Thank you very much, Madam Chair and members of the committee, for this opportunity to share with you my observations about the evaluation of innovation in Canada. l'm going to describe a few of my own experiences, and emphasize three main points.
I want to make it clear that my views are my own. They do not necessarily reflect the views of the people with whom I work or the organizations for which I work. Most of my health technology or HTA policy experience has been in the area of cancer drugs. However I feel my observations can be generalized beyond just cancer and beyond just drugs.
My perspective has been influenced by my career as a health economist. In the beginning, I worked as a university professor in an ivy-covered tower. Okay, it wasn't really ivy covered, and it wasn't a tower, but it was a two-storey building far away. I had brushes with relevance, but it wasn't until the second stage of my career, when I got involved in applying health technology assessment or HTA tools in the real world, that I became aware of some of the issues I'd like to share with you today. Currently, I'm working on using these tools that we develop in HTA to help policy advisers, decision-makers, and the system that would implement new innovation.
There are three main points I would like to leave you with today, and they are quite simple. The first one is that there's not enough money to pay for everything people want their health care system to provide. Because there is a scarcity of resources, there is a need to make hard decisions about what will be funded and what won't be. As a result, there is a need for tools to help people with funding recommendations, decisions, and implementation.
The second one is that different stakeholders will have different opinions about what the problem is, and what tools are needed.
The third and last one is that if we decide we are going to facilitate innovation, we must also facilitate the creation and implementation of the tools necessary to handle the subsequent challenges. Before going on a shopping spree, we should build capacity in the area of smart shopping practices.
Three years ago the executive officer of the Ontario public drug programs of the Ministry of Health invited me to present to the Ontario Citizens' Council. They were being asked to provide their views on expensive innovative drugs for rare diseases. My job was to provide some insights from health economics.
To explain to the Citizens' Council why we could not pay for all new drugs, l introduced the analogy of a suitcase. The suitcase is the health care budget, and the contents are the treatments we pay for. Because the suitcase is not infinitely large, we eventually run out of room if we say yes to everything. In fact we would run out of room even if we only said yes just to the products that Health Canada said were safe and effective.
If we want to put something in the suitcase, and it is already full, we have two options. One is to buy more space by increasing taxes or taking money from education or social services. Alternatively we can take something out of the suitcase to make room.
I think the Citizens' Council understood the need to make sure we packed our health care suitcase wisely. To do this you need the right tools that will help you because the capacity to make and use these tools is lacking right now. I'd like you to consider that the need for these tools will be even greater if we hasten the adoption of technology.
Innovative technology faces a variety of reimbursement challenges along the HTA process. After Health Canada decides something is safe and effective, the product can be sold in Canada. However if it's an expensive item like a cancer drug, patient access comes only if someone else pays, for example the Ministry of Health or a hospital.
Based on my experience, I have noticed four key categories. Challenges differ by category and so must the solutions. For example, let's consider an innovative cancer drug. At the national level, the pan-Canadian Oncology Drug Review, or the pCODR, will issue a funding recommendation to provinces based on the clinical and economic evidence, as well as patient input and system feasibility issues. The recommendation is then sent to the provinces, and in some provinces like Ontario, a separate recommendation committee, for example, the Committee to Evaluate Drugs, or the CED, will review the evidence about the cancer drug and make a recommendation.
Provincial committees, like the CED, make their recommendations in a broader context, considering treatments for other diseases. With funding recommendations from both the pCODR and the CED, the executive officer in the Ministry of Health will make a funding decision, perhaps after closed-door negotiations with the manufacturer of the product. Each of these stakeholders in the HTA's ecosystem has their own special set of challenges. Failure to plan with the payers, policy advisers, and policy implementers of innovative health technology is as good as planning to fail.
During your October 18, 2012 meeting, you heard about the success of the pCODR and how it was recommended as a model of how to do HTA nationally. The pCODR was the result of provinces creating a separate HTA process to better serve their needs for cancer drugs. Both patient groups and industry are big supporters of the pCODR. It is the province's process. It was designed for them by them. The pCODR's innovative methods and processes have been admired and adopted by other HTA processes in Canada. I want to echo John Soloninka's testimony that the pCODR's excellent customer service in the field of HTA would be a good starting point to look for success strategies related to how to encourage innovation in a sustainable and accountable way.
As an economist, I would be remiss if I didn't stress the importance of incentives. If we want more innovation, we must create the incentives to encourage it. However, if we create the incentives that lead to greater innovation, we should not be surprised if we get more innovation. It is not enough to encourage companies to create innovative product. We must also make sure the capacity is there for Canadian health care system payers to be able to use HTA to evaluate what they're getting and what they're paying for it. We cannot expect our health care system to be sustainable and accountable if we have underinvested in the capacity to do smart shopping.
Creating more things that we can pack into our healthcare suitcase will not save us from the fact that we still need to choose what we put in and what we leave out. HTA helps decision-makers, policy advisers, and policy implementers with the challenges they face with innovation. HTA will also help patients and physicians who want to know the extent to which a new treatment is better than usual care and how much more it will cost. Applied research in the areas of health economics, services, policy, and ethics creates the evidence for evidence-informed policy decisions. If we're going to invest more in innovation, let's invest in the research we will need to determine its value.
Thanks again for the opportunity to share with you, and I look forward to your questions.