Health Committee on April 16th, 2007

[Mark Ferdinand]

Mr. Fletcher, I have just one point. I would encourage members, in response to Ms. Brown's suggestion, to ask these questions of CDR representatives when they appear before the committee.

As a short answer to your question in terms of Mr. Williams' statement with regard to the focus on cost, the point of the common drug review is to undertake analyses of cost effectiveness. There are situations in which they can make such comparisons and take into consideration clinical data that may or may not be available, but at the end of the day, when you look through all of the different types of analyses that they can do, cost-effective analysis is certainly one of them that they have to do—and in one case the one they will have to do—if they don't have certain types of information. So the focus on cost is part and parcel of what the common drug review does.

[The Vice-Chair, Bloc, Christiane Gagnon]

Your time is up. I am giving the floor to Ms. Priddy.

[Penny Priddy, NDP, Surrey North, BC]

Thank you, Madam Chair.

I do want to second the comments that were made earlier by my colleague, Ms. Brown.

Having said that, it's important for me to say, as I look at this material, that I keep two things in mind. One is that Canadians need access to the most effective drug that will work for them, and they need access quickly. That doesn't always mean it's a new drug, but they need access as quickly as possible, and finances need to not be a barrier to that. I personally would suggest that it be covered, and that would be a debate for a very different time, but that's the position I think I would take. Currently, you can cover it all you want, but still, many people's plans are not going to.

My first question would be—and I think I heard, but I don't wish to put words in anyone's mouth—that mostly people are suggesting, with perhaps one exception, that the CDR really isn't working.

Mr. Keon, I want to go back to you for a moment, because you speak from the perspective of generic drugs. You made a comment about how, if the generic drugs were included in CDR, it might make the route faster for provinces. I'd like you to comment, if you would, on the difference CDR might make for generic drugs, because others have talked about the difference that it does or doesn't make for name brand drugs.

Let's, for a minute, suggest that the CDR is working in some reasonable way, just for the sake of this discussion. Is this a logical route to a national drug strategy or a national formulary? Is it getting in the way of moving in that direction? For people who'd like to answer that—some people think we shouldn't move in that direction, and I realize that—is the CDR helping it or is it getting in the way of moving ahead with a national drug strategy and a formulary?

So, perhaps, Mr. Keon, you could begin with the generic part for me.

[Jim Keon]

Yes. Thank you.

In fact, the common drug review, I argued, is an essential part of the Canadian process now for brand name drugs. I think in large part it was recommended by the provinces, asked for by the provinces, and that's how it came about.

For generic drugs, we have a different situation. For a new brand name product—so you're looking at a product that has not been on the market yet—we don't know the full analysis of the therapeutic benefits or the potential harm. We also don't know whether it's worth the cost in relation to existing medicines in those therapies.

For generic drugs, you're looking at a product that's coming on the market 12 years to 15 years later. Generally speaking, the benefits and downsides of that product are well known. We compare our product to the brand name product with Health Canada and they approve our product as being essentially the same, equivalent. They give us a declaration of equivalence.

So we believe that at that point you should let the generic come onto the market based on the Health Canada decision. Our products do not go through the common drug review. We believe it's an entirely different situation.

[Penny Priddy, NDP, Surrey North, BC]

And you're not suggesting that they should.

[Jim Keon]

I don't think the common drug review would want to do that. They would see it as a duplication.

[Penny Priddy, NDP, Surrey North, BC]

All right. Thank you.

[Jim Keon]

If I could just respond to Mr. Fletcher, who asked about generic drug prices, yes, a study last year by the Patented Medicine Prices Review Board showed that generic drugs here were priced higher than those in other countries. In fact, many provinces are now taking measures about that. The Ontario government passed a regulation that is reducing our prices by over 20%.

According to the drug policy announced by Minister Couillard last year, Quebec intends to set the same prices as Ontario. At the moment, generic drug prices are dropping considerably.

[Penny Priddy, NDP, Surrey North, BC]

I know Mr. Fletcher's answer won't count against my time.

Mr. Williams.

[Russell Williams]

On your question on the national pharmaceutical strategy, again, it sounds good, but I think it's going to give another false hope, just like CDR did.

If we want to move toward making sure all Canadians are covered and have a catastrophic drug program, I think we have to build in something. In each jurisdiction there are different priorities and different weightings in terms of the various needs. What we have to do is build on something that respects that regional diversity. I would be quite worried that if the notion is that we can create something overall that is centralized, it may not actually give us what we want. What we should do is build on the reality of each region and what it's capable of. Let the regions run it, as they do the other health care systems. But I agree that we should be moving toward....

We've been trying to do some work. Any time the committee wants to study it, we'd love to come and give you a look at our work on trying to develop something that will make sure, across this country, that we have a program that makes drugs available for all Canadians.

[Penny Priddy, NDP, Surrey North, BC]

Quickly, if you freeze the funding, does that simply not slow down the process that's currently in place?

[Peter Brenders]

From our side, I would suggest that it wouldn't really make any difference, because nothing's getting approved, which is the scary part.

To your point about whether this is a framework for a national pharmaceutical strategy, if anything, it should be a lesson for us. When you try to do a cookie-cutter common process for what is coming out of very specialized, unique needs when there isn't a lot of experience out there, it doesn't work. If anything, it should be a concern and a caution that the process does have limitations, and it speaks to what Daniel Billen has mentioned in terms of a different process for first-in-class and what we're talking about in terms of procedures that can evaluate novel treatments in different areas. It doesn't take any societal values into the process, and it doesn't incorporate public opinion.

[Penny Priddy, NDP, Surrey North, BC]

And as one quick last one, if you—

[The Vice-Chair, Bloc, Christiane Gagnon]

I am trying to be fair to everyone, Ms. Priddy. I am giving the floor to Mr. Batters, but you will have time to speak again.

Mr. Batters.

[Dave Batters, Conservative, Palliser, SK]

Thank you, Madam Chair, and happy birthday to you.

I want to thank all the witnesses for being here today. They gave some excellent presentations.

Mr. Billen, I don't think I've ever seen passion like that at committee since I've been a member of this committee. You obviously feel very strongly about your position here today.

I'd like to just briefly pick up with Mr. Keon, before going on to the CDR specifically.

My colleague asked about the price of generic drugs and the fact that generic drugs in Canada are far more expensive than the exact same generic drugs available in the United States. You're commenting that you are moving to address that. Are you saying that, nationwide, province by province, generic drugs are soon going to be on par cost-wise with the equivalent drugs in the United States?

[Jim Keon]

What I mentioned was that the provincial government in Ontario has already passed a regulation. For the vast majority of generic drugs, the Ontario government will not list them on its formulary unless they are at least 50% lower than the brand name product. In Quebec, they have a rule that says they will only pay the same price. So provincial governments are addressing this issue, yes.

[Dave Batters, Conservative, Palliser, SK]

I understand that, sir. I'm from Saskatchewan, so I'll be looking very closely at what's done in that province. It really makes no difference to me in terms of a percentage of the brand name drug. The question asked was on the comparison to exactly the same generic drugs in the United States.

[Jim Keon]

These prices will probably be lower than those in the United States on the majority of products, yes.

[Dave Batters, Conservative, Palliser, SK]

Mr. Keon, what percentage of the sales revenue of your participating companies is invested in research and development, to discover new and innovative medicines to benefit Canadian patients? Today, the discussion is about access to new and innovative medicines. My understanding is that the generic drug industry is really not involved in that discussion.

[Jim Keon]

That's a very interesting question. Actually, about 15% of our revenues go back into research and development. That meets the definitions of the tax act.

The brand name companies in Canada have been declining. They spend about 8%. Surprisingly, we spend twice as much in Canada on research as the brand name companies do as a proportion of sales. The reason is that generic drugs in Canada are actually made here. They're researched here, they're developed here, they're formulated here, they're manufactured here, and they're sold here. That's why the research is so high in Canada.

[Dave Batters, Conservative, Palliser, SK]

Can you give me some examples of some new and innovative medicines that have been brought to market by generic drug companies?

[Jim Keon]

Generic drug companies are of value to the health care system in that after patents expire we provide products at much lower prices.

[Dave Batters, Conservative, Palliser, SK]

That's not the question, sir. Can you give me an example of a new and innovative medicine that you've discovered through research and development and that you've brought to the marketplace to benefit Canadian patients?

[Jim Keon]

That is not the job of generic drug companies.

[Dave Batters, Conservative, Palliser, SK]

You just answered my question.

Mr. Williams, if the CDR were to be eliminated through funding cuts, whether it be the 30% federal percentage, the provincial percentage, or both, what would be the consequence—or would there be a consequence, given the duplication you've indicated exists in the system?