

Hospital and take-home medicines

The coverage rates between medicines delivered in the hospital and those taken at home were similar across many jurisdictions. Unsurprisingly, provinces with universal programs for oncology medicines showed nearly the same trends for hospital and take-home medicines, but those with different funding mechanisms also demonstrated very similar results, with some interprovincial variability in coverage within both segments.

Of the 87 medicines selected for the analysis, 40 were hospital-based and 47 were take-home. The hospital market represented 55% of drug sales nationally, while take-home medicines accounted for 45% of the market. Figure 2.1 reports the formulary listing rates by public drug programs for (a) hospital and (b) take-home oncology medicines as of March 31, 2020, in terms of the number of medicines covered.

The average public program listing rate for hospital medicines was 82%, ranging from 60% in Prince Edward Island to 90% in British Columbia, Saskatchewan, and Manitoba. When sales were considered, the listing rates were consistently high in all provincial drug programs, at 98% on average. Sales were highly concentrated among a small group of medicines: the top 10 hospital medicines represented 90% of total national hospital sales in 2019, of which nine were listed in all provinces and one was listed in nine provinces. These findings suggest that the higher-sales hospital medicines were listed nearly uniformly in the Canadian provinces.

Take-home medicines had a slightly higher average listing rate, at 86%. The listing rates varied from 64% in Prince Edward Island to 94% in Saskatchewan. While Quebec had one of the lowest rates in the hospital market, it ranked among the top for take-home medicines. Similar to the trends observed in the hospital sector, the weighted average listing rates were consistently high in the majority of the provincial drug programs, at 96% on average.

Private drug plans recorded sales for all take-home medicines and 68% of the hospital medicines. As mentioned earlier, the private plans may reimburse additional indications for publicly listed medicines as well as medicines not listed on hospital formularies.