Health Committee on May 12th, 2009

[Dr. Brien Benoit]

Yes. When a patentee appeals one of our decisions to the Federal Court, rulings are rarely against us. We did get one negative ruling from the Federal Court concerning jurisdiction. It involved a drug being sold in Canada with limited distribution to specific patients. The case went on for several years. The party selling it never received a notice of compliance from Health Canada. The product was being sold in Canada at prices we considered to be excessive. We held a hearing, which was then appealed to the Federal Court, which did not rule in our favour based on a question of law. The case was then referred to the Federal Court of Appeal.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

How much of your budget is allocated to litigation?

[Dr. Brien Benoit]

About $2 million out of a total budget of a little over $11 million.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

With the new guidelines you will be releasing shortly—I believe you said that you held in-depth consultations with all interested parties—will you be needing less money to conduct investigations, go to court, and so on, because there is consensus around the new guidelines?

[Dr. Brien Benoit]

You have just summed up the goal of our consultations. We hope that, with the new categories and all of the changes to our guidelines, compliance rates will rise and we will have fewer investigations and hearings.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Will it be ready in June, as you told me in February?

[Dr. Brien Benoit]

The process will be finalized in June, and we will begin to enforce the new guidelines in January 2010. Mr. Malo, we really hope that the new guidelines will significantly reduce the number of appeals.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Perfect.

Ms. Watts, can you tell us why you have a two-year claims processing backlog? Is it because of poor planning when the commission and the program were set up? In your comments, you seemed to suggest that cases were a little more complicated than expected. Am I right in thinking that there was poor planning?

[Sharon Watts]

I hope not. In fact, the backlog is due only in part to the complexity of the claims we have received. The primary factor is the number of claims, which has doubled in the past five years. Before, we were getting about 200 claims for exemption per year, and suddenly, in the middle of our renewal program, we received 400 claims for exemption.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Was that not foreseeable?

[The Chair, Conservative, Joy Smith]

Thank you, Mr. Malo.

We'll now go to Ms. Wasylycia-Leis.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you, Madam Chair.

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

Thank you, Madam Chairperson, and thanks to all of you for coming back to our committee.

I want to go to the Patented Medicine Prices Review Board. I think we have lots of questions here. I know you've given some explanation for a doubling of the budget, but it sure doesn't seem to resonate with folks when they see brand-name drug prices going up all the time, drug prices skyrocketing, no controls at all. So I'd love further explanation on a doubling of the budget.

First, I'd like to start with your present mandate and how you're executing it, especially with respect to setting the maximum in terms of therapeutic class. When generic drugs come on the market, it doesn't seem that the brand-name drug companies actually reduce their prices to compete with the generic companies. So it means that the maximum price in the therapeutic class doesn't drop, and it means nobody is getting a break. We waited patiently all these years for the extended and extended again patent protection, and finally generics get a chance to go on the market and there's no change in the brand-name drug prices.

I want to know what you're doing to address the situation. Are you doing anything to restrict this high level of pricing to be only on new brand-name drugs—I know there aren't very many—or new patented drugs coming on the market?

[Dr. Brien Benoit]

Your comments are multi-pointed, I might say. I know you have an interest in the generics.

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

I have an interest in getting lower drug prices for Canadians, and we know patent protection has given drug companies a huge lucrative hold on the business, so we're trying to see what we can do to bring it down.

[Dr. Brien Benoit]

Well, you said the cost of drugs is skyrocketing.

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

Yes, we just had a study by the Canadian Institute for Health Information that was just reported in Parliament—a huge increase.

[Dr. Brien Benoit]

The amount spent on drugs in Canada--for you, as an individual Canadian citizen--is the second-highest in the world. The people in the United States spend I don't know how much. We spend roughly $900 per person in Canada on drugs of all kinds—not all prescription, not all patented.

Now, our mandate is to control the price of patented medicine during the 20 years that they are actually protected by patents. Once they go off patent, there's nothing that obliges the patented manufacturer to lower his price.

If he has generic competition, then he is going to lose market share. That's because in most provinces, in the provincial plans, there's mandatory substitution. It's not in all, but there's a lot of mandatory substitution. So if you're under one of the provincial drug plans and you go to your drugstore with your prescription and it says a brand name, the pharmacist is then authorized to give you the generic, which in most cases will cost less.

The only control we have, as the PMPRB, is over generics that have patents.

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

But you could allow new patented drugs to be priced in at the medium as opposed to the maximum, and that might help.

[Dr. Brien Benoit]

But if you have a breakthrough drug, I think the last time—

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

But you said there were very few, so--

[Dr. Brien Benoit]

They're very few, but the last time we talked in February, you referred to cancer drugs, for example. If you have a drug that's going to cure breast cancer and there's no competitor in Canada, there's nobody that does the same treatment, then we go to the median international—

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

I hear what you're saying, fine. But if the majority are not breakthrough, why aren't they coming in as a new patent at a medium price, as opposed to the maximum? Why aren't you doing something to offset that, so when the patent comes off there are some lower prices?

[Dr. Brien Benoit]

Madam, they will never get higher than the highest-priced competitor in the same therapeutic class. So if you have a new drug—

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

They'll never get lower.