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Evidence of meeting #38 for Health in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was shortages.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Brian O'Rourke  President and Chief Executive Officer, Canadian Agency for Drugs and Technologies in Health
Jeff Poston  Executive Director, Canadian Pharmacists Association
Joel Lexchin  Professor, School of Health Policy and Management, York University, As an Individual
Jeff Morrison  Director, Government Relations and Public Affairs, Canadian Pharmacists Association
Paul Glover  Assistant Deputy Minister, Health Products and Food Branch, Department of Health

9:20 a.m.

Conservative

Kellie Leitch Conservative Simcoe—Grey, ON

It went from there to private ownership.

We can beg to differ on that. I'm happy to have the discussion about it, but it was generated by the University of Toronto. It was not a federal government entity, so....

9:25 a.m.

Conservative

The Chair Conservative Joy Smith

You still have two minutes, Dr. Leitch.

9:25 a.m.

Conservative

Kellie Leitch Conservative Simcoe—Grey, ON

Sure.

I wanted to ask you a little more, Dr. Lexchin, on one of the issues you brought up with regard to your recommendations.

My general impression is that you believe that it's the role—and I'm just asking for a specification on this—of the federal government to make the decisions with respect to pharmaceuticals and which hospitals receive them under what circumstances?

When I stand in the OR—and I mentioned this last week to those at the CMA—I don't pick up the phone and call the Minister of Health when I run out of a drug. I think you probably don't do that in the emergency department when you have a challenge. Could you outline your understanding of what happens when you have that shortage in your emergency department? Who do you go to in your institution to try to rectify that?

9:25 a.m.

Professor, School of Health Policy and Management, York University, As an Individual

Dr. Joel Lexchin

Actually, we were discussing this yesterday at the pharmacy and therapeutics committee meeting of the University Health Network.

They try to plan in advance for what they know about shortages coming down the pipeline. If they have anything less than a one-month supply of product, they consider that there may be a potential shortage, so they go looking for alternative suppliers. If they can't find alternative suppliers, then we come up with a plan of what we can substitute for drugs that may be in short supply, or we ask departments in the hospital that are heavy users of those products to consider limiting them or switching to alternatives.

9:25 a.m.

Conservative

The Chair Conservative Joy Smith

Thank you, Dr. Lexchin.

Now we'll go to Dr. Fry.

April 3rd, 2012 / 9:25 a.m.

Liberal

Hedy Fry Liberal Vancouver Centre, BC

Thank you very much, Madam Chair, and thank you all very much for coming today and expanding on this topic so that we can understand the many factors bearing on the situation we find ourselves in at the moment.

I was going to ask Dr. Lexchin about Connaught, but I think some of us are going to do some research on it and see. In fact, I think I remember that Connaught, if not government owned, was overseen by a public agency of the government at some time, in the same way, as you said, Air Canada was. I think there was a public component to it at some time.

This is something many people meeting with me have talked about. It's the concept, the idea, of looking at it. You cannot force a private company to make a drug. There's absolutely no way any government can do that. However, is there a way the government will have to belly up to the bar and look at finding a way to make sure that the absolutely necessary drugs for patient health and well-being are going to be accepted?

I just wanted to ask a couple of things. I'd like to go to Dr. Poston.

You've mentioned the U.S. Food and Drug Administration a couple of times. You mentioned that if we're looking at a global shortage, it might be worth our while—and I agree with you, actually—to start building blocks of people who can come and find solutions, either proactively or otherwise. The federal government and the U.S. Food and Drug Administration working together is a good idea.

Can you tell me, or can you flesh out for me, what exactly the U.S. Food and Drug Administration does to ensure that a shortage doesn't come and hit them between the eyes? How do they try to be proactive and prevent this from going on? I know that they take a very proactive role and I know that President Obama has actually pushed them to do even more. Can you just tell me what they do?

9:25 a.m.

Executive Director, Canadian Pharmacists Association

Dr. Jeff Poston

I'll start, and Jeff can perhaps add some stuff, because he met recently with the FDA.

There are a couple of things. For a number of years, the FDA had a position very similar to Health Canada's. They were not, historically, necessarily that proactive with respect to drug shortages. However, drug shortages have probably been a bigger issue in the United States than they've been in Canada, so there really was a need.

Like Health Canada, the FDA's responsibility was regulating drugs that came to market, but they took this additional role on in response to hospital pharmacists starting systems in the U.S. to address drug shortages and health care. They got the FDA involved in doing that. They have recently, as you said, as a consequence of a new executive order from the President, had more authority, and they have added some staff to do it.

Jeff, you might want to add to that.

9:25 a.m.

Director, Government Relations and Public Affairs, Canadian Pharmacists Association

Jeff Morrison

Yes. I had a great conversation with the acting director of compliance in the FDA, and I asked that exact question: “What do you do?” The FDA claims that in 2011 they alleviated roughly 190 to 195 shortages, so clearly they're doing something right.

What they said is that when they're alerted to a shortage—and they indicated that there's a high level of trust between manufacturers and the FDA—they essentially go through a four-step process.

Step one is to speak with domestic producers that have the capability to increase capacity for whatever drug is in short supply and to essentially request that they increase production.

Step two is to look at the drugs that are essentially in the approvals queue. They'll bring any drug that could be deemed an equivalent or an alternative to the drug in short supply to the top of the line; they'll expedite that particular drug.

Third, they'll talk to domestic producers that do not have the capacity to ramp up production and ask them if they could put that capacity in place.

Fourth, they'll look at foreign suppliers and issue the proper importation permits for foreign supply, again, of whatever drug.

They've indicated that as a result of this very proactive approach that they take, they've been able to alleviate roughly 190 shortages in 2011.

9:30 a.m.

Liberal

Hedy Fry Liberal Vancouver Centre, BC

Thank you very much, Mr. Morrison.

Madam Chair, with your permission, I want to say that we have just researched this, Dr. Lexchin, and this is what we found: Connaught had grown under the university, but by the late 1960s, it became obvious that it was inappropriate for a university to own what had become a commercial enterprise. Because the federal government was concerned that this unique commercial concern should remain in Canadian hands, the Canada Development Corporation purchased it in 1972.

Do I have any more time, Madam Chair?

9:30 a.m.

Conservative

The Chair Conservative Joy Smith

You do. You have about a minute and a half.

9:30 a.m.

Liberal

Hedy Fry Liberal Vancouver Centre, BC

Thank you very much.

I know that there is a misunderstanding about drug shortages. A lot of people think that they happen in the OR or the ICU and emergency rooms constantly, but we know, as you touched on a little bit, about simple drugs, old drugs such as Stemetil. It was one of the old drugs that was effective and that obviously is not cost-effective to make anymore.

This links to Dr. Lexchin's question. If it isn't cost-effective to make it anymore, but these drugs, many of them oral drugs, are absolutely necessary, is there anything one can do, short of going back to a Connaught model, to help make sure that those drugs are there?

9:30 a.m.

Executive Director, Canadian Pharmacists Association

Dr. Jeff Poston

I think you see provincial governments doing that to a certain extent. On provincial formularies there are a number of single-source generic drugs that get treated with what's called exemption status, or something like that. They're not necessarily subjected to the price regulation scheme that the province may have in place that determines listing on formularies, so there's a certain amount of discrimination in favour of a particular generic formulation.

I think what we see illustrating that as well is that just addressing the price of a particular drug in the marketplace isn't necessarily enough to prevent shortages, and that points to the multifactorial nature of the problem. The biggest issues are global. A manufacturing problem in one country you can perhaps fix, but if you have a global shortage of an active pharmaceutical ingredient, that's a major problem, because no one can make the product if for some reason the source of supply of the active pharmaceutical ingredient has failed.

It points to the need for activity in terms of market incentives and disincentives. We need action around regulatory issues—

9:30 a.m.

Conservative

The Chair Conservative Joy Smith

Thank you, Dr. Poston.

Mr. Strahl is next.

9:30 a.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Thank you very much, Madam Chair. Thank you to the witnesses for providing us with your expertise this morning.

I wanted to discuss the actual motion that we're here to discuss, and I know we talked about it briefly at the beginning of the meeting. It is to examine “the role of government and industry in determining drug supply in Canada, how the provinces and territories determine what drugs are required in their jurisdiction, how the industry responds to them, and the impact this has on stakeholders.”

I know we've certainly talked about the role of government and industry. I don't know that we've talked as much about how the provinces and territories determine what drugs are required and how the industry responds, etc.

We know that the provinces and territories are responsible for the management, organization, and delivery of health services for their residents and that they have the primary responsibility for health care delivery, including which drugs they buy and how they source them. That's what I want to talk about.

Mr. O'Rourke, you talked about strategies to minimize the impact on patients. Sorry, I'm paraphrasing there. What are your views on the sole-sourcing of contracts, and if provinces are going to sole-source the contract, what role do you think they have in ensuring that there is some sort of backup plan?

9:35 a.m.

President and Chief Executive Officer, Canadian Agency for Drugs and Technologies in Health

Dr. Brian O'Rourke

I think that's an extremely important concept. Sole-sourcing is probably one of the key factors associated with the Sandoz shortage, whether it was the provinces themselves or the group purchasing among all of the hospital groups across the country that led to it.

I will refer to one of the countries that we put in our report, New Zealand. It has a central agency in place for the management and purchasing of pharmaceuticals. They have some very strict penalties in place for companies that do not provide a critical product, or that run out of it.

I certainly believe that some backup plans need to be in place. It could be by identifying the critical agents that we really do need to have additional information or additional backups for, and/or some system whereby we can look at a more competitive market or for another source of that product.

9:35 a.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

In the testimony this morning, we also heard that in these contracts the provinces often have penalties for interruption of supply, but they're not enforced. Can you explain to me how that happens? Why would the province not exercise the contract, and why do they not go after the suppliers if they fail to supply the product?

9:35 a.m.

President and Chief Executive Officer, Canadian Agency for Drugs and Technologies in Health

Dr. Brian O'Rourke

I really wouldn't have an answer to that. I'm not involved with the purchasing.

9:35 a.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

It's very interesting to hear that. Hopefully through this committee, perhaps some provincial agencies will be compelled to respond to that.

I also wanted to talk about your indication that the generic drug market appears to face more shortages than the brand name market. Can you identify why you think that is? Also, what policy ramifications do you think that has as we consider the balance between generics and brand name pharmaceuticals? What does that tell us going forward, if there are more shortages on the generic side than the brand name side?

9:35 a.m.

President and Chief Executive Officer, Canadian Agency for Drugs and Technologies in Health

Dr. Brian O'Rourke

That is a tough question to have a simple answer to.

We have a complex market in Canada for pharmaceuticals, what with the provincial and federal responsibilities for regulation. The provinces and territories are responsible for the public drug plan, and there are commercial pharmacies as well as free-market pharmacies. To have one system that looks after the management of all of those key players would be very challenging.

Certainly some of the policies we've seen implemented over the last number of years regarding generic pricing have probably played a role. Some business decisions by manufacturers have come into play. They have at times wondered whether there was any value in continuing to make a certain product. There have been decisions from some of the brand name companies on whether they would make a product in a generic version. These decisions would probably be made globally, as opposed to in Canada, so it's all very challenging.

I think there probably are some balances we need to strike in our pricing policies as well as on the supply-and-demand side of it.

9:35 a.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Are you aware of any provinces or purchasing groups that have indicated a willingness to cede their authority to the federal government to perform that role?

9:35 a.m.

President and Chief Executive Officer, Canadian Agency for Drugs and Technologies in Health

9:35 a.m.

Conservative

Mark Strahl Conservative Chilliwack—Fraser Canyon, BC

Dr. Poston, the FDA system was referenced as perhaps being superior to our own. Certainly, it has done well in addressing shortages. Nevertheless, we also heard that President Obama felt compelled to give an executive order to do whatever it takes to provide necessary drugs. They also were experiencing a shortage.

Is the relationship between the FDA and the manufacturers voluntary, or are the companies mandated to provide all of that information? How regulated is that relationship?

9:40 a.m.

Executive Director, Canadian Pharmacists Association

Dr. Jeff Poston

I don't think it's regulated as such. Is it, Jeff?

9:40 a.m.

Director, Government Relations and Public Affairs, Canadian Pharmacists Association

Jeff Morrison

There are currently bills before the Senate and, I believe, the House that would mandate or regulate that relationship. At present it is primarily a voluntary relationship that's been built up over several years. With respect to the presidential order last year, it allowed the FDA to staff up. It increased the resources they had available to take on that proactive role.

The executive also issued investigative powers to the FDA to deal with the grey market and the price gouging that's been occurring in the U.S. as a result of this shortage. This is more a U.S. problem than a Canadian one.

9:40 a.m.

Conservative

The Chair Conservative Joy Smith

Madame Quach is next.