Evolution of Drug Reimbursement in Canada: The Pan-Canadian Pharmaceutical Alliance for New Drugs

Canada has a unique system of public drug coverage and reimbursement characterized by a centralized review agency that makes funding recommendations along with decentralized authority for delivering health care across 10 provinces and three territories. There has been a significant increase in price negotiation for new pharmaceuticals in the past 10 years, first by individual provinces and now through a collective price negotiation process called the “Pan-Canadian Pharmaceutical Alliance.” As of February 2014, the Pan-Canadian Pharmaceutical Alliance has already completed 32 negotiations despite still being in a formative stage; it is anticipated that a formal process will be developed in the coming year. In this article, we describe the evolution of price negotiation in Canada and identify several opportunities for improvement of the current process, including the incorporation of economic considerations into price negotiation.