I apologize. The date of my appearance was changed and I only had last night to deliver the information electronically.
I would like to present some evidence from a report I recently published that attempts to measure the number of reimbursement approvals by the provinces and compares that to the number of positive CDR recommendations issued. That same report attempted to measure the total wait times to access new medicines for those who are dependent on provincial drug plans. And I'd like to discuss some reasons that I belive the CDR process itself is really not necessary.
To begin, a recent report that I published compared the number of provincial reimbursement approvals versus CDR recommendations. What was found was that CDR recommended for reimbursement slightly less than half of the pharmaceuticals and only about 31% of the biological drugs that it reviewed during 2004 and 2005. This is based on data supplied by Brogan Inc., a database that summarizes much of what is available from Health Canada.
Even though the CDR approved a small number of drugs that it reviewed, the provinces themselves approved far fewer. In fact, on average, less than 20% of the new drugs that were reviewed by the CDR were accepted for reimbursement approval by the participating provinces. Interestingly, Quebec approved more new pharmaceuticals for reimbursement than the CDR itself. Quebec is not part of the CDR process, as you all know.
We also observed a large variation between the provinces in terms of reimbursement decisions. This suggested that cost factors, not scientific assessments of value, were driving reimbursement decisions. If science were the basis of this, it would be objective and they all would come to a similar standard. By separating the analysis for biological medicines versus pharmaceutical medicines, we also noted that far fewer biologicals were being approved for reimbursement relative to pharmaceuticals.
In terms of the wait time, including the delay for Health Canada approval on safety and effectiveness, and we also broke it down in terms of the CDR and provincial reimbursement time, we measured a total wait of 930 days, on average, across all drug submission types. This covered both biological and pharmaceutical medicines together. That was a total of two years and seven months, on average. Those people who are dependent on public drug programs wait up to two years and seven months to access a new drug.
We broke that down a little further into segments that measured the Health Canada delay for biologicals, with 633 days on average. The CDR added an additional 186 days, and provincial reimbursement across the provinces, on average, added an additional 187 days. That breakdown analysis did not include Quebec. Similarly for pharmaceuticals, Health Canada added 397 days to the wait; CDR added 257 days to the wait; and the provinces themselves, on average, added 201 days to the wait. For biologicals, we have two years and ten months that people were waiting for access to new biological medicines, and it was two years and five months on average for people to wait for access to new pharmaceuticals.
For a number of reasons, I believe the CDR is not necessary.
First, drug expenditures are not making public health insurance financially unsustainable. There is a misguided war against medicines going on in Canada. I publish research on an annual basis that measures the growth in public health expenditures in the provinces versus their total revenues from all sources, including federal transfers. That analysis shows that public health expenditures in every province are growing much faster than the ability of the provinces to pay for them. The blame for this, over time, has been shifted from doctors to hospitals, and now to drugs. The components of our health spending are being blamed for the unsustainable growth in public health expenditures. I believe this is misguided.
In the case of drugs, in particular patented medicines or new drugs receive most of the blame. But again, this is misguided. Patented medicines made up only 6.8% of public health expenditures in the most recent year, 2006, and even less in past years.It's simply impossible on a statistical level for patented medicines to make a major contribution to the unsustainable growth rate in public health expenditures overall. Therefore, cost containment measures of the nature that we see with the CDR are really unnecessary.
In fact, over 31 years, there is no statistical relationship between the rising percentage of public health expenditures going to drugs and changes in the overall growth rate of public health spending in Canada. The two are simply not linked. Drugs have increased as a percentage of overall public health spending, but it has not affected the growth rate.
Drug utilization is up, and this accounts for the rising share of expenditures going toward drugs. But as I mentioned, this has not had an impact on overall expenditure growth rates, because medicines are simply a cost-saving and cost-efficient substitute for other kinds of health technologies and treatments.
In fact, I decided to hypothetically eliminate spending on drugs in this analysis. Even if we spent zero on drugs, both patented and non-patented drugs, how would the other components of health spending grow? What would be the rates of growth? I found that all other components of health spending are growing at unsustainable rates, while accounting for more than 90% of public health spending. Therefore, the singular focus on drugs as a cost problem in health care is really misguided.
In fact, if public health insurance were designed differently for either our individual drug plans or public health insurance in general, there would be no need for a CDR.
Alternatively, we could introduce or should introduce deductibles, because insurance should only cover catastrophic expenses and not affordable expenses. Most drug expenditures are in fact affordable. According to Statistics Canada data, on average, most people spend less on pharmaceuticals every year than on things like alcohol, tobacco, and games of chance.
We could also introduce flat percentage co-payments. There should be a price at the point of consumption for health care goods and services, not only for drugs but for other health services.
We should have comprehensive coverage, including drugs, so there is an equal application of deductibles and co-payments to all types of medical treatments to encourage efficient substitution among competing health care options. Because drug plans only cover about one-third of the population and private plans or cash out-of-pocket payments cover the rest, the effective price at the point of service for drugs is much higher than for those things drugs might substitute for that are under the medicare package.
It does not mean I'm an advocate of expanding the medicare umbrella to include drugs. I think there are international examples of systems that introduced private insurance that is comprehensively inclusive of drugs that are more sustainable, better able to provide value for money, and preserve consumer choice.
Last, I would like to point out that even advocates and representatives of the CDR have stated that the real rationale for the CDR is to remove the element of inter-jurisdictional policy competition among provinces in terms of what they list for coverage under their drug plans. I believe this reduces accountability for rational decisions. It's part of the strength of our democracy and federalism in Canada to have policy competition among jurisdictions.
Unfortunately, the people impacted on by policies such as the CDR do not represent a lot of votes. About 4% or less of the population face catastrophic expenditures for health care in any given year. These people simply represent too few votes to have a voice in the absence of groups like the Diabetes Association, for instance, who are here today.
That is the sum of the details of my presentation. I'd be happy to accept your questions.