Analyzing Drug Shortages and Pricing: Lessons from Canada
Podium presentation given by Étienne Gaudette at ISPOR 2024, May 7, 2024
Étienne Gaudette, Mina Tadrous, Shirin Rizzardo and Kevin Pothier
Conflict of interest statement and disclaimer
S. Rizzardo, K.R. Pothier and myself are employees of the Patented Medicine Prices Review Board (PMPRB), an independent quasi-judicial agency of the Federal Government of Canada. The views expressed today are mine alone and do not represent official views of the PMPRB and the Government of Canada.
M. Tadrous has received consulting fees from Health Canada, CADTH and Green Shield Canada.
The results shown in this presentation are preliminary and conclusions may differ in future versions and publications.
Introduction
Context
- Well-documented that shortages are more prevalent in low-priced drugs (typically older generics)
- Role of prices, if any, is unclear from an empirical perspective
Objectives
- Investigate associations between international prices and shortages
- Answer the question: “Were Canadian shortages associated with lower prices than in other countries from FY2017 to FY2022?”
Hypothesis to test
- Higher prices could lead to lower shortage rates in two ways:
- Long-term global effect: higher profitability creates an incentive for manufacturers to invest to strengthen the supply chain
- Short-term national effect: manufacturers could favor countries with higher prices when there are production disruptions, leading to shortages in countries with lower prices
- This study investigates the second link using foreign-to-Canadian (FTC) price ratios:
- FTC of medicine X = Price of medicine XGermany/ Price of medicine X Canada
- If lower Canadian prices were associated with more shortages, we should find a positive and significant correlation between FTCs and shortages
Methods
Data and approach
Data
- International prices and drug characteristics were extracted from IQVIA MIDAS®
- Canada’s PMPRB11 comparator countries: SWE, AUS, NLD, BEL, ESP, DEU, GBR, NOR, ITA, FRA, JPN
- USA
- Data were matched with drug shortages data from www.drugshortagescanada.ca
- Mandatory industry self-reports
- Oral solid prescription drugs defined at the ingredient-strength-form-manufacturer level
- Fiscal years (April to March) 2017 to 2022
- N = 12,097 drug-year observations with price comparisons included
Approach
- Conduct multivariate fixed-effect logistic regression at the drug-year level
- Dependent variable: drug reported in « actual shortage » during the year in Canada
- Determine whether FTCs are significantly associated with shortages
Results
Unadjusted shortage rates vs. foreign-to-Canadian price ratio (FTC)
Figure - Text version
Foreign-to-Canadian price ratio (FTC) | Number (N) | Unadjusted shortage rate |
---|---|---|
Less than 0.5 | 4,296 | 29% |
0.5 to 0.7 | 2,162 | 28% |
0.7 to 0.9 | 2,038 | 24% |
0.9 to 1.1 | 1,377 | 21% |
1.1 to 1.3 | 688 | 30% |
1.3 to 1.5 | 429 | 34% |
More than 1.5 | 1,233 | 36% |
Foreign-to-Canadian price ratio (FTC) less than 1 means the Canadian price is higher than foreign prices.
Foreign-to-Canadian price ratio (FTC) more than 1 means that the Canadian price is lower than foreign prices.
Sample characteristics by foreign-to-Canadian price ratio (FTC)
FTC < 0.9 |
0.9 ≤ FTC ≤1.1 |
FTC > 1 .1 |
|
Generic, % |
52% |
46% |
74% |
Canadian manufacturers selling the ingredient, n (SD) |
8.7 (6.4) |
6.4 (6.4) |
9.0 (6.2) |
Canadian market size, USD Millions (SD) |
10.3 (33.0) |
12.6 (33.8) |
8.1 (23.2) |
Countries with sales, n (SD) |
5.1 (3.4) |
6.2 (3.4) |
4.4 (2.9) |
Adjusted odds ratios and significance tests
N | % in shortage | OR | 95% CI | ||
---|---|---|---|---|---|
FTC bin | |||||
< 0.5 | 4,296 | 29% | 1.06 | 0.90 | 1.25 |
0.5 - 0.7 | 2,161 | 28% | 1.13 | 0.95 | 1.35 |
0.7 - 0.9 | 2,038 | 24% | 1.16 | 0.96 | 1.39 |
0.9 - 1.1 | 1,377 | 21% | 1 | [Reference] | |
1.1 - 1.3 | 688 | 30% | 1.24 | 0.98 | 1.56 |
1.3 - 1.5 | 429 | 34% | 1.26 | 0.97 | 1.64 |
> 1.5** | 1,233 | 36% | 1.32 | 1.09 | 1.60 |
Generic status | |||||
Brand | 5,292 | 11% | 1 | [Reference] | |
Generic | 6,805 | 41% | 3.419 | 3.02 | 3.88 |
Year | |||||
2017 | 2,193 | 24% | 1 | [Reference] | |
2018 | 2,156 | 30% | 1.38 | 1.19 | 1.60 |
2019 | 2,049 | 28% | 1.26 | 1.09 | 1.47 |
2020 | 1,987 | 32% | 1.61 | 1.39 | 1.87 |
2021 | 1,922 | 25% | 1.12 | 0.96 | 1.31 |
2022 | 1,915 | 29% | 1.46 | 1.25 | 1.70 |
Market size | |||||
Less than USD 125K | 1,902 | 22% | 1 | [Reference] | |
USD 125K - 825K | 2,750 | 20% | 1.07 | 0.92 | 1.25 |
USD 825K - 4.25M | 3,471 | 28% | 1.60 | 1.39 | 1.84 |
More than USD 4.25M | 4,099 | 36% | 2.59 | 2.26 | 2.97 |
PMPRB11 countries with sales | |||||
1 | 2,660 | 40% | 1 | [Reference] | |
2-5 | 4,024 | 32% | 0.86 | 0.77 | 0.96 |
6+ | 5,538 | 20% | 0.66 | 0.59 | 0.74 |
Single-source generic in Canada | |||||
No | 11,896 | 28% | 1 | [Reference] | |
Yes | 326 | 19% | 3.022 | 1.04 | 8.79 |
Manufacturers | |||||
1 | 2,332 | 8% | 0.28 | 0.10 | 0.78 |
2-5 | 4,541 | 36% | 0.96 | 0.85 | 1.08 |
6-10 | 2,884 | 25% | 1.13 | 1.01 | 1.27 |
11+ | 2,465 | 36% | 1 | [Reference] | |
Int'l generic availability | |||||
No | 2,097 | 6% | 1.26 | 0.46 | 3.45 |
Yes | 10,125 | 33% | 1 | [Reference] | |
12 therapeutic classes (ATC1) omitted from the table |
Chi-square | p | |
---|---|---|
**FTC bin |
12.6 |
0.0495 |
Generic status |
370.1 |
<.0001 |
Therapeutic class (ATC1) |
126.9 |
<.0001 |
Year |
52.1 |
<.0001 |
Market size |
287.5 |
<.0001 |
Countries with sales |
49.7 |
<.0001 |
Single source status |
4.1 |
0.042 |
Manufacturers |
13.3 |
0.004 |
Int'l generic status |
0.2 |
0.652 |
- A drug priced 50% higher in comparator countries than in Canada (FTC > 1.5) had an odds ratio of 1.32 of being in shortage in a given year relative to a drug for which the Canadian price was close to the international median (FTC between 0.9 and 1.1)
- A significance test for the FTC variable as a whole found it to be statistically significant (p=0.0495)
Predicted probability of shortage vs FTC: case studies
Figure - Text version
Metformin (Leading manufacturer, 500mg tab) | Sofosbuvir:velpatasvir (Originator, 400mg+100mg tab) | |||||
---|---|---|---|---|---|---|
Foreign-to-Canadian price ratio (FTC) | 95% Confidence interval lower limit | Point estimate | 95% Confidence interval upper limit | 95% Confidence interval lower limit | Point estimate | 95% Confidence interval upper limit |
Less than 0.5 | 44% | 49% | 54% | 5% | 7% | 9% |
0.5 to 0.7 | 45% | 50% | 56% | 6% | 7% | 9% |
0.7 to 0.9 | 45% | 51% | 57% | 6% | 7% | 10% |
0.9 to 1.1 | 41% | 47% | 53% | 5% | 6% | 9% |
1.1 to 1.3 | 46% | 53% | 59% | 6% | 8% | 11% |
1.3 to 1.5 | 46% | 53% | 60% | 6% | 8% | 11% |
More than 1.5 | 48% | 54% | 60% | 6% | 8% | 11% |
Foreign-to-Canadian price ratio (FTC) less than 1 means the Canadian price is higher than foreign prices.
Foreign-to-Canadian price ratio (FTC) more than 1 means that the Canadian price is lower than foreign prices.
Only patented medicines (no intl. generics available)
N | % in shortage | OR | 95% CI | ||
---|---|---|---|---|---|
FTC bin | |||||
< 0.8** | 881 | 9% | 1.75 | 1.09 | 2.82 |
0.8 - 1.2 | 903 | 3% | 1 | [Reference] | |
> 1.2** | 192 | 4% | 1.09 | 0.48 | 2.46 |
Year | |||||
2017 | 356 | 4% | 1 | [Reference] | |
2018 | 338 | 6% | 1.95 | 0.94 | 4.06 |
2019 | 324 | 6% | 2.06 | 0.99 | 4.29 |
2020 | 325 | 7% | 2.25 | 1.09 | 4.64 |
2021 | 319 | 6% | 1.92 | 0.91 | 4.07 |
2022 | 314 | 5% | 1.55 | 0.71 | 3.38 |
Market size | |||||
Less than USD 125K | 237 | 6% | 1 | [Reference] | |
USD 125K - 825K | 388 | 6% | 0.91 | 0.45 | 1.83 |
USD 825K - 4.25M | 542 | 6% | 1.24 | 0.64 | 2.44 |
More than USD 4.25M | 809 | 5% | 1.09 | 0.55 | 2.15 |
PMPRB11 countries with sales | |||||
1 | 141 | 19% | 1 | [Reference] | |
2-5 | 403 | 9% | 0.41 | 0.23 | 0.73 |
6+ | 1,432 | 3% | 0.17 | 0.10 | 0.29 |
6 therapeutic classes (ATC1) omitted from the table |
Chi-square | p | |
---|---|---|
**FTC bin |
5.9 |
0.053 |
Therapeutic class (ATC1) |
26.7 |
0.000 |
Year |
5.9 |
0.318 |
Countries with sales |
39.9 |
<.0001 |
Int'l generic status |
1.2 |
0.748 |
- A patented drug priced higher in Canada than in comparator countries (FTC < 0.8) had greater odds of being in shortage in a given year than one for which the Canadian price was close to the international median (FTC between 0.8 and 1.2)
- A significance test for the FTC variable as a whole did not find it to be statistically significant (p=0.0528)
Discussion
- The overall evidence does not show a strong relationship between drug prices and shortages
- Does not support the hypothesis of higher drug prices decreasing the probability of a drug being in shortage
- The analysis is still preliminary. Next steps:
- Conduct regressions with US prices
- Add variables to the specification (drug age, flags for top manufacturers)
- Add a year of data
- Key limitation: the analysis is observational
- Causal methods should be used when feasible, but would require natural experiment
- List prices were used to compute FTCs
Appendix: Data retention and analytic sample
Figure - Text version
- 33,386
Canadian OS Rx-year observations in IQVIA MIDAS data- 31,956
Obs. for which a Drug Identification Number (DIN) was identified- 12,256
Obs. with multilateral price comparisons - 19,700
Obs. without price comparisons
- 12,256
- 1,430
Obs. with no DIN identified
- 31,956
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