Thank you, Madam Chair.
Thank you for inviting me to appear before the committee.
CADTH is a not-for-profit corporation funded primarily by Health Canada and all the provinces and territories, with the exception of Quebec.
We are a health technology assessment agency. This means that we provide independent evidence-based assessments of the clinical effectiveness and cost-effectiveness of pharmaceuticals, diagnostics, and medical, dental, and surgical devices and procedures. We do not make the final decisions on what technologies will be funded by health ministries; however, our work informs technology-related decision-making.
The Canadian Agency for Drugs and Technologies in Health, CADTH, provides a range of services to support the effective management of pharmaceuticals and other health technologies in Canada.
The common drug review program supports coverage decisions by 18 of the 19 publicly funded drug plans in Canada. We do therapeutic class reviews on pharmaceuticals and conduct optimal use projects that encourage the appropriate prescribing and utilization of drugs and other health technologies.
CADTH's Rapid Response Service addresses urgent jurisdictional needs for information that informs policy and practice decisions about drug and non-drug technologies.
The agency also does large health technology assessments when warranted. For example, last year, we did a major review of robot-assisted surgery.
Finally, our horizon scanning products alert decision-makers to new and emerging health technologies that are likely to have an impact on the delivery of health care in Canada. As part of this service, CADTH also provides environmental scans of different health care issues, practices, processes, and protocols inside and outside of Canada.
That brings me to why the committee asked me to appear today. In March 2011 CADTH published an environmental scan on drug supply disruptions. The scope of this report is a bit beyond our normal mandate, as CADTH is not involved in pharmaceutical procurement or the drug supply chain. However, as the drug shortage issue was becoming more prominent, Health Canada asked us to provide them with some background information on this issue. The report we produced is publicly available on our website, and a copy of the report has been distributed to committee members. This document was referenced in the House of Commons on March 12 during the emergency debate on drug shortages.
I will now provide a brief overview of our findings on drug supply disruptions as presented in that report.
First, I want to be clear that CADTH's environmental scans are not comprehensive, systematic reviews. Typically they are very time sensitive, so the information is based on limited literature searches and personal communications. They are meant to be informative, but are intended to be considered along with other types of information.
Many factors can influence the occurrence and severity of drug shortages.
Shortages of the raw materials required to make drugs contribute to drug shortages and are believed to be particularly problematic when an active ingredient is obtained from a single raw material supplier.
Manufacturing issues may create or contribute to drug shortages; for example, quite often multiple products are produced on the same equipment, which means that an increase in production of one product will result in a delay in production of another. There can also be temporary or permanent discontinuation of products as manufacturers shift production or reallocate resources. There can be numerous other problems associated with production.
Business decisions by manufacturers can also lead to drug shortages. For example, company mergers can be a way to create internal efficiencies in response to economic downturns, patent expirations, or a lack of new products in the pipeline; however, when companies merge, less profitable product lines are often reduced or discontinued, and sometimes manufacturing facilities are closed. Mergers of companies with similar product lines can lead to product consolidation, possibly resulting in changing a multi-source product into a single-source product, and single-source products are the most vulnerable to shortages.
Another major factor is the reluctance by manufacturers to provide advance warning of potential disruptions. This can magnify the impact of a shortage.
Purchasing and distribution issues can also play a role in drug shortages. For example, the use of just-in-time inventory control practices that involve keeping minimal supplies of drugs in stock at all levels of the supply chain can result in an overall reduction of readily available drug inventories.
Strict enforcement of good manufacturing practices and other related regulations by drug regulatory bodies can also play a role in drug shortages.
Madam Chair, these are just some of the many factors that contribute to drug supply disruptions identified in CADTH's environmental scan.
The causes of drug shortages in Canada are believed to be multifactorial. It is difficult to determine the extent of drug shortages in Canada because manufacturers are not required to report disruptions in drug supply and because there is no single accountable Canadian organization that provides system-wide drug distribution oversight.
The current drug supply issues underscore the need for greater transparency in the system as well as for strategies at every level of the drug supply chain that help minimize disruptions to patient care.
Let me now briefly present a potential option for CADTH, should we be invited by the provinces and territories to play a role in managing future drug shortages.
CADTH is both a producer and a broker of evidence-based assessments of health technology. We are a credible and independent source of information. We have the skills and processes available to produce drug substitution advice, and we can broker such advice created by others. Because of our skills in searching, accessing, analyzing, and publishing evidence-based clinical information, we have an ability to be a central source of information relevant to a drug shortage.
The role that CADTH might be able to play could best be summarized as a clearinghouse of shortage information and relevant substitution advice, and perhaps to provide a link to currently available databases and information sources. Information from CADTH could be used to supplement local efforts and to support clinical decision-making at the patient-clinician interface.
We are currently exploring this potential role with our board of directors, with senior federal, provincial, and territorial officials, and with other stakeholders.
Madam Chair, thank you for allowing me to present to you today. I welcome any questions that you may have.