Global Health Technology Assessment Road Maps

Canada - Medical Devices & Diagnostics

Updated: February 2014
Validated by: Canadian Agency for Drugs and Technologies in Health (CADTH)
 

Greece Map

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BACKGROUND

Canada has a population of 35 million citizens spread over a large geographic region that is divided into 10 provinces and 3 territories of varying size (1). It is estimated that Canada spent CAD 211 billion on health care in 2013, representing 11.2% of its gross domestic product (2). The amount spent on medical devices and diagnostics is not systematically tracked although there are estimates of roughly 3% spent on medical devices and diagnostics yearly (3). Responsibility for health care delivery resides in each province and territory and is funded through a combination of provincial and federal government general revenue, and specific income-associated health taxes.

The Canada Health Act (CHA) is Canada’s federal legislation for publicly funded health care insurance. This legislation, in existence since 1984, outlines key conditions and criterion that must be met for provinces and territories to receive federal cash contributions towards health care services offered within their jurisdictions.

The aim of the CHA is to ensure that all eligible residents of Canada have reasonable access to necessary health services (services provided by physicians or in hospitals, as well as dental surgery and diagnostic tests).  Furthermore, the CHA mandates that health insurance be administered by a public authority, reasonably comprehensive, non-exclusive (universal), portable across provinces, and allow for equity of access.

Health services for the mass population are covered primarily under provincial and territorial health care plans. Federal health plans also exist for special populations including the military, veterans, federal inmates, and Canada's First Nations and Inuit. Non-insured health services such as outpatient drugs, dentistry, and paramedical services may be covered through private insurance plans or out-of-pocket by individuals. Federal health programs also cover some of these non-insured services for their clients. Canada's health system is 100% funded domestically with approximately 30% of expenditure incurred out-of-pocket or through private insurance plans (2).

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Decision Makers and Decision-Making Processes Diagram

Decision Making Processes


Model description and Symbols:

Boxes: Decision-making bodies.
Circles: Data requirements, tools, etc. which impact process.
Broken Arrows: May or may not impact decision.

Figure adapted from Arshoff L. Who Pays: Institutional Funding & Decision Models. Toronto, ON; 2008 (4)

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DECISION MAKERS AND INFLUENCERS

Medical Devices Bureau (MDB), Therapeutic Products Directorate (TPD), Health Canada
Canada’s Medical Devices Bureau is located within the Federal Ministry of Health (Health Canada) at the Therapeutic Products Directorate (TPD). The TPD is Canada’s federal authority that regulates pharmaceuticals and medical devices for human use. The Medical Devices Bureau is responsible for reviewing applications to market new medical devices as well as developing and enforcing standards.

Regional Health Authorities and Hospital Administrators
Canada has roughly 1,100 hospitals (depending on the definition) located in over 80 health regions who are provided a global budget by provincial health ministries and are responsible for regional and local reimbursement decisions regarding new medical technologies. Regional health authorities and hospitals account for approximately 70% of medical device reimbursement in Canada (5).  Almost all of Canada's hospitals are owned and operated as local non-profit organizations. Teaching hospitals, which tend to purchase more expensive medical devices, are more likely to have hospital-based HTA programs, with a notable concentration in the province of Quebec due to legislation requiring them.  Decisions regarding medical device and diagnostic purchases outside the jurisdiction of acute care hospitals (e.g., prosthetics, orthotics, diabetes supplies, and ostomy supplies) usually fall on specialized provincial programs, private insurers, or are paid for by individual consumers.

Provincial Ministries and Specialty Programs
Each provincial government has established a department or ministry that sets policy, legislation and standards for an individual province while also allocating funding to hospitals regions or health-related provincial programs. Funding may be allocated to a single provincial health system, or more commonly to individual regions or hospitals within the province. Ministries may have a limited impact on technology reimbursement decisions within acute care hospitals or regions unless there are requests to provide additional resources for a new technology. Ministries are more influential when technology reimbursement decisions fall under ministry-led specialty programs. Several examples of these programs are below:

  • Assistive Devices Program, run by the Ontario Ministry of Health and Long-Term Care, provides coverage for equipment and supplies for people with long-term physical disabilities.
  • Alberta Aids to Daily Living Program, run by Alberta Health, provides financial assistance for the purchase of medical equipment and supplies for people with long-term disability, chronic, or terminal illness.
  • British Columbia PharmaCare Prosthetic and Orthotic Program, run by the British Columbia Ministry of Health, provides pre-approved prostheses and orthoses for eligible recipients who require these to maintain functionality.

Federal Programs and Health Canada
Health Canada is Canada’s Federal Ministry of Health. It acts as a regulator for the introduction of new technology and is responsible for administrating the Canada Health Act.   Health Canada is only directly responsible for reimbursement and purchasing decisions for specialized programs that it administers, such as for First Nations and Inuit populations. There are also other federal departments and programs responsible for reimbursement decisions in specialty populations. These include the Department of National Defence (Canadian Forces Health Services Group), Correctional Services Canada (Health Services), and Veterans Affairs Canada (Health Care Benefits).

Private Insurers and Individual Payers
The Canada Health Act does not compel provinces to provide coverage for some services, specifically those that occur outside of acute care facilities such as dental care, vision care, physiotherapy, and long-term care. In the absence of ministry-led programs to cover these services, medical technology reimbursement decisions associated with these services may fall on private insurers, who fund approximately 12% of non-publicly-insured services (2). Individual payers also pay for a similar amount of health services out-of-pocket. A list of all health insurance companies in Canada can be accessed at www.clhia.ca.

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DECISION-MAKING PROCESS

Medical devices for human use in Canada are regulated by the Medical Devices Bureau (MDB) of Health Canada’s Therapeutic Products Directorate (TPD) under the authority of Medical Device Regulations, in accordance with federal legislation, the Food and Drugs Act. The Act and regulations are accessible in English and French at the links below: 

Food and Drugs Act: http://laws-lois.justice.gc.ca/eng/regulations/C.R.C.,_c._870/index.html

Medical Device Regulations: http://laws-lois.justice.gc.ca/eng/regulations/SOR-98-282/index.html

Medical devices have a broad definition that includes any item sold to diagnose, treat, mitigate, or prevent a “disease, disorder, or abnormal physical state, or its symptoms,” including contraceptive devices. Medical Device Regulations apply specifically for those designed for human use.

Medical devices are regulated according to a risk-based classification system, generally according to the degree of invasiveness. (See Table 1) Under this classification scheme, Class I devices represent low-risk items, while Class II – IV represent higher-risk devices. Factors also considered are risk to patients from failure, duration of contact, and whether the device emits or controls (e.g., software) the emission of ionizing radiation.  In vitro diagnostic tests are also regulated under this system, and generally are considered Class II devices.  However, they may also fall into higher-risk classes according to the degree to which accuracy of test results may affect human health.

Manufacturers of Class I devices must apply for a Medical Device Establishment License (MDEL).  Manufacturers of Class II, III, or IV medical devices must apply for a Medical Device License (MDL).  All distributors and importers must apply for a MDEL. Information requirements vary according to the product Class. The application is then reviewed according to requirements of the Medical Devices Regulations. If a negative decision is reached, companies have an opportunity to appeal or provide further information. Positive reviews result in an issued license. The timing of the review depends on the medical device class with Class II, III, and IV license applications having a 15-, 75-, and 90-day target to complete, respectively. A recent Federal Auditor’s report reveals these targets are only met roughly 50% of the time (6). Evidence of effectiveness from clinical studies are only required for Class IV products.

Manufacturers of Class II, III, & IV medical devices are required to implement a quality system compliant with ISO 13485:2003 (Health Canada does not require ISO 13485 for Class I).  The ISO 13485 quality system must be audited by a Registrar accredited under the Canadian Medical Device Conformity Assessment Scheme (CMDCAS). (http://www.hc-sc.gc.ca/dhp-mps/md-im/qualsys/index-eng.php ) To remain active, a medical device license must be renewed yearly through payment of an annual fee to Health Canada.  (Note: Health Canada does not have a similar process to the FDA 510K.)

Table 1 Regulatory Requirement in Canada for Medical Devices by Classification

Device Class

Level of Risk

Examples

Quality Management System

License Requirements

I

Low

Bandage
Toothbrushes
Laboratory Culture Media

No

No product license. Establishment license not required if imported by someone with establishment license.

II

Medium

Contact lens
Condom
Tampon
Surgical gloves
Magnetic resonance imaging equipment

Yes
(National Standard of Canada CAN/CSA-ISO 13488:2003)

Product license with increasing evidentiary requirements for higher risk classes. Annual license renewals required.

III

High

Genetic tests
Home glucose test kit
Hip replacement implant
Mammography
Ultrasound for pregnancy detection

Yes
(National Standard of Canada CAN/CSA-ISO 13485:2003)

IV

Very High

HIV test kit
Implantable defibrillator
Breast implants
Carotid stent

Yes
(National Standard of Canada CAN/CSA-ISO 13485:2003)

 

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REIMBURSEMENT AND PRICING APPROVAL PROCESS

Decisions to reimburse medical devices in Canada are highly de-centralized. The vast majority of decisions are made by hospitals, who typically receive global funding for providing services. In most provinces, budgets are allocated to hospitals through a geographic or operational health region or authority, and bound by provincial legislation. In this scheme, hospitals are separate legal not-for-profit entities that administrate service through their centres and associated facilities.

The use of Health Technology Assessments (HTA) within hospitals and health regions across Canada varies widely. For example, there are no hospital-based HTA units in Saskatchewan or Newfoundland, whereas provincial legislation in Quebec requires all teaching hospitals have an HTA body. Typically, decisions to fund a new technology are made by hospital administrators without a formal HTA process to support decision making.  Hospitals may seek advice or a formal assessment from the province.

In the four most populated provinces (British Columbia, Alberta, Ontario, and Quebec – where approximately 86% of Canadians live) province-wide HTA processes have been developed for new or existing technology. Decisions to participate or adhere to recommendations from province-wide review by hospitals and administrators may still be voluntary depending on the province. Typically, technologies with substantial budgetary pressure or clinical uncertainty will be identified for review or recommendation. There are no national recommendatory processes for medical devices or technologies in Canada. The Canadian Agency for Drugs and Technologies in Health (CADTH) acts as an information resource to all provinces except Ontario and Quebec, who do not pay for this service, giving decision makers information to inform individual decisions on request. They also provide information to federal programs.

Once reimbursement decisions are made, shared delivery or group purchasing arrangements for health technologies may be implemented. Intending to leverage buying power, group purchasing arrangements are increasingly common among hospitals, regions, and provinces. Since 2009, three provinces: Alberta, British Columbia, and New Brunswick have signed contracts with privately owned Group Purchasing Organizations (GPOs) for services to supplement shared purchasing activities. The GPO facilitates by consolidating back office functions that include procurement, information technology, and financial functions on a regional or provincial level. Similar organizations, Shared Service Organizations (SSOs), provide pooled services and are organized within hospital groups.

Regional or National consensus by physicians through existing professional networks can be a strong influence on decisions to reimburse technology. In almost all cases, specialty physicians (e.g., surgeons, interventional cardiologists, emergency doctors) are not paid or affected by hospital budgets, but rather by provinces through a provincial fee-for-service arrangement. Some specialties are more typically salaried (e.g., pathologists) although alternative funding arrangements for other physician specialists are seeing a slow rise. An inventory of Canadian Clinical Practice Guidelines is maintained by the Canadian Medical Association http://www.cma.ca/cpgs/. A list of guideline developers can be found here http://www.cma.ca/index.php?ci_id=54297&la_id=1.

DATA REQUIREMENTS (HTA, PAYMENT DECISIONS)

Information about a technology can be supplied by the manufacturer, but there are no formal application processes on either a local or province-wide basis that make it mandatory. Typically, a process of review is initiated when a physician requests a new technology. Information requirements vary by hospital but typically consider: 1) local need; 2) evidence of positive clinical consensus regarding the procedure; 3) supplier information; 4) feasibility of implementation; and 5) budget impact (price and utilization). Occasionally, a hospital may consider total health system costs.

Like hospital-based processes, province-wide HTA processes do not involve formal application processes from the manufacturer. Rather, technologies may be identified by the province through regular environmental scanning and passive surveillance, or by encouraging hospital administrators to identify technologies of concern or interest. Province-wide processes have varying information requirements but typically consider: 1) disease burden/need; 2) comparative effectiveness; 3) budget impact and total health system costs; 4) evidence of cost-effectiveness; 5) equity; 6) feasibility of implementation; 7) access in other jurisdictions. A description of the varying requirements by province appears in Table 2.

If a manufacturer of a medical device becomes aware that an HTA is being conducted, they can attempt to engage with the agency and provide relevant evidence to support the technology. However, the path to engagement is not always clear and the level of engagement varies between agencies.

Table 2 Data Requirements and Characteristics of Province-Wide HTA Processes

 

Alberta

British Columbia

Ontario

Quebec

Name

Alberta Health Technologies Decision Process

Health Technology Review

HQO's Evidence Development and Standards division

Institut national d’excellence en santé et en services sociaux

Link

http://www.health.alberta.ca/
initiatives/AHTDP.html

http://www.health.gov.bc.ca/htr/

http://www.hqontario.ca/evidence/evidence-process

http://www.inesss.qc.ca

Requirements

Social and System Demographics

  • Incidence/ prevalence
  • Capacity to deliver the service

Social and System Demographics

  • Disease burden
  • Population impact
  • Implementation plan
  • Training and credentialing required

Social and System Demographics

  • Burden of illness
  • Need feasibility of adoption into the health system
  • Economic feasibility
  • Organizational feasibility

Varies according to technology but generally considers clinical effectiveness and social and system demographics.

 

Clinical Effectiveness

  • Health effects
  • Non-health effects

Clinical Effectiveness

  • Health effects
  • Non-health effects
  • Amelioration of burden of disease (quantity and quality of life)

Clinical Effectiveness

  • Effectiveness
  • Safety

 

 

Costs

Costs

  • Incremental costs (based on CADTH guidelines)
  • Budget impact
  • Implementation costs
  • Costs to private and public sector

Value for money

 

 

Political and Public Policy Considerations

Political and Public Policy Considerations

  • Access in other national and international jurisdictions
  • Impact on environment
  • Extent to which technology targets injury versus illness prevention
  • Impact on marginalized or disadvantaged patients
  • Risks to implementation

Political and Public Policy Considerations

  • Consistency with expected societal and ethical values

 

Are Adoption Recommendations Given?

Yes

Yes

Yes

Yes

Example

Insulin Pump Therapy (2012) STE report

No reports published yet

Transcatheter Aortic Valve Implantation (2013)

Systemic hyperbaric oxygen therapy (2013)

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ACRONYMS

CAD: Canadian Dollars
CADTH: Canadian Agency for Drugs and Technologies in Health
CAN/CSA-ISO: National Standards of Canada / International Standards Association
CHA: Canada Health Act
CMDCAS: Canadian Medical Device Conformity Assessment System Certificate
FDA: Food and Drug Administration, United States
GPO: Group Purchasing Organizations
HTA: Health Technology Assessments
HQO: Health Quality Ontario
ISO: International Standards Association
MDB: Medical Devices Bureau
MDEL: Medical Device Establishment License
MDL: Medical Device License
SSO: Shared Service Organization
TPD: Therapeutic Products Directorate (TPD)

SUGGESTED READINGS

Battista RN, Côté B, Hodge MJ, Husereau D. Health technology assessment in Canada. Int J Technol Assess Health Care. 2009 Jul; 25 Suppl 1:53–60.

Menon D, Stafinski T. Health technology assessment in Canada: 20 years strong? Value in Health 12 (Suppl 2) (pp S14-S19), 2009 Date of Publication: June 2009. 2009; (Suppl 2):S14–S19.

Flood C. Defining the Medicare “Basket” [Internet]. Ottawa: Canadian Foundation for Healthcare Improvement; 2008. Available from: http://www.cfhi-fcass.ca/SearchResultsNews/08-01-01/28b209d8-d0d6-44d3-920c-df147984d371.aspx

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USEFUL LINKS

The Health Technology Exchange www.htx.ca

Health Regions in Canada - http://en.wikipedia.org/wiki/Health_regions_of_Canada

Hospitals in Canada - http://en.wikipedia.org/wiki/List_of_hospitals_in_Canada

MEDEC is the National Canadian medical technology industry association - http://www.medec.org/en

Medical Device Regulation in Canada: A Primer - http://www.cadth.ca/products/environmental-scanning/health-technology-update/health-technology-update-issue5/medical-device

Inventory of Canadian Clinical Practice Guidelines maintained by the Canadian Medical Association - http://www.cma.ca/cpgs/

Guideline developers list - http://www.cma.ca/index.php?ci_id=54297&la_id=1 

Principal teaching hospitals and affiliated centres of research list -  www.acaho.org

Health insurance companies in Canada www.clhia.ca

REFERENCE

  1. Green, Jeff "Canada’s Population Hits 35 Million". The Toronto Star [Toronto, Canada] December 6, 2012. http://www.thestar.com/news/canada/2012/12/06/canadas_population_hits_35_million.html
  2. Canadian Institute for Health Information. National Health Expenditure Trends, 1975 to 2013 [Internet]. Ottawa, Ont.: Canadian Institute for Health Information; 2013 [cited 2013 Mar 1]. Available from: https://secure.cihi.ca/estore/productFamily.htm?locale=en&pf=PFC2400&lang=en2
  3. Grootendorst P. Health Technologies as a Cost-Driver in Canada  Reference Number: 1000122796 [Internet]. Toronto, ON: Paul Grootnedorst; 2011. Available from: http://individual.utoronto.ca/grootendorst/pdf/grootendorst-et-al-final-report.pdf
  4. Arshoff L. Who Pays: Institutional Funding & Decision Models. Toronto, ON; 2008.
  5. US Commercial Service. Healthcare Technologies Resource Guide A Reference for U.S. Exporters: 2014 Edition [Internet]. Washington, D.C.: US Department of Commerce; 2014 [cited 2013 Mar 1]. Available from: http://export.gov/build/groups/public/@eg_main/@byind/@healthtech/documents/webcontent/eg_main_068140.pdf
  6. Government of Canada O of the AG of C. Chapter 6—Regulating Medical Devices—Health Canada [Internet]. 2011 [cited 2014 Feb 10]. Available from: http://www.oag-bvg.gc.ca/internet/english/parl_oag_201106_06_e_35374.html

AUTHORS & CONTRIBUTORS

Don Husereau, BSc, MSc, University of Ottawa and Senior Associate, Institute of Health Economics, Ottawa, ON, Canada
Shahira Bhimani, BSc, PT, MSc (HTA&M), Manager, Strategic Initiatives, HTX - The Health Technology Exchange, Toronto, ON, Canada
Larry Arshoff, BSc, MSc, President, Diagnosis, Solutions & Results Inc., Thornhill, ON, Canada
Stephen Dibert, BSc, MBA, Dibert Consulting Inc., Toronto, ON, Canada

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