Thank you, Madam Vice-Chair.
I am President of the Canadian Generic Pharmaceutical Association. I'm going to make my presentation in English.
I would like to start by saying that we appreciate the opportunity to make comments before your committee on the common drug review. The Canadian Generic Pharmaceutical Association, or CGPA, is the national trade association representing Canada's generic pharmaceutical industry.
To give a little context to start, according to the Canadian Institute for Health Information, since 1997 Canadians have been spending more on drugs each year than they have on physicians. IMS, the industry source for data, reports that between 1997 and 2006, spending on pharmaceuticals rose from $6.8 billion to $17.8 billion, a 162% increase over the 10 years. It is a trend that will continue to grow as the population ages, as expensive new medicines replace existing ones and as drug treatments form a larger part of patient care. IMS predicts that sales of prescription medicines will grow at 7.5% annually, to reach $23.4 billion by 2010.
The generic industry plays a key role in the health care system. We provide safe, proven, high-quality medicines, and the Canadian generic industry helps maintain the sustainability of government and employer-sponsored drug plans. Generic drugs are used to fill more than 44.5% of all prescriptions in Canada, and yet they represent only 18.1% of the expenditure. As these figures illustrate, generic drugs provide excellent value for money in Canada.
I should start out by saying that generic drugs are not actually evaluated by the common drug review, and you should keep that in mind for my comments. However, we do have some views on the common drug review.
The CDR was established to serve an important function for Canadians. When new drugs are approved by Health Canada, a brand name manufacturer must show that the product for the disease, condition, or ailment for which it is to be prescribed is more effective than a placebo. It must also be proven to be safe, which is obviously a relative term, as all prescription drugs have side effects, some more serious than others. We have seen high-profile withdrawal of such drugs as Vioxx, Rezulin, Baycol, and Propulsid in the past several years.
As has been demonstrated time and again, just because a drug is new does not mean that it is any more effective or any safer than drugs that are already on the market.
The Patented Medicine Prices Review Board, PMPRB, appraises the therapeutic novelty of every patented medicine in Canada to distinguish breakthrough drugs from other medicines, and it publishes these appraisals in its annual reports. Between 1990 and 2003, the PMPRB appraised 1,147 new drugs. Of these drugs, 68, or only 5.9%, met the PMPRB's regulatory criteria of being a breakthrough drug.
What physicians, provincial governments, and patients cannot know simply from the fact that the product has been approved by Health Canada is whether or not the new drug is more effective or safer than drugs that are already on the market. For physicians who need to determine whether and under what circumstances they should be prescribing the drugs, for governments and employers who are trying to determine whether they should be paying for the drug, and for patients who might be prescribed the new drug, these are the most important questions. The common drug review was created to answer those very questions.
There have also been concerns expressed that prescription drug coverage in Canada varies from province to province. A drug might be covered by the government plan in one province but not another. Again, the common drug review is intended to be a tool for helping to address this patchwork of coverage by making recommendations to all provinces on whether or not the therapeutic improvement offered by a new drug justifies its additional cost.
Governments, physicians, and the public must have information regarding the relative safety and efficacy of the product versus other drug or non-drug treatments in order to make decisions about whether to prescribe and pay for these new drugs. Health Canada's current approval process does not provide that information.
I suggest that the spirit of the formation of the common drug review be extended to apply to generic pharmaceutical products. Closer federal-provincial cooperation on the approval and listing of generic pharmaceutical products would benefit patients, taxpayers, and even brand name companies.
When generic drugs are submitted for inclusion on provincial formularies—the list of drugs for which each province will pay—they have already been approved by an exhaustive evaluation process at Health Canada. Yet while Health Canada standards of review are internationally recognized, some provinces continue to operate their own redundant review systems. This needless duplication of the federal approval delays the entry of generic drugs and costs taxpayers millions of dollars every year as provinces continue to pay for higher-priced brand versions for longer than they should.
The approval of generic pharmaceuticals at the provincial level should be a quick and easy process. Once a provincial government has weighed the therapeutic value of a new drug against its cost and decided to pay for it, which they do with a new brand drug, the decision to add a generic—generally 12 or 15 years after the introduction of the brand—to its formulary should be clear. After paying for a brand drug for years while it is under patent protection, the government should start to save money at the earliest opportunity by listing cheaper generic versions as soon as they are approved by Health Canada. Because private sector drug plans often base their benefits on what drugs are covered by government plans, a faster process would also provide Canadian employers and consumers with better access to generic drugs, resulting in even more significant savings. This would also provide the budget headroom so that drug benefit plans could pay for more of the brand name industry's new drugs.
Thank you for your time and attention.