Thank you, Mr. Chair.
Thank you, committee members, for this opportunity to take part in the pre-budget consultations.
My organization, Consumer Health Products Canada, represents the manufacturers of over-the-counter medicines and natural health products. We are a $5.6-billion industry, we account for about $1.5 billion in exports, and we provide jobs to 56,000 Canadians.
Canadians use over-the-counter medicines and natural health products to manage their coughs and colds, their allergies, headaches, and upset stomachs, and also to manage the symptoms of chronic ailments, such as the pain of arthritis. That's self-care, and it matters to Canadians and contributes to a sustainable health care system by helping them avoid unnecessary doctor visits.
For example, while the vast majority of Canadians with minor ailments practise self-care, Canadian surveys have established that about one in seven Canadians will visit a doctor to have those ailments treated. Doctor visits for colds, headaches, and upset stomachs alone cost the health care system about $1 billion annually.
CHP Canada has calculated that if only 16% of those people who go to the doctor for one of these minor ailments—and I'm speaking now of people who have self-assessed their symptoms as being relatively minor—were to practise self-care instead, then you would free up about three million doctor visits a year, and that would be enough to provide family physicians to 500,000 Canadians who currently don't have a family doctor.
I'd like to speak for a moment about growth, as you referred to earlier, Mr. Chairman. Many of the over-the-counter medicines Canadians use in self-care were once prescription drugs. When you think of pain relievers like Aleve, or Advil, or if you think of allergy medicines like Reactin or Aerius, or even nicotine patches, these products became available over the counter by going through a regulatory process called the “Rx-to-OTC switch”. The Rx-to-OTC switch process is the main way that our industry grows, and it's also the main way that we increase our contribution to an efficient health care system.
When it comes to budget measures, we've already submitted a detailed proposal to the committee for an end to tax policies that undermine that contribution to self-care. In short, it makes no sense that when a medicine moves from prescription status to being used in self-care, it loses its exemption under the goods and services tax and its eligibility under the medical expense tax credit. Tax policy and health policy really need to come back into alignment on this issue.
It's also a tax fairness issue, because 24% of those Canadians who go to the doctor for their minor ailments told us that they did so in order to get a prescription medicine that would be covered by their drug plan. The millions of largely lower-income working Canadians who don't have access to a good quality drug plan can't avoid those taxes that way. In your questions for the consultation, you asked about broader federal actions that could contribute to economic growth, and I'd like to underline one particular initiative that's under way right now.
Health Canada has just launched the first in a series of consultations on a whole new regulatory framework for these self-care products, and we applaud the department for having framed this as an attempt to help better inform self-care. I'd like to underline a particular opportunity that really shouldn't be missed in that context.
I referred earlier to the Rx-to-OTC switch process, and unfortunately, that process in Canada lags badly by comparison to most of our major trading partners. Canadians gain access to these switch products on average seven to nine years after their counterparts in the United States or in the European Union. For example, I made reference earlier to Aleve. That product became available in Canada almost nine years after it was available in the U.S.
There's a need to address the overlapping, inefficient, and sometimes conflicting mishmash of federal and provincial regulations governing this switch process. The way it works currently, Health Canada reviews all of the evidence submitted by a manufacturer, and it makes a determination to approve the switch. This is a process that takes about a year. After that, the manufacturer has to negotiate a variety of different provincial approval processes that reaffirm the switch, and then Health Canada decides additional conditions of sale. This is called drug scheduling, and it's how basically it's determined whether your product is going to be purchased from behind the counter through a pharmacist, or perhaps in the front shop of a pharmacy, or even if it can be sold through any outlet like a 7-Eleven.
This federal-provincial interplay can delay product launches for up to two years in some provinces. It leads to different outcomes in different provinces, and overall it basically creates a lot of disincentives to innovative manufacturers. We believe that under the auspices of this self-care framework there's a tremendous opportunity for Health Canada to take a leadership role and integrate the drug scheduling process with the product approval process. To do so, you would not only make the framework much more effective, but you would also be doing something that is entirely consistent with current federal and provincial initiatives, such as the negotiations on the new health accord, discussions on affordable access to medicines, and reductions of barriers to internal trade.
With that, I'll stop. Thank you, and I look forward to your questions.
