Unraveling the Path to Market in Canada: Q&A Addressing Seven Common Questions from Manufacturers

Pharmaceutical Executive’s senior editor Fran Pollaro recently connected with Charles Pirraglia, the seasoned general manager of EVERSANA’s Canadian Advisory Services team. Pirraglia has worked in the pharmaceutical industry for more than 30 years, helping pharma companies bring important therapies to Canada. Pollaro chatted with him about common questions brands face when launching into The Great White North. Pirraglia addressed seven common queries from manufacturers, offering invaluable insights into drug pricing, market entry timelines, scaling operations, pricing impacts, potential for product leakage, special access programs, and advertising rules.

Pharm Exec: How is drug pricing determined in Canada?

Charles Pirraglia: Great question and this is one of the most common questions we hear. Drug pricing in Canada is both complex and highly regulated. Pricing is centered around a federal governing body called the Patented Medicine Prices Review Board (PMPRB), which operates independently from the government and is responsible for regulating the price of patented medicines in Canada. The legislative mandate of the PMPRB is to ensure that prices are not “excessive” both at launch and throughout a product’s life cycle. This structure ideally helps to ensure better access to therapies for patients across Canada. It’s also important to note that the list price of new innovative therapies in Canada can usually be negotiated with the PMPRB in advance of a product launch, typically by providing comparative pricing data and other relevant information to justify their proposed pricing.

Charles Pirraglia, General Manager, Canadian Advisory Services, EVERSANA

Pharm Exec: How long does it take for a product to be “in market” and covered in Canada?

Charles Pirraglia: Timelines for coverage vary, depending on how it is classified for review by regulators and how the drug is paid for. But first, all drug approvals in Canada are managed by Health Canada. Depending on the type of therapy and pathway granted, the timeline for an approval can be anywhere from seven to twelve months. Once this occurs, a patient can begin to purchase the drug immediately, followed by private insurance coverage (employer-sponsored drug coverage for employees and their families) in another three to twelve months. This lucrative private payer market – out-of-pocket and private insurance coverage represents almost 60% of the total Canadian market – allows for early product commercialization. Public drug coverage is then typically secured 18-24 months after Health Canada approval and a health technology assessment (HTA) review.

Pharm Exec: What’s the best approach for manufacturers to scale their operations in Canada when looking to launch a product?

Charles Pirraglia: Companies looking to launch their first product in Canada commonly come to us and ask how best to set up their in-market operations that provide the most optimal scalability across Canada. Like entering any foreign market, there are local nuances and best practices that need to be understood and factored into a solid market blueprint and business plan. By understanding these unique factors, manufacturers can ensure alignment of all the critical pre-launch and launch activities, as well as alignment of the OPEX expenditures to forecasted revenues. Depending on the pipeline and launch timing, outsourcing core functions versus building in-house capabilities may also be the preferred approach to maximizing outcomes, while minimizing expenses and headcount. No two approaches are the same, and that’s why it is so critical for companies to understand what launching in Canada may look like. Getting therapies into Quebec may require different strategies than if you also want to expand access into British Columbia or Nova Scotia. Having a local partner can really help expedite the process.

Pharm Exec: Does launching into Canada impact US pricing for a product?

Charles Pirraglia: The vast majority of drugs that “launch” in Canada are first brought to market in the U.S., given the size of the patient population. Often brands assume that coming to Canada may impact the price of the drug in the U.S. The fact is that no, branded drug prices in the US are not impacted by Canadian drug pricing. The only Organization for Economic Cooperation and Development (OECD) countries known to reference Canadian drug prices are Brazil, New Zealand, South Africa, South Korea and Taiwan.

Pharm Exec: What’s the best approach for manufacturers to scale their operations in Canada when looking to launch a product?

Charles Pirraglia: Companies looking to launch their first product in Canada commonly come to us and ask how best to set up their in-market operations that provide the most optimal scalability across Canada. Like entering any foreign market, there are local nuances and best practices that need to be understood and factored into a solid market blueprint and business plan. By understanding these unique factors, manufacturers can ensure alignment of all the critical pre-launch and launch activities, as well as alignment of the OPEX expenditures to forecasted revenues. Depending on the pipeline and launch timing, outsourcing core functions versus building in-house capabilities may also be the preferred approach to maximizing outcomes, while minimizing expenses and headcount. No two approaches are the same, and that’s why it is so critical for companies to understand what launching in Canada may look like. Getting therapies into Quebec may require different strategies than if you also want to expand access into British Columbia or Nova Scotia. Having a local partner can really help expedite the process.

Pharm Exec: Does launching into Canada impact US pricing for a product?

Charles Pirraglia: The vast majority of drugs that “launch” in Canada are first brought to market in the U.S., given the size of the patient population. Often brands assume that coming to Canada may impact the price of the drug in the U.S. The fact is that no, branded drug prices in the US are not impacted by Canadian drug pricing. The only Organization for Economic Cooperation and Development (OECD) countries known to reference Canadian drug prices are Brazil, New Zealand, South Africa, South Korea and Taiwan.

Pharm Exec: Is there a risk of “product leakage” across the Canada-US border once a product is launched in Canada?

Charles Pirraglia: This is also a really common question we get, especially with the relatively open borders between the U.S. and Canada allowing for ease of travel. And while it’s a great question, the concern is generally unwarranted as controlled distribution/supply chain management can prevent products from traversing the U.S.-Canadian border. Additionally, higher-priced specialty products are often managed through named patient delivery, which serves to eliminate the potential for cross-border diversion.

Pharm Exec: What is the Canadian Special Access Program (SAP) and how does it work?

Charles Pirraglia: The Canadian Special Access Program, or SAP, is designed to allow healthcare professionals to request access to a medication that is not currently approved for sale in Canada to treat patients with serious or life-threatening conditions. Access to these drugs is only considered when already approved therapies have failed, are unsuitable or are unavailable.

Access to SAP requires authorization, which if approved, allows a manufacturer to sell that non-approved drug for use by the prescribed patients. The program is specifically not to be used to promote or encourage the early use of drugs, conduct research or avoid the Canadian clinical trial/drug review processes. However, it’s an important program and brands should be aware that it exists. It provides a vital service to Canadian patients in need.

Pharm Exec: Finally, is direct-to-consumer (DTC) advertising of innovative drugs allowed in Canada?

Charles Pirraglia: Under federal legislation, direct-to-consumer ads for prescription drugs are prohibited in Canada. However, unlike across the European Union and other regions, there are two “informational” exceptions. The first is called a reminder ad, in which the messaging is limited to the name, price and quantity of the prescription drug. In this case, the advertisement simply cannot reference the disease state or indication. The second exception for DTC advertising is to help inform “help-seeking messages,” where the disease state can be discussed, but no reference to any prescription drug product may be made. Depending on the life cycle of the brand and the disease area, both approaches can be used as an effective commercial tool.

Navigating these nuances and what is and what is not within the requisite Canadian laws, regulations and guidelines requires local expertise. Brands that understand this can find ways to leverage DTC to reach patient populations across Canada.