Health Technology Assessment Process for Oncology Drugs: Impact of CADTH Changes on Public Payer Reimbursement Recommendations

Abstract

Public reimbursement systems face the challenge of balancing provision of needed treatments and the reality of limited resources. Canada has a complex system for drug approval and public reimbursement, with jurisdiction divided between the federal government and the provinces/territories. A pivotal role is that of health technology assessment (HTA), which relies primarily on health economic principles to analyze the value of drugs on a population health basis and make recommendations about public reimbursement. The Canadian Agency for Drugs and Technologies in Health (CADTH) provides recommendations to all provinces but Quebec. This article provides an overview of Canada’s approval and public reimbursement pathway, including the role of HTA and the economic principles on which it relies. Starting in late 2020, CADTH reduced the cost per quality-adjusted life year (QALY) threshold, the metric relied upon in making recommendations to public payers. An analysis of all 56 oncology drug final recommendations issued from January 2020 to January 2022 was conducted and confirms this reduction in the cost per QALY threshold. As a result of this threshold reduction, recommendations to the provinces include, in a number of cases, substantially greater price reductions. The potential implications for successful price negotiation with the pan-Canadian Pharmaceutical Alliance (pCPA), the public negotiating body for the provinces, are discussed.