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Evidence of meeting #36 for Health in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was market.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Jim Keon  President, Canadian Generic Pharmaceutical Association
Russell Williams  President, Canada's Research-Based Pharmaceutical Companies (Rx & D)
David Johnston  President and Chief Executive Officer, Canadian Association for Pharmacy Distribution Management
Kathleen Boyle  Vice-President, Services, HealthPRO Procurement Services Inc.
Michel Robidoux  President, Sandoz Canada, Canadian Generic Pharmaceutical Association
Mark Ferdinand  Senior Director, Health and Economic Policy, Canada's Research-Based Pharmaceutical Companies (Rx & D)
Michael Blanchard  Clinical Director, Pharmacy Services, HealthPRO Procurement Services Inc.
Jeremy Desai  President and Chief Operating Officer, Apotex Inc., Canadian Generic Pharmaceutical Association

9:55 a.m.

President, Sandoz Canada, Canadian Generic Pharmaceutical Association

Michel Robidoux

We worked with HealthPRO to help identify which of the 235 different presentations were going to be the most important for us to keep in our production schedule. At the same time, we rapidly identified additional sources of supply around the world.

We were pleased to announce three weeks ago that we filed with Health Canada 15 new submissions on current products that are being manufactured in Boucherville that we will be able to bring to Canada from an alternate source.

Upon receiving our notice of compliance from Health Canada, we will be able to bring an additional supply that will truly help us in our product mix to ensure that additional supplies are being distributed to hospitals.

9:55 a.m.

Conservative

The Chair Conservative Joy Smith

I am sorry, but our time is up now.

Thank you, Mr. Robidoux.

We'll now go into our five-minute Q and A. We'll begin with Madame Quach.

9:55 a.m.

NDP

Anne Minh-Thu Quach NDP Beauharnois—Salaberry, QC

Thank you.

I would like to thank all of the witnesses who have come here today to provide us with information, advice, solutions and explanations regarding the reasons for the shortages, in particular. This is a topical issue. As many stakeholders have stated, this problem is becoming more and more serious as the years go by. I feel it is therefore somewhat unfortunate that people are trying to point a finger at some stakeholders in particular. I believe that this problem involves the entire system, and as several people have already said, all stakeholders, the various government levels and industry need to cooperate so that we can put the interests and needs of patients foremost. This is extremely important.

We have been told that the reporting requirements were problematic, but we also heard that certain suppliers had a monopoly and that there was a need to diversify sources of supply. Have you got any models or examples from other countries? Sweden comes to mind, where the government has a public supplier that provides 2% of the system's essential drugs.

Could the federal government offer incentives to encourage new secondary manufacturers, so that we do not have to rely on one provider of essential drugs? Should Health Canada and the Minister of Health be giving greater consideration to this alternative?

Moreover, we have seen that the voluntary reporting system currently in effect does not work very well. I have spoken to several local stakeholders, in Quebec. They told me that they did not really consult this site. In your opinion, is this because the system is not sufficiently effective, is it because people do not know about it, or is it because the information provided is neither relevant nor timely?

In mid-March, we unanimously adopted a motion calling upon the federal government to take initiatives in consultation with the provinces. What more can we do? Clearly, we need to take action at the federal level. But in terms of concrete action, what can we do to help people and patients feel secure about their medication?

10 a.m.

Conservative

The Chair Conservative Joy Smith

Who would like to take that?

Mr. Williams.

10 a.m.

President, Canada's Research-Based Pharmaceutical Companies (Rx & D)

Russell Williams

I can at least begin. Thank you for asking this very complex question. You are quite right in saying that the solution...

10 a.m.

Conservative

The Chair Conservative Joy Smith

Just to let you know, when you start with a complex question, you have two minutes to try to compress your answer. I want you to get in everything you want to say, so we'll begin again.

Thank you.

10 a.m.

President, Canada's Research-Based Pharmaceutical Companies (Rx & D)

Russell Williams

Thank you.

With respect to your question about diversifying sources of supply, this morning I heard that HealthPRO was going to make a suggestion. Perhaps this may be a model that we could use. At the federal level, we have worked on the vaccination file in the past. That may offer a solution. There is not only one winner, only one supplier. We can share. I am convinced that we need more than one supplier. Considering everything that we will be posting on our site, we will perhaps be informed earlier about upcoming problems, but if we do not consider a solution offering various choices, I think that the problem will persist. That is my initial reaction.

Moreover, we are starting to see some useful information on our site—for example, the name of the products, the related problems, the dates, etc.—and I think that is effective. The task force is in the process of doing this. If there is another way of improving access, so that the site is more user-friendly and used, that would be good. We are prepared to make changes. Regardless of what the case may be, I think that the first solution must be to have a bilingual site throughout Canada and, as far as that is concerned, we are on the right path. I think to that we will have to come up with other solutions and find other suppliers so that we can resolve problems that occur in the future faster.

March 27th, 2012 / 10 a.m.

Michael Blanchard Clinical Director, Pharmacy Services, HealthPRO Procurement Services Inc.

The site is new to pharmacists and doctors. It is being developed. We are working primarily on information required by doctors, particularly with respect to treatments and available choices. This aspect needs further development.

10 a.m.

NDP

Anne Minh-Thu Quach NDP Beauharnois—Salaberry, QC

What can the federal government do?

10 a.m.

Conservative

The Chair Conservative Joy Smith

I'm sorry, we've gone over time.

Mr. Gill.

10 a.m.

Conservative

Parm Gill Conservative Brampton—Springdale, ON

Thank you, Madam Chair, and my thanks to the witnesses for coming here today and for the presentations.

My question is for the Canadian Generic Pharmaceutical Association. The official opposition, the NDP, have been insisting that we act in what are traditionally provincial and territorial jurisdictions. The NDP wants to control the cost of generics. My understanding is that Health Canada sets the price ceilings for patent drugs, not generic drugs.

Could you describe how the prices of generic drugs are determined?

10 a.m.

President, Canadian Generic Pharmaceutical Association

Jim Keon

There are two different systems: one for the retail pharmacy pricing and the other for the hospital pricing. With hospital pricing, prices are determined essentially by a tendering system and negotiations with the large buyers and other health care suppliers such as HealthPRO. That is a true marketplace price as a result of that bidding, and we've had several comments about whether there are several suppliers or whether it's just winner take all. So in the hospital market, it's a tendering system.

In the retail market, generic drug prices are subject to provincial regulation. For example, the government in Ontario has changed the regulation on generic pricing twice in the last five years. Starting in April, if you want to be listed on the Ontario formulary, you can charge no more than 25% of the equivalent brand-name product. They have some rules for exceptions if costs are higher. Pricing is set by provincial regulation. Ontario tends to be the leader. Quebec has a rule they call “the best available price rule”. Quebec will not pay any more than any other province. Then you go across the country with various pricing systems.

For the manufacturers who are trying to sell nationally, it tends to be a complicated system. It's like dealing with 10 different countries. But generic drug prices are regulated provincially.

10:05 a.m.

Conservative

Parm Gill Conservative Brampton—Springdale, ON

Can I ask why you did not give advance warning about these drug shortages? Would your organization be willing to give an advance warning, say, of six months for these drug shortages in the future?

10:05 a.m.

President, Canadian Generic Pharmaceutical Association

Jim Keon

We have been working with the multi-stakeholder group—which includes doctors, pharmacists, hospital groups, manufacturers, and wholesalers—to put in place the most useful reporting system. We have developed information. Our members are all participating in it. They are all supplying the information. We recognize that there have been two websites: one in Saskatchewan and one in Quebec. That's why we've worked with Rx&D and others to put together one national website. It includes current and anticipated shortages. Our companies are all participating in this and providing information, and it's now available to everyone.

10:05 a.m.

Conservative

Parm Gill Conservative Brampton—Springdale, ON

This industry is worth billions of dollars, and I have a difficult time understanding how we were not able to foresee what was coming with regard to these shortages. What with the billions of dollars that are spent in this industry, you would think that your organization and the companies would be able to use their market research to forecast future needs. Honestly, I'm very disappointed that no one was able to see this coming.

10:05 a.m.

President, Canadian Generic Pharmaceutical Association

Jim Keon

I think you heard from Sandoz about the history of their situation.

In regard to some of the shortages, I think I might ask Dr. Desai to respond.

10:05 a.m.

Conservative

The Chair Conservative Joy Smith

I am sorry, our time....

I've been waiting to hear the answer to Mr. Gill's question: would you be willing to put in a six-month warning for people? I didn't have that answer. Yes or no, sir?

10:05 a.m.

President, Canadian Generic Pharmaceutical Association

Jim Keon

Our companies are providing anticipated shortages. If they know six months in advance, they would do so. Often, unfortunately, they do not know that.

10:05 a.m.

Conservative

The Chair Conservative Joy Smith

Thank you.

Dr. Morin.

10:05 a.m.

NDP

Dany Morin NDP Chicoutimi—Le Fjord, QC

Thank you very much, Madam Chair.

First of all, I must tell you that I am really pleased with what you said earlier about the fact that witnesses must answer questions, and, accordingly, the support you gave to Ms. Leitch, who interrupted Mr. Robidoux several times.

I recall that the Minister of Health came here twice. At that time, the opposition parties wanted to obtain answers to their questions and you prevented us from responding. We recall very clearly what happened: you told us to give her time to respond and as a result, she used up all of our five minutes.

So I am therefore expecting you to use the same procedure the next time that the Minister of Health comes here before the committee.

10:05 a.m.

Conservative

The Chair Conservative Joy Smith

Do you have a question, Dr. Morin?

10:05 a.m.

NDP

Dany Morin NDP Chicoutimi—Le Fjord, QC

Yes.

My question is for Mr. Williams. You talked about the price of medication. As you said, and as we know, the price of medication goes down as a result of the price of generics. Large corporations have merged and only the most profitable remain.

Moreover, I would like to raise an interesting point regarding the price of medication for consumers. Since the early years of 2000, the average expenditure on medications per person was $329. Nine years later, this figure had more than doubled and the average was $736.

Despite the fact that drugs may be generating less profit, the demand is, nevertheless, growing throughout the country and particularly in Quebec. Quebeckers and Canadians are therefore spending more of their income on medication. I had cited the figure of $736 for 2009. This is an increase of 5.4% compared to 2008. Once again, we can see that the pharmaceutical sector is doing very well financially.

I am going to discuss some more specific numbers from 2009. On average, an individual taking Lipitor to reduce blood cholesterol levels will pay $800 per year. That amount represents a sizable amount of his income. In the case of Remicade, used to treat rheumatoid arthritis, the cost is $32,000; Effexor, used to treat depression, costs $450; and Nexium, used to prevent ulcers, costs $800 per year. So these patients have to pay large amounts of money.

There is another issue that worries me and also concerns consumers. We know that the hospitals pay a fixed price. However, when people go through their private insurance companies to pay for their medication, there is a large discrepancy in the price. The magazine Protégez-Vous, which you are no doubt familiar with, did an investigation in 2010 on the various prices charged by pharmacies for the same drug.

10:10 a.m.

Conservative

The Chair Conservative Joy Smith

Dr. Morin, you're speaking too quickly for the interpreters.

10:10 a.m.

NDP

Dany Morin NDP Chicoutimi—Le Fjord, QC

Thank you for correcting me.

10:10 a.m.

Conservative

The Chair Conservative Joy Smith

Can you slow down just a little bit?