The impact of willingness-to-pay threshold on price reduction recommendations for oncology drugs: a review of assessments conducted by the Canadian Agency for Drugs and Technologies in Health

Abstract

Since late 2020, the Canadian Agency of Drugs and Technologies in Health (CADTH) has been using a threshold of $50,000 (CAD) per quality-adjusted life-year (QALY) for both oncology and non-oncology drugs. When used for oncology products, this threshold is hypothesized to have a higher impact on the time to access these drugs in Canada. We studied the impact of price reductions on time to engagement and negotiation with the pan-Canadian Pharmaceutical Alliance for oncology drugs reviewed by CADTH between January 2020 and December 2022. Overall, 103 assessments reported data on price reductions recommended by CADTH to meet the cost–effectiveness threshold for reimbursement. Of these assessments, 57% (59/103) recommendations included a price reduction of greater than 70% off the list price. Eight percent (8/103) were not cost-effective even at a 100% price reduction. Of the 47 assessments that had a clear benefit, in 21 (45%) CADTH recommended a price reduction of at least 70%. The median time to price negotiation (not including time to engagement) for assessments that received at least 70% vs >70% price reduction was 2.6 vs 4.8 months. This study showed that there is a divergence between drug sponsor's incremental cost–effectiveness ratio (ICER) and CADTH revised ICER leading to a price reduction to meet the $50,000/QALY threshold. For the submissions with clear clinical benefit the median length of engagement (2.5 vs 3.3 months) and median length of negotiation (3.1 vs 3.6 months) were slightly shorter compared with the submissions where uncertainties were noted in the clinical benefit according to CADTH. This study shows that using a $50,000 per QALY threshold for oncology products potentially impacts timely access to life saving medications.

Timeliness of Health Technology Assessments and Price Negotiations for Oncology Drugs in Canada

“…Since late 2020, CADTH reviews of oncology medicines have regularly included a recommendation for a specific percentage price reduction to achieve a $50,000 per QALY threshold. 34 Eighty-eight reviews in this analysis had this type of recommendation. The median negotiation time for the 55 reviews (62.5%) with a recommendation for a price reduction of 70% or more was 145 days (inter-quartile range: 100–213 days), whereas the median for the 33 reviews (37.5%) with a lower price reduction recommendation was 78 days (inter-quartile range: 11–133 days) (p=0.0009).…”