Health committee  I think that's the subject of our entire hearing and your entire study. I think it's tremendously important to get to an A, and I trust this committee will find a way. The brief answer to how New Zealand does a better job or Australia does a better job is that they purchase medicines following a negotiation, and our provinces in many cases do not.

Health committee  Each level of government is susceptible to different sorts of pressure from different lobbies. What the federal government is susceptible to by way of pressure is very different from what an individual province might be susceptible to, and it varies province to province. Ontario has a rather big drug industry within its borders; Saskatchewan does not.

Health committee  What a beautiful way of breaking it down. The short answer to your question is that all of the above points you mentioned are doable. The devil is in how you do it. On the very first one of a national formulary, we do actually have that. We must remember that the common drug review and the pan-Canadian oncology drug review do exist.

Health committee  It was an elegant way of framing it.

Health committee  It was a sensible comment.

Health committee  As I mentioned earlier, when you have a single drug product on provincial formularies supplied by two, three, four, five, or some number of different companies, the agreed price is the same for all those companies on the formulary. Hypothetically it might be 50¢ for all four suppliers.

Health committee  I want to rewind to something you said at the beginning. You very wisely said there are two issues on the table. One is getting prices down; the other is increasing the number of people who get drugs, increasing the coverage. Those are indeed two issues, but there is a question of sequencing that needs to be thought about.

Health committee  That's true, but when you do lower it from $300 to $200, you decrease the pain on either the federal government or the provincial government, or both, to bring her into a formal coverage scheme, because it's less expensive to do so. I'm not disagreeing with you. I'm just trying to invite you to think about the critical path to the goal we both want.

Health committee  This again goes back to my point about asking what the critical path is. Of course we can imagine scenarios in which the insurance industry would not be terribly delighted with your plans, but if the project begins by making the drugs less expensive, you're helping the industry, so you're much more likely to get their buy-in.

Health committee  Perhaps I can have just a quick response to that. You've put your finger on absolutely the best constitutional hope for legislation to survive, and everything you said was correct, but despite that being the high-water mark of constitutionality, it's still pretty low because of how few cases have been decided under POGG and the fact that you do currently have nine out of 10 provinces co-operating to bring down drug prices.

Health committee  Professor Ryder is suggesting an option for sure, and it would require the legislative changes he described. I assume touching the Canada Health Act is politically very hard, so people would rather avoid it. This is part of the reason I suggest you could achieve exactly the same thing through a series of contracts.

Health committee  You do. I would say number one is the most desirable and number three is the least desirable.

Health committee  I am, to some extent. I'm not aware of any contractual basis. I think that was a press release agreement that the various premiers got into. It has performed abysmally, because although the goal at the outset was to band together, combine purchasing power, and negotiate with the maximum purchasing power and therefore get the lowest price, what the provinces instead did was what I earlier called fiat pricing, or command pricing.

Health committee  Consider the provincial formularies right now. A formulary is a list of medicines that are reimbursed by the provinces. You'll often find for a given drug two, three, four, five, six—some number of suppliers—for that drug, and the price that the province is willing to pay to those multiple suppliers is always exactly the same.

Health committee  Professor Ryder is right: this is the one point on which I think we do disagree. I am more pessimistic about using POGG for pharmacare legislation federally. I do not think it would work. “Doomed” is not the word that I would use, but “Hail Mary, faint hope” would be. I would not encourage Parliament to try to solve this problem in such a way that—because it does need to be solved—would be hinging on a legislative basis of tenuous or very tenuous reliability.