Value of Innovation: Carole Watson, Janssen

The Value of Innovation in Canada

Carole Watson, Director, Strategic Pricing, Janssen Inc.

Canadian Expert Patients in Health Technology Conference Canadian Organization for Rare Disorders November 7-8, Toronto.

Chris Halyk President, Janssen Inc.

Canadian Expert Patients in Health Technology Conference Canadian Organization for Rare Disorders

November 7-8, Toronto.

Artwork by Sebastian Ferreira Janssen is proud to feature artwork created by people affected

by the illnesses and diseases we are committed to treating and preventing.

Dr. Paul Janssen

“There are still many diseases for which there is no cure, and effective medicines must be found.

Although we have contributed to the solutions for some of these problems, we will continue our research efforts, because so much more needs to be done.”



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Some Believe…

“Our healthcare system is not sustainable because of the

cost of drugs.”

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Medicines are responsible for the increased costs of healthcare

Myth:



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Innovative medicines make up just over 6% of healthcare spending in Canada

Source: Canadian Health Policy Institute, Spending on Patented Drugs in Canada 1990-2014, February 23, 2016



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In 15 years drug costs grew 0.5%, while all other healthcare spending grew 13%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Health Spending per capita in Canada (Public & Private)

Hospitals, Institutions, Capital

Physicians, Professionals

Public Health, Administration, Health Research, Other

Patented Drugs

Source: Canadian Health Policy Institute, Spending on Patented Drugs in Canada , 1990-2014, February 23, 2016;

7 Canadian Expert Patients in Health Technology Conference

Canadian Organization for Rare Disorders November 7-8, Toronto.

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Pharmaceutical companies are free to charge whatever they want

Myth:



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Canada has robust systems for assessing price and reimbursement

Health Canada Patented Medicine Prices Review Board

HTA (CDR, INESSS, pCODR)

Pan Canadian Pharmaceutical Alliance (pCPA)

Private Insurer Assessments

Provincial Payer Listings (PLAs)

“Drugwatch” type programs

Price and value hurdles between innovation and patients in Canada



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§  Patients are always at the center

§  Broad understanding of value – to patients, healthcare system, society

§  Access for patients today

§  Incentive for investment in biomedical innovation to transform the lives of patients tomorrow

Medicines are priced to ensure patient access today – and tomorrow



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Developing innovative medicines is a long, expensive, and risky process

Source: DiMasi et al 2016. Innovation in the pharmaceutical industry: New estimates of R&D costs. J Health Econ. 47: 20-33.



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Innovative medicines are simply a cost to the healthcare system and do not provide substantial value

Myth:



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Medicines help Canadians have longer, healthier, more productive lives

73% of the improvement in life expectancy is estimated to be due to medicines over this decade

2 of 3 people diagnosed with cancer today survive 5 years, compared to 1 in 3 in 1964

A 20-year-old diagnosed with HIV today can expect to live into his or her 70’s

Life expectancy: Lichtenberg, F. R., 2014. Health Policy and Technology 3, pp. 36-58. Cancer: National Cancer Institute website. Available at: http://seer.cancer.gov/csr/1975_2012/browse_csr.php HIV: Samji, H. et al., 2012. PLOS ONE, 8(12), p. e81355.

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Canadian Organization for Rare Disorders November 7-8, Toronto.

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Hepatitis C is curable

Medicines help Canadians have longer, healthier, more productive lives and decrease healthcare spending

Sources: PhRMA, 2014. http://www.phrma.org/sites/default/files/pdf/Hep-C-Report-2014-Stepping-Stones.pdf Lichtenberg FR. Benefits and costs of newer drugs: An Update. National Bureau of Economic Research (NBER), Working Paper no. 8996, 2002. http://www.myelomabeacon.com/news/2013/11/01/multiple-myeloma-survival-significantly-increases-last-decade/ http://www.myelomacanada.ca/docs/recent%20increase%20in%20survival%20110207.pdf

For every $1 spent on innovative medicines, non-medicine spending drops by $7



Patients treated for the blood cancer Multiple Myeloma have shown a 32% increase in Survival – from 2000 to 2010.

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Threats to the Value of Medicines within our Healthcare System

Cost-Containment Focus Ignoring the Value of Innovative Medicines

Therapeutic Substitution Non-Medical Switching

Restricted Patient and HCP Choice

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leading to…



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Focus on cost-containment



PMPRB reform | pCPA | Na1onal Pharmacare |Private payers | SEB first principles

How to balance today’s budgets with support for future innovation?

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Federal Innovation Agenda •  Federal Ministry of Innovation, Science and Economic Development (ISED)

has defined a new vision to build Canada as a centre of global innovation

•  $800 million in funding starting in 2017-18

•  Three areas vital to Canadian innovation: 1.  Clean tech 2.  Life Sciences 3.  IT

Life Sciences Question: Are provincial Ministries of Health aligned with ensuring timely access and health system adoption of innovative technologies to improve health outcomes for Canadians?



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So What Do We Need To Do?

u  Focus on our shared priorities

u  Ensure short-term decisions do not have long-term negative impacts

u  Collaboration is key – a partnership for better patient outcomes and healthcare sustainability

u  We encourage everyone to be informed on the value of innovation and make your voices heard



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The Value of Medicines in Canada

Carole Watson, Director, Strategic Pricing, Janssen Inc.

Canadian Expert Patients in Health Technology Conference Canadian Organization for Rare Disorders November 7-8, Toronto.

Value of Innovation: Carole Watson, Janssen

Healthcare

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