Drug pricing and its impact on R&D investments, clinical trials and availability of medicines in Canada PMPRB Research Webinar July 6, 2020 Elena Lungu, Manager, Policy Development Caroline Peterson, Policy Analyst Naghmeh Foroutan, Policy Analyst Patrick McConnell, Policy Analyst Introduction Background ➢ Drug prices have been historically thought to influence R&D investments levels, clinical trials location and the availability of drugs, and some stakeholders have raised concerns that the impending patented medicine price reforms would negatively impact drug access in Canada. Objective ➢ This presentation provides insight on the extent to which aligning medicine prices in Canada with international norms would adversely affect R&D investments levels, the number of clinical trials and the availability of drugs in Canada. Data Sources ➢ PMPRB Data, PMPRB Annual Report, PMPRB Meds Entry Watch, Health Canada Drug Product Databases, Health Canada Clinical Trial Database, GlobalData, IQVIA’s MIDAS® Database, OECD, EFPIA, IMS Brogan report for Department of Foreign Affairs 2 Key Findings 1 Lower prices do not generally result in lower R&D investments, and many countries with lower 2 prices than Canada have higher investments Similarly, lower prices do not generally result in a lower number of clinical trials, and many countries 3 with lower prices than Canada have more clinical trials underway Despite low R&D investments, Canada has a sizable number of clinical trials underway, a minority 4 of which are funded by patentees There are no early signs that patented medicine price reforms are resulting in fewer clinical trials 5 initiated in Canada There are no early signs that patented medicine price reforms are resulting in fewer new medicines 6 being launched in Canada The 30-year policy objective to increase R&D investments in Canada by aligning prices with premium-priced countries has not been met 3 1 Regulatory price regime envisioned by the Patent Act In 1987, Canada enacted a two-fold reform of its medicine patent regime (Bill C-22) that sought to balance competing industrial and social policy objectives: ➢ Incentivize R&D expenditure through stronger patent protection; ➢ Mitigate the economic impact of stronger patent protection on the health system. The PMPRB was conceived as C-22’s “consumer protection pillar”, to ensure that prices of patented medicines remain “reasonable” and “affordable”. The intent was to double R&D in Canada (to 10% of revenues) while keeping prices in line with high R&D countries (the “PMPRB7*) on the assumption we would come to emulate their level of investments. *Countries in the PMPRB7 are France, Germany, Italy, Sweden, Switzerland, the UK, and the US. 4 4 1 30 years later The policy objectives sought by the Patent Act have not been met R&D-to-Sales Ratio, Pharmaceutical Patentees, 1988 to 2017 R&D are at a 30-year low: 4.1% Average Foreign-to-Canadian Price Ratios, Patented Medicines, OECD, 2017 Figure source: PMPRB Annual Report, 2017 Data source: PMPRB, MIDAS™ database, 2017, IQVIA. All rights reserved. 5 Canadian prices are 3rd highest 5 Canada has the second highest spending on patented medicines $1,014 Patented Medicine Spending per Capita, OECD Countries, 2018(Note) $384 OECD Median = $197 Note: (i) Patented medicines were identified based on patents in Canada, for which sales were extracted for other countries. (ii) Spending data for Greece, Chile, Estonia, Luxembourg and Mexico include only retail sales. and exclude hospital sales. (iii) Includes only countries for which data are available. 6 Data sources: (1) Patented medicine spending: IQVIA MIDAS® 2018; (2) Population: OECD, 2018. $8 Mexico Mexico Chile Chile $26 $13 Turkey Turkey Poland Poland Estonia Estonia Korea Korea Czech CzechRep. Rep. Netherlands Netherlands New NewZealand Zealand Hungary Hungary Greece Greece $124 $116 $115 $112 $110 $87 $79 $68 $61 Slovakia Slovakia Luxembourg Luxembourg Slovenia Slovenia $198 $197 $188 $181 $168 Japan Japan Australia Australia France France Sweden Sweden Finland Finland Spain Spain Norway Norway Ireland Ireland Germany Germany Belgium Belgium Italy Italy Austria Austria Switzerland Switzerland Canada Canada UnitedStates States United $317 $299 $299 $283 $281 $280 $270 $259 $256 $242 $236 Portugal Portugal $424 UnitedKingdom Kingdom United 1 Key Findings 1 Lower prices do not generally result in lower R&D investments, and many countries with lower 2 prices than Canada have higher investments Similarly, lower prices do not generally result in a lower number of clinical trials, and many countries 3 with lower prices than Canada have more clinical trials underway Despite low R&D investments, Canada has a sizable number of clinical trials underway, a minority 4 of which are funded by patentees There are no early signs that patented medicine price reforms are resulting in fewer clinical trials 5 initiated in Canada There are no early signs that patented medicine price reforms are resulting in fewer new medicines 6 being launched in Canada The 30-year policy objective to increase R&D investments in Canada by aligning prices with premium-priced countries has not been met 7 2 Higher prices do not generally result in greater R&D investments Many countries with lower patented drug prices than Canada have higher per capita R&D investments 1.06 Average Foreign-to-Canadian Price Ratios, 2017 1.00 0.97 0.92 0.88 0.86 0.85 0.84 0.83 0.83 0.81 0.8 0.8 0.79 0.78 0.76 0.72 0.7 0.69 0.69 0.67 OECD Median = 0.81 0.34 $123 $130 $223 $161 $98 Greece Greece $11 $13 $6 $1 $128 R&D per capita, OECD, 2017 $1,058 8 $453 Data sources: PMPRB (FTC, R&D); OECD (Population). Note: Total R&D investments, e.g. by patentees, other companies, universities, hospitals, other. Turkey Turkey Poland Poland $14 Slovenia Slovenia Czechia Czechia $35 Portugal Portugal $55 France France $36 Norway Norway $26 Belgium Belgium Neth. Neth. $93 Spain Spain $117 Hungary Hungary $53 Ireland Ireland $37 UK UK Finland Finland Sweden Sweden $49 Italy Italy $23 Austria Austria Japan Japan Germany Germany Canada Canada Switz. Switz. USA USA 3.21 Avg AvgFTC FTCprice priceratios ratios(patented) (patented) R&D R&Dper percapita capita(C$) (C$) OECD Median = $53 2 Higher prices do not generally result in greater R&D investments The variability in R&D investments levels across the OECD countries is only minimally explained by price levels (very low R squared) Foreign-to-Canadian Price Ratios versus R&D Investment, 2017 1,200 R&D Investment, OECD (C$B) 16 14 12 10 8 R² = 0.2205 6 4 1,000 800 600 400 R² = 0.1992 200 2 Canada Canada 0 0 0 9 R&D Investment per capita, OECD 18 Foreign-to-Canadian Price Ratios versus R&D Investment per Capita, 2017 0.2 0.4 0.6 0.8 Patented Foreign-to-Canada Price Ratio 1 1.2 0 Data sources: PMPRB Annual Report, 2017 (FTC, R&D); OECD (population). Notes: R2 is the percentage of the response variable variation that is explained by a linear model. The United States is not included as with its FTC price ratio of 3.21 it is a significant outlier (see Annex). 0.2 0.4 0.6 0.8 1 Patented Foreign-to-Canada Price Ratio 1.2 2 What is driving R&D? Cost of human capital Market Size Wealth (GDP) Patent Duration Research & Development Profitability Regulatory Approval Time Cost of Clinical Trials Tax Burden Talent pool 10 Note: References are available in the Annex. Research Reputation Key Findings 1 Lower prices do not generally result in lower R&D investments, and many countries with lower 2 prices than Canada have higher investments Similarly, lower prices do not generally result in a lower number of clinical trials, and many countries 3 with lower prices than Canada have more clinical trials underway Despite low R&D investments, Canada has a sizable number of clinical trials underway, a minority 4 of which are funded by patentees There are no early signs that patented medicine price reforms are resulting in fewer clinical trials 5 initiated in Canada There are no early signs that patented medicine price reforms are resulting in fewer new medicines 6 being launched in Canada The 30-year policy objective to increase R&D investments in Canada by aligning prices with premium-priced countries has not been met 11 3 Higher prices do not generally result in more clinical trials Many countries with lower patented drug prices than Canada have a higher number of clinical trials per 1 million people 3.21 Average foreign-to-Canadian price ratios, patented medicines, 2017 5 33 37 44 105 96 95 53 87 93 41 45 74 101 101 Total number of clinical trials per 1 million people, OECD, 2017 Data sources: PMPRB Annual Report, 2017; GlobalData®; OECD (population). TUR KOR SVN EST POL CZE SVK GRC 34 36 44 137 12 POR AUS FRA NOR LUX BEL NLD ESP 7 38 110 0.34 OECD median = 0.81 IRL HUN ESP NLD BEL LUX NOR FRA AUS POR SVK CZE POL GRC EST SVN KOR TUR 22 17 72 100 HUN USA SWI CAN GER NZD MEX JPN CHL AUT SWE ITA FIN UK IRL UK FIN ITA SWE AUT CHL JPN MEX NZD GER CAN SWI USA 1.06 1.00 0.97 0.94 0.94 0.92 0.89 0.88 0.86 0.85 0.84 0.83 0.83 0.81 0.80 0.80 0.79 0.79 0.78 0.76 0.74 0.72 0.71 0.70 0.69 0.69 0.67 0.67 0.54 53 66 71 96 152 Total Totalclinical clinicaltrials trialsper per1M 1Mpop'n pop'n AvgFTC FTC price ratios (patented) Avg price ratios (patented) OECD median = 66 3 Higher prices do not generally result in more clinical trials The variability in the number of clinical trials across the OECD countries is not explained by price levels (R squared close to zero) Foreign-to-Canadian Price Ratios versus Clinical Trials, 2017 3,500 160 140 Clinical Trials 2,500 Canada 2,000 R² = 0.0632 1,500 1,000 Clinical Trials per Million 3,000 120 100 R² = 0.0245 80 Canada 60 40 500 20 0 0 0 13 Foreign-to-Canadian Price Ratios versus Clinical Trials per 1 million people, 2017 0.2 0.4 0.6 0.8 Patented Foreign-to-Canada Price Ratio 1 1.2 0 0.2 0.4 0.6 0.8 1 Patented Foreign-to-Canada Price Ratio Data sources: PMPRB Annual Report, 2017 (FTC, R&D); OECD (population). Notes: R2 is the percentage of the response variable variation that is explained by a linear model.The United States is not included as with its FTC price ratio of 3.21 it is a significant outlier (see annex). 1.2 Key Findings 1 Lower prices do not generally result in lower R&D investments, and many countries with lower 2 prices than Canada have higher investments Similarly, lower prices do not generally result in a lower number of clinical trials, and many countries 3 with lower prices than Canada have more clinical trials underway Despite low R&D investments, Canada has a sizable number of clinical trials underway, a minority 4 of which are funded by patentees There are no early signs that patented medicine price reforms are resulting in fewer clinical trials 5 initiated in Canada There are no early signs that patented medicine price reforms are resulting in fewer new medicines 6 being launched in Canada The 30-year policy objective to increase R&D investments in Canada by aligning prices with premium-priced countries has not been met 14 4 Clinical Trials: the Canadian advantage Top-5 research reputation Cutting-edge R&D Favourable exchange rates Patient access, data accuracy and quality Lowest of G7 for overall Clinical Trial Costs 99.5% of clinical trials approved in 30-days 98% patient recruitment success 15 Lowest R&D costs for intensive sectors* Research clusters creating more efficient multisite trials Low R&D tax burden Industrial Research Assistance Program Strategic Innovation Fund and SR&ED Program† Sources: Investment case on the value of conducting clinical trials in Canada IMS Brogan for Department of Foreign Affairs, Trade and Development & Canadian Clinical Trials Coordinating Centre, Oct 2014. Clinical Trials: The Canadian Advantage Canadian Clinical Trials Coordinating Centre, June 2018 Notes: *Lowest R&D costs for intensive sectors among 10 developed countries & BRIC, †Scientific Research and Experimental Development Tax Incentive Program 4 Canada has one of the highest number of new clinical trials Both in terms of the total number of new clinical trials as well as the clinical trials per 1 million people Canada ranks highly among the PMPRB11 counties Number of new clinical trials per 1 million people, 2019 42 35 30 25 23 23 22 Median: 20 18 14 14 14 11 11 Total number of new clinical trials 9 16 Belgium 475 Australia Netherlands Canada 868 509 834 Sweden Norway Spain UK 231 116 824 912 PMPRB 11 PMPRB 11 Data source: GlobalData ®,Access date: 2020/06/11 France 909 Germany 914 Italy 653 Japan Switzerland US 1078 212 4521 4 A minority of new clinical trials in Canada are funded by patentees A smaller share of new clinical trials are being sponsored by the patentees in the early phases than in the later phase Share of new clinical trials by source of funding, Canada, 2019 Phases 1 to 3 15% 24% 41% 30% Institution/Government 29% 55% Industry non-patentee 30% 46% 27% 30% 32% Phase 1 Phase 2 Industry patentee Phase 3 Industry non-patentee Institution/Government 17 Data source: PMPRB Annual Report 2017, GlobalData ® Note: Institutions include universities, research centers, individual investigators, disease associations, etc. Industry patentee 41% 4 A minority of new clinical trials are funded by patentees in Canada 41% of all the new clinical trials in Canada are sponsored by patentees, below the OECD median of 47% Share of new patentee-sponsored clinical trials: Phases 1 to 3, OECD, 2019 75% 63% 18 Data source: PMPRB Annual Report 2017, GlobalData ® OECD Median: 47% USA 28% 27% S.Korea 30% Australia Japan 36% 35% Slovenia 38% New Zealand France Turkey UK Canada 41% 41% 41% 41% 40% Switzerland Netherlands 44% 44% Norway Italy Slovakia Poland 47% 47% 47% 46% Sweden Germany Greece Spain Finland 49% 49% 49% 49% 48% Czech Rep. Austria 52% 50% Ireland Belgium Mexico Hungary 55% 54% 54% 53% Portugal Estonia Chile Luxembourg 57% 3 Share of patentees funded clinical trials in decline in Canada While over half of all new clinical trials commenced in Canada were sponsored by patentees earlier in the decade, by 2019 the share dropped to 41% Share of new patentee-sponsored clinical trials: Phases 1 to 3 53% 54% 53% 49% 51% 45% 2011 19 2012 2013 2014 Data source: PMPRB Annual Report 2017, GlobalData ® 2015 2016 44% 45% 2017 2018 41% 2019 Key Findings 1 Lower prices do not generally result in lower R&D investments, and many countries with lower 2 prices than Canada have higher investments Similarly, lower prices do not generally result in a lower number of clinical trials, and many countries 3 with lower prices than Canada have more clinical trials underway Despite low R&D investments, Canada has a sizable number of clinical trials underway, a minority 4 of which are funded by patentees There are no early signs that patented medicine price reforms are resulting in fewer clinical trials 5 initiated in Canada There are no early signs that patented medicine price reforms are resulting in fewer new medicines 6 being launched in Canada The 30-year policy objective to increase R&D investments in Canada by aligning prices with premium-priced countries has not been met 20 5 Is the number of new clinical trials started in Canada declining? Studies that answer yes, are based on information in the Health Canada Clinical Trial Database, which is not appropriate for conducting trend analyses and may not be up to date (e.g. “No Objection Letter”) In fact, according to the Health Canada Clinical Trial Database the number of new clinical trials being started in Canada has been markedly higher in 2019 compared to the average of previous years. Number of new clinical trials in Canada Data source: Health Canada 93 79 73 71 63 62 44 46 43 48 40 54 42 44 2019: 707 Average 2014-2018: 536 2019-2020 Previous 5 Year Average September 21 October November Data source: Health Canada Clinical Trial Database December January February Average 5 Is the number of new clinical trials started in Canada declining? According to GlobalData, the number of new clinical trials being started in Canada has been lower in 2019 compared to the average of previous years. Number of new clinical trials Data source: GlobalData® 78 85 72 82 84 80 75 67 64 78 62 64 65 2019: 834 Average 2014-2018: 909 46 2019-2020 Ave. last 5 Years September 22 October Data source: GlobalData®, all phases November December January February Average 5 Data source matters Number of new clinical trials by data source, 2013 to 2019 1000 GlobalData 834 800 707 Health Canada 600 400 200 0 2013 23 2014 2015 Data sources: GlobalData ®, Health Canada Clinical Trial Database 2016 2017 2018 2019 5 Health Canada Clinical Trials Database is not appropriate for conducting trend analyses ➢ The Clinical Trials Database is not a registry, and is in fact a subset of all the clinical trials taking place in Canada: ▪ Not all clinical trials underway in Canada are reflected in this database, nor does it contain comprehensive information about each clinical trial. ▪ The database only includes trials conducted in patients. In other words, the database does not include Phase I trials conducted in healthy volunteers, bioavailability/bioequivalence studies for generics, or information on single participant trials (for privacy reasons). ➢ There are sometimes delays in uploading information into the database, which means that data may not be up to date. ➢ The data in the reports produced by the Health Canada Therapeutic Products Directorate (TPD), and the Biologic and Radiopharmaceutical Drugs Directorate (BRDD) is a more up to date and comprehensive depiction of the clinical trials being submitted to and approved by Health Canada. 24 Source: Centre for Regulatory Excellence, Statistics and Trials (CREST), Health Products and Food Branch, Health Canada; TPD and BRDD Drug Submission Performance Reports (Annual and Quarterly) Available at https://www.canada.ca/en/health-canada/services/drugs-health-products/reports-publications/drug-products.html The number of new clinical trials has been on decline in recent years in all major developed markets 5 Number of new clinical trials per 1 million people, 2014 – 2019 35 30 25 23 20 25 20 15 14 10 5 0 2014 2015 2016 Median PMPRB11 25 Data source: GlobalData ® 2017 Canada US 2018 Switzerland 2019 5 The globalization of clinical trials The number of new clinical trials are on decline in Canada and other developed markets as emerging markets experience substantial growth 4.0 3.60 Indexed new clinical trials, 2014 – 2019 3.42 3.5 2014 2015 2016 2017 2018 2019 3.0 2.5 2.0 1.46 1.5 1.33 1.28 1.03 1.0 0.91 0.86 0.84 0.82 0.80 0.77 0.59 0.5 0.0 China China India India Thailand Thailand Russia Russia Australia Australia United United States States Canada Canada Germany Germany United United Kingdom Kingdom Belgium Belgium Italy Italy Netherlands Netherlands 2,917 1,464 117 161 130 140 -75 -116 -163 -98 -100 -105 6 countries with the largest increases in new clinical trials 26 Japan Japan -681 6 countries with the largest decreases in new clinical trials Data sources: GlobalData®, country ranks determined by the difference between 2019 and the 2014 – 2018 median. Key Findings 1 Lower prices do not generally result in lower R&D investments, and many countries with lower 2 prices than Canada have higher investments Similarly, lower prices do not generally result in a lower number of clinical trials, and many countries 3 with lower prices than Canada have more clinical trials underway Despite low R&D investments, Canada has a sizable number of clinical trials underway, a minority 4 of which are funded by patentees There are no early signs that patented medicine price reforms are resulting in fewer clinical trials 5 initiated in Canada There are no early signs that patented medicine price reforms are resulting in fewer new medicines 6 being launched in Canada The 30-year policy objective to increase R&D investments in Canada by aligning prices with premium-priced countries has not been met 27 6 Countries with lower patented drug prices than Canada may have greater availability of new medicines Despite higher drug prices prevailing in Canada, less than half (48%) of all new drugs have sales in Canada, lower than other major markets, many of which have lower average patented drug prices 3.21 Average foreign-to-Canadian price ratios, patented medicines, 2017 45% 76% 28 48% 59% 58% 61% 60% 55% 48% Turkey Korea Slovenia Estonia Greece Poland Czech Rep Slovakia Portugal Australia France Norway Luxembourg Belgium Neth. Spain 30% 38% 40% OECD Median = 0.81 0.54 0.34 16% 15% 19% 34% 61% Hungary 18% 19% 48% 48% Ireland UK Finland Italy Sweden Austria Chile Japan Mexico N. Zealand Germany Canada Switzerland US 1.06 1.00 0.97 0.94 0.94 0.92 0.89 0.88 0.86 0.85 0.84 0.83 0.83 0.81 0.80 0.80 0.79 0.79 0.78 0.76 0.74 0.72 0.71 0.70 0.69 0.69 0.67 0.67 39% 52% 50% Share of new medicines with sales, 2009 to 2018(1) Data source: PMPRB Annual Report, 2017; PMPRB Meds Entry Watch, 2018. Note (1): New medicines approved in Canada and the PMPRB7 from 2009 to 2017 with available sales, by country, by Q4-2018. Refer to data source for specifics. 45% 39% 31% 32% 26% 39% 38% OECD Median = 40% Average AverageFTC FTCPrice PriceRatios Ratios PMPRB7 PMPRB7FTC FTC Shareofofnew newmedicines medicineswith withsales sales Share PMPRB7Share Shareofofnew newmedicines medicineswith withsales sales PMPRB7 6 New medicines approved in Canada account for 94% of OECD sales for all new medicines While Canada’s share of new medicines launched in Canada and the PMPRB7 is 48%, these medicines do account for a much larger share of OECD sales (94%) Share of new medicines with sales 76% PMPRB7 PMPRB7 OtherOECD OECD Other 29 61% 61% 60% 59% 58% 55% 52% 50% 48% 48% 48% 48% 45% 45% 40% 39% 39% 39% 38% 38% 34% 32% 31% 30% 26% OECD Median 19% 19% = 40% 18% 16% 15% Data source: PMPRB Meds Entry Watch, 2018. US Germany Italy UK Austria Sweden Spain Norway France Canada Finland Switzerland Belgium Japan Portugal Portugal Hungary Australia Slovakia Slovakia Slovenia Korea Ireland Mexico Poland Czech Czech Rep Neth. Turkey Turkey Luxembourg N. Zealand N. Chile Greece Estonia Share of total OECD new medicine sales 99% 91% 95% 94% 93% 95% 90% 90% 81% 94% 91% 92% 88% 84% 85% 81% 82% 77% 83% 80% 81% 80% 77% 56% 57% 67% 48% 47% 58% 38% 38% OECD Median = 82% 6 Is the number of new drugs being launched in Canada declining? Reports that answer yes, are based on sales data, which offer a partial and delayed picture of the drugs being launched in Canada and internationally. The number of new medicines approved by Health Canada over the most recent three quarters is in line with past trends. Number of new medicines approved in Canada per quarter, 2015 - 2020 16 14 Min-Max Jul-Sep 2015-2019 Min-Max Oct-Dec 2015-2019 Min-Max Jan-Mar 2015-2019 12 10 8 6 4 10 9 10 9 July-Sep 2019 Oct- Dec 2019 Jan-Mar 2020 Ave. per quarter 2015-2018 2 0 30 Data source: Health Canada Drug Product Database 6 Is the number of new drugs being launched in Canada declining? Half of new medicines approved in Canada in 2019 received approval within one year of United States approval, higher than in 2018 Share of new medicines approved by Health Canada within one year of FDA approval 55% 54% 50% 50% 45% 2015 31 2016 Data sources: FDA and Health Canada Drug Product Database 2017 2018 2019 Guideline Monitoring and Evaluation Plan (GMEP) ➢ The PMPRB is committed to the development and execution of an extensive GMEP to assess their impact and inform any future enhancements. A. Impact on Medicine Prices D. Impact on PMPRB processes PMPRB GMEP C. Impact on the Economy 32 ➢ The new GMEP is the most comprehensive to date, aiming for an indepth assessment of four key impact areas (shown in the graphic). B. Impact on Access to Medicines ➢ Discussions with interested stakeholders, expected to shape the GMEP development. ➢ Both qualitative and quantitative indicators will be employed, and various administrative, commercial, international, domestic and internal data sources will be consulted. ➢ Trends prior and post framework implementation will be compared and reported regularly (i.e. baseline results versus post implementation). ➢ Some impacts are expected to be immediate, while others may take longer to materialize. Also, some impacts may be directly attributable to the PMPRB, while other may also be impacted by factors outside the PMPRB purview. Patented Conseil d'examen Medicine Prices du prix des m?dicaments Review Board brevet?s (Ques?ons Answers THANK YOU Patented Medicine Prices Review Board I?ll-I Canada Patented Conseil d?examen Medicine Prices du prix des m?dicaments Review Board brevet?s Annex I?l Canada References ➢ Jayasundara K, Hollis A, Krahn M, et al., Estimating the clinical cost of drug development for orphan versus non-orphan drugs. Orphanet Journal of Rare Diseases, 2019. 14(1): p. 12. ➢ Hoen E, Global Access to Medicines Challenge. Time for a new approach? , in 4th International PPRI Conference: Medicines access challenge – The value of pricing and reimbursement policies. . 2019, Journal of Pharmaceutical Policy and Practice: Netherlands. p. k1. ➢ Leoni P and Sandroni A, Can patent duration hinder medical innovation. International Journal of Health Economics and Management, 2016. 16(4): p. 397-406. ➢ Golec J, Hegde S, and Vernon JA, Pharmaceutical R&D Spending and Threats of Price Regulation. The Journal of Financial and Quantitative Analysis, 2010. 45(1): p. 239-264. ➢ Mahlich JC and Roediger-Schluga T, The Determinants of Pharmaceutical R&D Expenditures: Evidence from Japan. Review of Industrial Organization, 2006. 28(2): p. 145-164. ➢ Vernon JA, Examining the link between price regulation and pharmaceutical R&D investment. Health Econ, 2005. 14(1): p. 1-16. ➢ Vernon JA, Drug research and price controls. Health & Medicine, 2003: p. 22-25. ➢ Giaccotto C SR, Vernon J, Explaining Pharmaceutical R&D Growth Rates at the Industry Level: New Perspectives and Insights. 2003. ➢ Green DG, Is price regulation necessary: a summary of arguments PharmacoEconomics, 1998. 14(Suppl 1): p. 137- 142. ➢ Scherer FM, Pricing, profits, and technological progress in the pharmaceutical industry Journal of Economic Perspectives, 1993. 7(3): p. 97- 115. 35 2 Higher prices do not result in greater R&D investments Foreign-to-Canadian Price Ratios versus R&D Investment, 2017 R² = 0.9200 70 R&D Investment, OECD (C$B) 2,000 US 60 50 40 R² = 0.2205 30 20 10 1,800 R² = 0.1992 1,600 1,400 1,200 1,000 800 600 R² = 0.0434 400 US 200 Canada 0 0 36 R&D Investment per capita, OECD 80 Foreign-to-Canadian Price Ratios versus R&D per Capita, 2017 0.5 1 1.5 2 2.5 Patented Foreign-to-Canada Price Ratio Canada 0 3 3.5 0 Data sources: PMPRB Annual Report, 2017 (FTC, R&D); OECD (population). R2 is the percentage of the response variable variation that is explained by a linear model. As a significant outlier the United States has a disproportionate effect on the R2 0.5 1 1.5 2 2.5 Patented Foreign-to-Canada Price Ratio 3 3.5 3 Higher prices do not result in more clinical trials Foreign-to-Canadian Price Ratios versus Clinical Trials, 2017 14,000 180 US Clinical Trials R² = 0.8009 8,000 6,000 4,000 R² = 0.0632 Canada R² = 0.0245 160 2,000 Clinical Trials per Million 12,000 10,000 Foreign-to-Canadian Price Ratios versus Clinical Trials per 1 Million People, 2017 140 120 100 80 Canada 60 R² = 0.0085 40 US 20 0 0 0 0.5 1 1.5 2 2.5 3 3.5 0 Patented Foreign-to-Canada Price Ratio 37 Data sources: PMPRB Annual Report, 2017 (FTC, R&D); OECD (population). R2 is the percentage of the response variable variation that is explained by a linear model. As a significant outlier the United States has a disproportionate effect on the R2 0.5 1 1.5 2 2.5 Patented Foreign-to-Canada Price Ratio 3 3.5 6 List of new medicines approved by Health Canada per quarter 2019- 2020 Jul-Sep 19 Trade Name NOC date 1 Netspot 03-Jul-19 2 Esperoct 3 Jan-Mar 20 Trade Name NOC date Trade Name NOC date 1 Trulance 10-Oct-19 1 Vyndaqel 20-Jan-20 04-Jul-19 2 Balversa 25-Oct-19 2 Rozlytrek 10-Feb-20 Vitrakvi 10-Jul-19 3 Intrarosa 01-Nov-19 3 Cablivi 28-Feb-20 4 Dacogen 11-Jul-19 4 Galli Eo 13-Nov-19 4 Nubeqa 20-Feb-20 5 Nerlynx 16-Jul-19 5 Aklief 25-Nov-19 5 Xofluza 19-Feb-20 6 Lokelma 25-Jul-19 6 Mylotarg 28-Nov-19 6 Mayzent 20-Feb-20 7 Emgality 30-Jul-19 7 Xospata 23-Dec-19 7 Beovu 12-Mar-20 8 Ultomiris 28-Aug-19 8 Rinvoq 23-Dec-19 8 Piqray 11-Mar-20 9 Calquence 23-Aug-19 9 Vascepa 30-Dec-19 9 Cabenuva 18-Mar-20 Talzenna 06-Sep-19 Vocabria 18-Mar-20 10 38 Oct-Dec 19 10 Note: List contains all trade names approved by Health Canada in 2019- 2020 (1st quarter) under the submission of a NAS (New Active Substance) and Priority- NAS. Data sources: Health Canada Drug ProductDatabase 6 List of new medicines approved by Health Canada in 2019 Trade Name (medicinal ingredient) Lutathera (lutetium (177lu) oxodotreotide) Onstryv (safinamide) Symdeko (ivacaftor, tezacaftor) Vonvendi (von willebrand factor (recombinant), vonicog alfa) Rinvoq (upadacitinib) Mylotarg (gemtuzumab ozogamicin ) Aklief (trifarotene) Gallieo (gallium (68ga) chloride) Intrarosa (prasterone) Balversa (erdafitinib) Trulance (plecanatide) Talzenna (talazoparib) Ultomiris (ravulizumab) Calquence (acalabrutinib) Emgality (galcanezumab) Lokelma (sodium zirconium cyclosilicate) Nerlynx (neratinib maleate) Dacogen (decitabine) NOC Date 2019-01-09 2019-01-10 2019-06-27 2019-01-10 2019-12-23 2019-11-28 2019-11-25 2019-11-13 2019-11-06 2019-10-25 2019-10-10 2019-09-06 2019-08-28 2019-08-23 2019-07-30 2019-07-25 2019-07-16 2019-07-11 FDA Lag in Approval Date years 2018-01-26 1.0 2017-03-21 1.8 2018-02-12 1.4 2015-12-08 3.1 2019-08-16 0.4 2017-09-01 2.2 2019-10-04 0.1 2019-08-21 0.2 2016-11-16 3.0 2019-04-12 0.5 2017-01-19 2.7 2018-10-16 0.9 2018-12-21 0.7 2017-10-31 1.8 2018-09-27 0.8 2018-05-18 1.2 2017-07-17 2.0 2006-05-02 13.2 Trade Name (medicinal ingredient) Vitrakvi (larotrectinib) Esperoct (antihemophilic factor viii [recombinant, bdomain truncated], pegylated) Netspot (oxodotreotide) Zejula (niraparib) Evenity (romosozumab) Tibella (tibolone) Skyrizi (risankizumab) Libtayo (cemiplimab) Verzenio (abemaciclib) Vizimpro (dacomitinib) Lorbrena (lorlatinib) Demylocan (decitabine) Vascepa (icosapent ethyl) Xospata (gilteritinib fumarate) Onpattro (patisiran sodium) Yescarta (axicabtagene ciloleucel) Oxervate (cenegermin) Idhifa (enasidenib mesylate) NOC Date 2019-07-10 2019-07-04 2019-02-19 0.4 2019-07-03 2019-06-27 2019-06-17 2019-05-10 2019-04-17 2019-04-10 2019-04-05 2019-02-26 2019-02-22 2019-01-21 2019-12-30 2019-12-23 2019-06-07 2019-02-13 2019-02-08 2019-02-06 2016-06-01 2017-03-27 2019-04-09 Not approved 2019-04-23 2018-09-28 2017-09-28 2018-09-27 2018-11-02 2006-05-02 2012-07-26 2018-11-28 2018-08-10 2017-10-18 2018-08-22 2017-08-01 3.1 2.3 0.2 Approved by Health Canada within one year of FDA approval 39 FDA Lag in Approval Date years 2018-11-26 0.6 Note: List contains all trade names approved by Health Canada in 2019 under the submission of a NAS (New Active Substance). Data sources: FDA and Health Canada Drug Product Database 0.0 0.5 1.5 0.4 0.3 12.7 7.4 1.1 0.8 1.3 0.5 1.5