Health Committee on Feb. 7th, 2007

[Carolyn Bennett, Liberal, St. Paul's, ON]

In view of the proposed legislation in the United States and the Democrat promise about cheap drugs from Canada, I guess I'm on my ongoing theme about the regulation of Internet pharmacies and those kinds of things. That didn't seem to be one of the areas you looked at. Is there a reason?

We would love to know what the performance targets would be. On the idea of more counterfeit drugs or the idea of drugs being sold as though they're Canadian drugs, there seems to be a very increased risk of that. I had hoped that, in terms of the regulations and where we were in 2004, we'd be seeing spot checks or those kinds of things, to make sure about the regulation of what Canadians think are safe drugs, so that they're getting what they thought they were getting or what the doctor prescribed.

[Neil Yeates]

Perhaps I can address that, Member.

Yes, we are concerned about the presence of counterfeit drugs. As I'm sure you know, it's an international problem, so we are working with our colleague regulators from around the world on this. We're also working on part of a broader interdepartmental strategy on counterfeit, and we're looking at the kinds of additional measures that we would need to take collectively with other departments.

As you know, there are issues around border entry, so we're working closely with the Canada Border Services Agency and so on.

We really have two levels of work going on. One is thinking in a very broad way about what kinds of strategies we need to put in place to combat counterfeit. Then, day to day, how do we deal with the kinds of border interception issues and intelligence that gets gathered and that we need to act upon?

But you're quite right. It's an emerging global problem, and it's something we need to try to keep on top of.

[The Vice-Chair, Bloc, Christiane Gagnon]

Thank you. Time is up. We can come back later.

I am the Chair, but I'm also a Bloc québécois member. So I could be seated at my usual place and ask questions. I ask committee members whether they have any objection to me asking my questions from here, since there's no more room over there.

[An hon. member]

You can do it.

[Christiane Gagnon, Bloc, Québec, QC]

Thank you, you're very kind.

Madam, your report states that Health Canada had difficulty performing its regulatory responsibilities and that that could have serious consequences for citizens. You mentioned, for example, exposure to certain hazardous products.

To what hazardous products are you referring?

I'd also like to know whether there would be any emergency measures to take. If there are hazardous products not subject to regulation, that means they're in the market.

Is that what you're referring to in your report?

[Sheila Fraser]

Thank you, Madam Chair.

Our report states that the Department of Health cannot show how it is performing its responsibilities. It has not determined the kind of activities that it should carry out for the various programs, nor the level of activity required. It hasn't set targets for all performance indicators.

We didn't assess the programs as such or the safety of the products. Knowing whether the department can show us how it meets its responsibilities is another question. Has it determined the activities it considers necessary and are the resources allocated accordingly?

That was more of a comment or fairly general observation to emphasize the importance of regulatory programs. We have to be able to show that they are well managed by the department.

[The Vice-Chair, Bloc, Christiane Gagnon]

Further to that, you also criticized a lack of resources, considering as well that they haven't adequately targeted the objective of each program or the way in which they could determine the effectiveness of the programs or whether their targets are met.

Ms. Cartwright, from Health Canada, has just told us in her statement that she has prepared detailed action plans for each chapter. I'd like to know whether they are ready. Could our committee have copies of them so that we can evaluate and closely monitor what goes on? We are here as well to examine Health Canada's performance of its obligations.

[Susan Cartwright]

We would be pleased to furnish the committee with copies of our action plans.

[The Vice-Chair, Bloc, Christiane Gagnon]

Ms. Fraser, have you seen those detailed action plans? Do you find them satisfactory?

[Sheila Fraser]

We haven't seen them, Madam Chair.

[The Vice-Chair, Bloc, Christiane Gagnon]

Perhaps we'll get them before you.

[Sheila Fraser]

That's possible.

[Louise Dubé, Principal, Office of the Auditor General of Canada]

We have a preliminary version of the action plan, but I believe the department was preparing to establish a somewhat more detailed action plan with timetables. We haven't yet seen that version of the action plan.

[The Vice-Chair, Bloc, Christiane Gagnon]

Thank you.

I have a minute left.

I tried to determine whether there had been an increase in resources for regulatory programs for the safety and use of domestic products, medical equipment and pharmaceutical products. I was told that there wasn't enough because Health Canada's responsibilities are expanding. People feel there aren't enough resources, even though there are 10,000 public servants, I believe. Regulations are slow in coming.

Have efforts been made to increase resources? I've tried to get an answer to that, but without success. Can people tell us?

Ms. Fraser, have you been given any encouraging signs on that subject?

[Sheila Fraser]

We indicate that the department can definitely add some. In Table 8.6, we show funding trends for the three programs. You'll see that, in two cases, funding has increased and that, in one case, it has remained stable or declined slightly.

We know that demand is increasing, whereas funding appears to be remaining quite stable. Without knowing the required activity level, we can't judge whether funding is sufficient. There may be too much for certain activities, not enough for others. You really have to establish which activities are necessary for the program and then allocate resources.

[The Vice-Chair, Bloc, Christiane Gagnon]

That was in your report, but, since you prepared it, have they headed in the direction you recommended?

[Sheila Fraser]

I unfortunately can't answer you, but perhaps the department could.

[The Vice-Chair, Bloc, Christiane Gagnon]

Thank you.

[Neil Yeates]

Yes, we can provide some updated information to the committee on what's occurred since the Auditor General did the audits, which now are dated 2003-04, 2004-05, and 2005-06.

Two of the key areas for us have been compliance and enforcement and post-market surveillance. I should say that these are common themes for food and drug regulators around the world. If you talk to the FDA or the European Union, they will say these are the two key areas that need more investment, and we felt that's the case here as well.

I can give you some numbers just on staffing, and for us what's critical is our staff capacity. In 2004-05 we had close to 200 on staff in our inspection service. Next year we'll be up to about 260 on staff. In our post-market area in 2004-05 we had about 112 on staff, and next year we'll have 192.

We're continuing to invest additional resources into these two key areas, because we feel they are priorities for new investment, so that's what we've been doing since the years of these audits.

[The Vice-Chair, Bloc, Christiane Gagnon]

Thank you.

Mr. Fletcher, go ahead.

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Thank you, Madam Chair.

The audit found that under the previous government, between 1998 and 2006, Health Canada did not comply with sections 33 and 34 of the Financial Administration Act for payments of goods and services under the non-insured health benefit program. The department has responded.

However, I'd like an explanation for why there wasn't compliance under sections 33 and 34 of the Financial Administration Act for almost seven years under the previous government.

I would also like to know what action Health Canada has taken under Canada's new government to address the concerns identified in the Auditor General's report to ensure that there is compliance.

[Susan Cartwright]

Madam Chair, the circumstances surrounding the non-insured health benefits program...and this particular contract to administer it came into operation in 1998. I mentioned some of the challenges earlier, in terms of the transition to the new contractor and subcontractor, and the priority that managers in the program accorded to ensuring that this group of Canadians continued to receive essential health benefits and services. At the same time, we recognize that we have a responsibility to be in compliance with the Financial Administration Act.

In a moment, I will ask Ian Potter to add to this if he wishes, but I think it's fair to say that at the time, managers of the program believed they were in compliance.

We did some internal reviews of the program in 2003 and realized that there were weaknesses in our system and that at least in one area we were not in compliance. We began to implement a series of measures to bring us into compliance. The Auditor General then began some work of her own relating to the same contract, and we responded. We had a wave of three sets of responses that addressed the issues, which she had identified.

We are confident—and the Auditor General has confirmed this—that we now have a system of financial controls and a contract management process in place that does meet our responsibilities under sections 32, 33, and 34 of the Financial Administration Act.

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Mr. Potter.

[Ian Potter, Assistant Deputy Minister, First Nations and Inuit Health Branch, Department of Health]

Yes, I could just add that with the provisions we've now put in place--and I'm pleased the Auditor General has recognized that we now meet our obligations under sections 33 and 34—they are a much more rigorous process. What we have with the contractor is they submit to us a bill for their services, which is the payment processing, plus the bills they refund to the providers. So a person goes to a pharmacy, the pharmacy sends their bill to First Canadian Health, and First Canadian Health processes that and refunds the money to the pharmacist, and then they gather up these accounts and send them to us. There are over 15 million charges in a year, so we get a payment every two weeks.

At the moment we have a review of the bill that's received by Health Canada from First Canadian Health. We actually have a sampling frame that goes in and picks bills to make sure the bill they're submitting to us is justifiable. We then relate the payment they're asking for to the processing of the number of client services that have been rendered, and then we justify that to the penny, to make sure the bill they're giving us reconciles with the actual services they've performed.

In addition to that, we have a number of provisions that try to improve the accountability of the service. We have a next-day claims verification review, where we actually review the claims that come in every day against a certain template that says what's likely to be the provider's experience. If there are outliers, if one drugstore is providing many, many prescriptions out of the ordinary, we would put a flag on that and there would be an inquiry.

The contractor on our behalf sends quarterly letters to randomly selected clients, so we are able to see whether the clients actually had the service we're being billed for from First Canadian Health. We conduct a monthly post-payment account verification, where we take a random sample of claims and verify that the benefit is required. So we actually go to the First Canadian Health offices and look in their books to see that there actually was a payment made to that random sample and that the payment we had was then double-checked against the payment they made to the supplier.

We also conduct a biannual risk and trend analysis that profiles providers. So if we see behaviour that is out of the ordinary, we flag that, and we then have on-site verification for the providers where we pick a sample based on those risk assessments of who we should look at, and we send people to the pharmacies or dentists' offices to verify the accounts.

[Steven Fletcher, Conservative, Charleswood—St. James—Assiniboia, MB]

Thank you.

Do I have time for a quick question?