Canadian policy makers’ views on pharmaceutical reimbursement contracts involving confidential discounts from drug manufacturers

Abstract

Pharmaceutical policy makers are increasingly negotiating reimbursement contracts that include confidential price terms that may be affected by drug utilization volumes, patterns, or outcomes. Though such contracts may offer a variety of benefits, including the ability to tie payment to the actual performance of a product, they may also create potential policy challenges. Through telephone interviews about this type of contract, we studied the views of officials in nine of ten Canadian provinces. Use of reimbursement contracts involving confidential discounts is new in Canada and ideas about power and equity emerged as cross-cutting themes in our interviews. Though confidential rebates can lower prices and thereby increase coverage of new medicines, several policy makers felt they had little power in the decision to negotiate rebates. Study participants explained that the recent rise in the use of rebates had been driven by manufacturers' pricing tactics and precedent set by other jurisdictions. Several policy makers expressed concerns that confidential rebates could result in inter-jurisdictional inequities in drug pricing and coverage. Policy makers also noted un-insured and under-insured patients must pay inflated "list prices" even if rebates are negotiated by drug plans. The establishment of policies for disciplined negotiations, inter-jurisdictional cooperation, and provision of drug coverage for all citizens are potential solutions to the challenges created by this new pharmaceutical pricing paradigm.