Health Committee on May 12th, 2009

[Dr. Brien Benoit]

Well, the thing is we don't have the mandate to do that because—

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Okay. My time's running out. I've got your answer and I'm not satisfied. I think we should devote a whole session to receiving your latest report to Parliament on the PMPRB.

I would like to know why you're branching out so extensively into generic drugs. You said yourself you deal with patent medicines. You are now engaged in imposing excessive price guidelines on some generic products. You're using the argument that they may be associated with a patent. There are huge concerns in the community about what's going on.

The generic drugs association has written to the minister saying that you're now asserting that you have jurisdiction over any medicine with a patent, including generic medicines with patents that are sold in competitive multi-sourced environments. And then they say that while it's true that a small minority of generic products are associated with patents through process innovations or licence requirements, no price or market advantage can be obtained by a generic patent.

So I want to know why you're doing this, and why you're not trying to include their voices in the consultations. Is this where some of the money is going? Are you branching out, and do you have the authority under the act--under the Patented Medicines Prices Review Board--to actually do this? Has the minister given her consent to this?

[Dr. Brien Benoit]

First of all, we have not discussed this with the minister. We have a new minister. We've met her, and this has not been part of the original consultation between us.

We are driven and controlled and mandated by the Patent Act. So if a generic product doesn't have a patent, we have no jurisdiction.

Now, it is only recently—and if you were a consumer, Madam, you would be grateful that we're actually doing this—that we have found that many generic products actually do have patents. Some of them are licences from the brand companies; some of them are processing patents, manufacturing patents.

Now, you say that we're not doing our job. We're actually doing our job, we think, fairly well, because we've now undertaken this workload, as directed by the Patent Act, to look at medications that have patents.

[The Chair, Conservative, Joy Smith]

Thank you, Mr. Benoit.

We'll now to go Ms. McLeod.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Madam Chair.

I will be focusing my comments and questions on Ms. Elinor Wilson and Assisted Human Reproduction Canada.

You had mentioned that it was 30 years ago, of course, when we had the first test-tube baby. I think there's probably not a month or two that doesn't go by without significant developments or stunning news stories. So what are you doing, actually, to keep up with the evolving science? Is that a mandate that you've taken on, and what are you doing in that direction, first of all?

[Dr. Elinor Wilson]

Thank you very much for the question.

You're absolutely correct. On a daily basis we receive a minimum of 15 newspaper clippings from around the world about new developments and new ways scientists have found to assist people with planning families. This continuously raises medical, moral, ethical, legal, and scientific issues for us.

Certainly one of the mandates under the act for Assisted Human Reproduction Canada is to keep abreast of the new and evolving science. As we move into our licensing responsibilities and as new technologies appear, the board of the Assisted Human Reproduction Agency will have to make some decisions. Is this particular technology ready for what we might call prime time, or is it still in the experimental stages and should perhaps be restricted to fewer places?

One of the ways we've done this is by establishing a science advisory panel comprised of internationally recognized experts in the field, with very broad backgrounds. We have reproductive health clinicians, obstetricians, and gynecologists. We have an embryologist, and people with backgrounds in reproductive biology, social sciences, epidemiology, family medicine, genetics, neonatology, and anthropology. So we've tried to cover the expertise areas that apply to assisted human reproduction.

This panel provides advice to the board, but one of its more important responsibilities is what we call a future scanning process. They've put in place a mechanism to constantly monitor scientific literature. When you see some new development in the literature, it generally takes several years before it actually gets into the hands of people who are doing and utilizing the technologies. So we hope in that time, if it requires new regulations, etc., we'll be able to keep abreast of that.

From a staff perspective, we've recruited a public servant with a strong background in scientific research as our chief science advisor.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Good. So that leads me to the next question.

You have a budget of $10 million, and 44 staff members--FTEs. In the absence of regulations, can you tell me a little more? In your brief you talked about what you were doing, but it would help provide clarity. Are there 44 people here, or are they across the country?

[Dr. Elinor Wilson]

Thank you for the question.

We have two offices. Vancouver is our head office, as determined by Governor in Council, and we have staff here in Ottawa as well. The staff in Ottawa are here because, as regulations are being developed by Health Canada, there is a need to work constantly with Health Canada to ensure that the regulations take into account any possible challenges around their implementation.

As regulations are being developed--for example, in the licensing of clinics area--we also have to develop the internal systems to be able to immediately start to receive applications from the field and issue licences as quickly as possible once the regulations are passed. One of the key activities in the last year and a half has been starting to build that system capacity, so the day the regulations are passed by the government we will have the application form for clinics to start to apply for their licences on our website

In the period leading up to the licensing activities, we have several other responsibilities in the area of outreach. In any regulatory program, the ability to reach out in the field to the parties that are going to be regulated is vital. You need their cooperation in order to regulate and ensure that people follow the rules and report as asked by the government.

So we have done considerable outreach with the medical and scientific community, as well as the patient community. The patient community needs to understand why the act was put in place and how it protects their health and safety. It's not there to get in the way of them being able to have families; it's there to protect their health and safety as they choose to use technologies to do so.

The third major area is producing information for the field. We've started on a major information exchange program. It is reaching patients and professionals, and hopefully it will soon start reaching younger people. We know that the age of pregnancy is increasing in this country, and obesity and STIs are continuing to increase, so there really is a need to educate younger people, prior to them even considering that they might wish to be parents, about some of the challenges in this area.

Those are some of the activities we've been doing.

[The Chair, Conservative, Joy Smith]

Thank you very much.

Now we'll go to our second round, with five minutes for questions and answers, starting with Dr. Bennett.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Thanks very much.

Although I would very much like to hear the horrible story from CIHR as to how you're having to deal with these cuts at a time when the Americans have put $25 billion into this, I think we just actually have to move on and hope we can be persuasive that this is a hugely important area of investment that needs to be rectified as soon as possible. So we'll just fight for more money for you, instead of hearing the horrible details of what you're having to do with less.

However, in the one area where the budget actually doubled, which is PMPRB, I just don't understand it, other than in terms of the conversation we had about the allegations of mandate creep and the idea that something happened in terms of a climate change or attitude about PMPRB, so that instead of just doing what the board was supposed to do--which was to allow for patent protection and ensure research and development and that the prices not be excessive--there seems to be a new approach, which is to ensure the prices are as low as possible, which then, I understand, creates great problems for our innovative companies to persuade their head offices to invest here.

I understand that the reason there are more hearings, which are the very expensive part of your work, is because not as many cases have been negotiated as in previous years, when there was viewed to be more flexibility, and that this explains the wild increase in your budget.

I also understand that instead of just regulating or trying to maintain a decent national average, you are now drilling down into the averages in hospitals, averages in communities, and you're actually doing a much more granular approach to your job than was intended in the original mandate of the board.

So even though you were able to obtain the money in the supplementary estimates last year, what it looks like on paper is that your budget is doubled. You said the compliance has changed by about 4%. I'm having trouble understanding why your budget is doubled when you're having trouble with compliance. Can you explain where you think the trouble with compliance is? Is it that the people aren't complying, or that your interpretation of compliance is different?

[Dr. Brien Benoit]

Dr. Bennett, we had a similar conversation three months ago, when I came the last time. You've obviously been well briefed by the innovative patent pharmaceutical industry in Canada, because the term “mandate creep” originates from a document that was provided to you last time we came.

[Carolyn Bennett, Liberal, St. Paul's, ON]

The Institute on Governance document.

[Dr. Brien Benoit]

The Institute on Governance document was paid for by Rx&D, was never published on the Rx&D website, was never published on the Institute on Governance website, and reflects ideas that are at least two years old. The thing was published in April 2008. We were provided with a copy in September 2008, which was supposed to be confidential, but obviously was distributed to members of this committee. I'm not going to defend that document, because it reflects the environment of at least two years ago.

Now, we've been going through a major guidelines revision process, and one of the objectives of it was to address many of the things mentioned in that IOG report. The term “mandate creep” is a total misnomer. We are regulated by the Patent Act, which hasn't changed since 1987. We are regulated by our regulations, which haven't changed since 1994. So for 15 years we have had the same rules to operate under. We're not the ones who have changed—they have changed.

[Carolyn Bennett, Liberal, St. Paul's, ON]

Who?

[Dr. Brien Benoit]

The industry, the pharmaceutical environment. The compliance rate in 2004 was something like 95%. It has now gradually drifted down, and you're going to see it in our annual report, to about 89%. You say it's only 5%, but that 5% may represent many companies, may represent many drugs, each one of which deserves its own investigation.

Now, the drugs in Canada—and you're going to hate to hear this—are the second or third most expensive in the world. Our industry is not suffering excessively. The highest prices in the world are in the United States, which has very few price controls. Recently we were second highest in the world. Now I'm told that we are probably the third highest in the world. We used to be right in the middle. We used to be at the median. We have seven comparator countries. I think you've heard about how this works. Now we are actually slightly higher than the median. We are slightly higher, so we are spending more on our drugs in Canada.

[Carolyn Bennett, Liberal, St. Paul's, ON]

But you're spending twice the budget you had before.

[The Chair, Conservative, Joy Smith]

Thank you, Mr. Benoit.

Mr. Brown.

[Patrick Brown, Conservative, Barrie, ON]

Thank you.

I have questions in regard to the PMPRB. We last had you here on February 2009. My concern at the time related to the 76% increase, and I had a few follow-up questions to ask. Your comments today lead to more questions.

You mentioned that there was 95% compliance in 2004. In 2007 the annual report said that 22 existing drug products were subject to a hearing, out of a total of 1,114 products. That compliance would be 98%, but you said it was going the other way. If compliance is going down, why was it 95% in 2004 and 98% in 2007? Am I reading those numbers wrong?

[Dr. Brien Benoit]

I have it before me here. In 2004, the compliance rate was 95.4%. In 2008 it's going to be down to 87.9%, so it's about 90% compliance. You're going to be getting the document soon.

[Patrick Brown, Conservative, Barrie, ON]

So it's gone down 10% in the last year. The 2007 annual report said it was 98%. So the compliance got better between 2004 and 2007, and then had a huge drop-off in the last year and a half?

[Dr. Brien Benoit]

I don't know where you're getting those figures.

[Patrick Brown, Conservative, Barrie, ON]

I'm getting them from your annual report, the 2007 PMPRB annual report, page 13.

[Dr. Brien Benoit]

In a hearing like this, I can't go looking at the papers every two minutes. Whatever the exact number is, the message I'm trying to convey is that there has been a gradual decline in compliance. This means that we're not the ones who are changing. A gradual decline in compliance means that we have to hire more staff to do the investigations. At the end of the investigations, we don't always find that the price is excessive, but we find that there's something that has triggered it. When we render decisions in our hearings, the pharmaceutical manufacturer is not always the loser.

The thing you have to take away from this is that there's a voluntary compliance. The industry has paid a lot of money back to the federal government, because they have realized that they were outside the guidelines. This amount of money, since the start of this board some 20 years ago, is more than $70 million.

[Patrick Brown, Conservative, Barrie, ON]

I guess what I'd like to see at some point, then, if it could be provided to the committee, is something showing where there has been a gradual decline. I'm looking at numbers that suggest otherwise, based on what we've been provided. Maybe the 2008 report will shed some light on that for us.

Previously there was a concern raised about patented pharmaceutical products for human use and new active substances that are entering the marketplace. Because of the increased volume, the PMPRB required additional funding. The note I have is that the 2007 annual report actually reveals that the number of products and active substances fluctuates on a yearly basis, but the trend remains consistent. If the number of new substances is actually consistent with previous years, what would be the motivation for an increase?

[Dr. Brien Benoit]

The number of new drugs requires a full, in-depth investigation right from the outset. However, don't forget that if you have 75 new drugs, last year you had 1,100. So now you have 1,200. The number of drugs that we are mandated to control is steadily creeping up. Each one of these drugs has to get a price review every year.