Health Committee on March 27th, 2012

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

Yes. I want to make the most use out of the five minutes that I am given.

As I was saying, the magazine Protégez-Vous, which you no doubt are familiar with, did a study on the price differences between pharmacies for the same medication.

Alesse 28, which is a birth control pill, was selling for $22.15 per box in Gatineau and $17.50 in Quebec city. So there is quite a difference in the price. Nexium, which I referred to earlier, was selling for $70 in Gaspé and $89 in Montreal. So this would represent a difference of $230 per year for two patients living in two cities in Quebec. Synthroid cost $5.21 in Chicoutimi and $11.34 in Gatineau.

As the price of medication is always rising, the middle class winds up footing the bill.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

Can I have a point of order, please?

[The Chair, Conservative, Joy Smith]

Dr. Leitch.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

I apologize, but I thought the intent behind our committee discussion today was about drug shortages. The conversation you seem to be having, albeit we haven't made it to a question, is all about drug pricing. I wanted to make sure that we were staying on point.

This is a very important issue to me—drug shortages, that is—as is drug pricing, but they are separate—

[Libby Davies, NDP, Vancouver East, BC]

Excuse me, the agenda says “drug supply”. It's not up to you to determine—

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

No, I'm just asking a question. That's why I raised a point of order.

[Libby Davies, NDP, Vancouver East, BC]

Well, look under the standing order.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

On a point of order.

[Kellie Leitch, Conservative, Simcoe—Grey, ON]

I did. Thank you.

[The Chair, Conservative, Joy Smith]

Can I just remind you of the relevance, and go ahead with your question.

[Dany Morin, NDP, Chicoutimi—Le Fjord, QC]

I would like to make a point of order. All of the witnesses said that the price of medication is going down. As I mentioned in my preamble, the price of medication is going down, which leads to a drop in profits, a consolidation in the pharmaceutical sector and a decrease in production. That therefore responds to a point that was raised.

Before I let you respond to everything I have said, I would conclude by saying that it is the middle class that winds up paying the bill. As I said with respect to the increase in percentages, year after year, the middle class is paying more. Since the insurance company claims increase every year, these companies have to increase insurance premiums. It is truly the middle class that has to pay the price.

Given everything I have just said, could you comment on the shortage resulting from this reality.

[Russell Williams]

Thank you very much. I may have to meet you after this meeting in order to answer all of your questions.

The cost of medication...

[The Chair, Conservative, Joy Smith]

Unfortunately, you only have 30 seconds left, but I'm going to stretch that out. We stopped the clock during the other discussion.

If you could answer as best you can....

[Russell Williams]

You have given me quite a challenge, but thank you all the same.

The PMPRB, the national body that monitors the price of medicine, has shown that the price of brand name drugs has decreased over the past two years whereas the cost of generics has gone up, and this is because of the use we make of these drugs. That is a simple fact.

Moreover, if you really want research to happen, you have to take other risks and invest more than $1 billion in order to discover new medication. You have to be able to recover this money in order to reinvest yet again in research.

[The Chair, Conservative, Joy Smith]

Thank you, Mr. Williams.

We will now go to Mr. Lizon.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Thank you very much, Madam Chair.

I would like to thank the witnesses for coming here this morning.

I would like to direct my question to HealthPRO. Once a drug product is approved by Health Canada, manufacturers and purchasers are free to enter into a commercial contract for supply, including establishing the terms of these contracts. You are uniquely situated in a drug supply chain to communicate with both the drug makers and the customers, such as provinces and territories, in drug supply.

Can you explain why it is that drug purchasers and distributors have come to rely on a single source of suppliers of medically necessary drugs?

[Kathleen Boyle]

Within our contracting process we follow the rules of agreement on internal trade. We follow any provincial rules that govern competitive bidding. Certainly, in the past, I think it was quoted by the minister in B.C. that pricing has been a very big part of the focus of going to market and using competitive bidding to get pricing for hospitals that is fair, competitive, and within the rules and regulations. We have been using this process for years. It has only been recently, when we noticed an awful lot of shortages two to three years ago, that we recognized this traditional process with the full focus on price was no longer satisfactory.

In our contracting process we are obliged to post what we call our weighting criteria, which is what's important to us and how decisions are made. In this round of contracts we introduced a new section in our weighting criteria, which was assurance of supply. We reduced the importance of price. We reduced the importance of product quality and safety. We introduced, which is up to a 20% factor, a focus on drug shortage and a supplier's ability to supply the product in the marketplace. We did change our focus away from just price and quality to include this other significant aspect, which is actually getting the drug to the patient. It doesn't matter how safe, efficacious, and cheap it is; if the patient can't access it, it's of very little value.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Can you, or if you haven't, why didn't you, recommend a backup plan for other suppliers?

[Kathleen Boyle]

Within our contracting process on backup supply, a supplier who is under contract, who is committed to supply, is responsible for any differential in cost that a participating hospital might incur if that supplier cannot provide a product. If it comes to a single-source supplier, so only one supplier is available in the market, those are not things that we have control over in our contracting process.

The decision for a supplier to discontinue and to exit the Canadian market is not something that has been within our control.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

To go further, who has control over that? As we heard from several presentations, there may be an occurrence, like a natural disaster, that would cause a great disruption in the production of medically necessary drugs. You're saying you have no control over it, and on the other hand there are no safeguards in existing contracts to protect patients and the Canadian public. What are your recommendations? Who has the power to do it? If you have no control over it, who has control over it?

[The Chair, Conservative, Joy Smith]

Just 30 seconds, I'm sorry.

[Kathleen Boyle]

The control we have is that going forward we will be awarding to more than one supplier where there is more than one supplier available in the market. Further than that, I believe it's the role of government if there needs to be regulation to control the exiting of suppliers from the marketplace.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Isn't your—

[The Chair, Conservative, Joy Smith]

I'm sorry, Mr. Lizon, your time is up.

Dr. Sellah.

[Djaouida Sellah, NDP, Saint-Bruno—Saint-Hubert, QC]

Thank you, Madam Chair.

Thank you to all the witnesses who are here.

In my eyes, as a doctor, it is clear that we have a very significant problem. I have two questions and the witnesses should feel free to respond to them.

First of all, why was it the FDA that raised the alarm bells regarding these facilities that don't meet health criteria? Are American standards more exacting, stricter than Canadian standards?

Secondly, let's look at the situation in other countries. We know that the United States has a law, referred to as the Preserving Access to Life-Saving Medications Act, which compels drug manufacturers to inform, without delay, the FDA of any incidents that could cause a drug shortage, once the decision has been made to cap or halt the production of drugs. In New Zealand, pharmaceutical manufacturers have a contractual obligation to inform the Pharmaceutical Management Agency of New Zealand, which is an independent crown corporation reporting to the Department of Health, when stocks fall below the two-month supply level or they become aware of a possible shortage.

Do you believe that Canada should intervene in a similar fashion? What would be the impact of such a law on our system? Instead of having a voluntary reporting system, do you not think that we should have a mandatory reporting system here in Canada?

Thank you.