Health Committee on May 9th, 2016

[Stephen Frank]

To begin, there's $15.5 billion reimbursed privately in Canada today.

We looked at some research that the PMPRB has done on generic penetration rates in Canada, and they've estimated that there's about a—and I'm going by memory—6% gap between public and private payers on the penetration rate on generics, so we did some estimates, looking at real data on our private payers, as to how much that would save for the system if they were immediately flipped onto the cheaper generic. That gets you about $900 million.

Then we asked for a list from the pCPA and the Government of Ontario of every drug that they've negotiated a private listing agreement on, and we assumed they were getting a 20% savings off of those prices. We then looked at our volumes on those drugs and calculated what you would save if you were paying those lower fees. That gets you about another $400 million.

Therefore, in the best-case scenario, if you were to take all of that in and pay that immediately out of government funds, you're going to get $15.5 billion. You're going to have to move...I don't even want to speculate how many people off their therapies onto the generics, which is a different discussion. You can do that over the first year and you'll get those price savings, so we feel the best case on day one is about $14 billion.

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

Thank you.

The issue of choice comes up, and how some plans might have decreasing choice if there is a mandated formulary.

An earlier witness talked about how on some private insurance plans you have more choice in different types of medications. We know from a lot of the empirical data that there are much more expensive alternatives that are becoming more popular and that physicians want to prescribe, but the evidence doesn't actually show that there's an increased outcome.

Therefore, are we perhaps overestimating the importance of choice? As an alternative, we could have a formulary simply saying that our evidence shows this cheaper drug is the best alternative.

[Stephen Frank]

I'll say that we don't think prescribing practices are as good as they should be in Canada. We do think there's room to improve there. Our view is that you should address it directly with the physician versus looking for the payer to be policing that through the back door.

The other thing—and as a clinician, you'll understand this clearly—is that the evidence on these drugs is on a population level. The evidence tells you what the average person's response will be to a drug, and there are all kinds of distributions around that. We feel generally that more choice is better than less where you can afford it and where it can be made available. That's an approach we would take to that question, but clearly we need to do a better job at getting evidence built into our formularies.

There are different ways of doing that. We looked at the managed route. We do have closed formularies. We do all that stuff, but we let the consumer decide what is best for them.

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

This is the second time I've heard the phrase “population-level evidence”. What other kind of evidence is there?

[Stephen Frank]

That's the gold standard, there's no question, but for any drug, there is going to be someone who is a super responder and there might be someone who doesn't respond at all. Sometimes you have to try a few before you hit the magic sauce, so you want to have options for people. That's where the choice and the options, we feel, are important.

Also, for a lot of the very new and expensive drugs, the evidence is very unclear. Clinical trials that have been done may not have been great and it's not obvious whether the drug will be effective or not, so reasonable people land in different places as a result. If you had 10 drug plan managers at the table with us, they would all say that they have an evidence-based formulary, and they've all landed in slightly different places with what they cover. It's not the case that there's this one absolute answer to these things. We think choice and some variability are important.

[The Chair, Liberal, Bill Casey]

Your time is up.

Mr. Webber is next.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Mr. Chair.

One of the disadvantages of being later on in the session is that a lot of your prepared questions have already been asked, so I'm left here now just wondering who you think is going to win the hockey game tonight.

[Voices]

Oh, oh!

[Len Webber, Conservative, Calgary Confederation, AB]

No, in all seriousness, Mr. Swedlove, you talked a bit, of course, about the pan-Canadian Pharmaceutical Alliance, the pCPA. What I have been led to believe is that the provinces are dealing with these pharmaceutical manufacturers and getting lower costs because of their large buying powers, and life insurance companies such as yours would pay inflated prices.

Mr. Casey asked you a question regarding why the group you represent would not come together just like the pCPA to build up that number in purchasing power. You stated that your companies pay different prices for pharmaceuticals. I just don't understand why you would not form a private company alliance like the pCPA to get that large purchasing power.

[Frank Swedlove]

Well, one of the nice things about being government is that you're not subject to the Competition Act.

[Len Webber, Conservative, Calgary Confederation, AB]

There you go. That's a very good point.

Yes, I think it's going to be Pittsburgh winning tonight.

[Voices]

Oh, oh!

[Len Webber, Conservative, Calgary Confederation, AB]

I'm going to pass it off to Dr. Carrie now, because my questions have already been answered.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much.

I do have a question. My colleague brought up a really important thing about prescriptions not being filled. Some of the witnesses here have assumed that it's because people can't afford to fill the prescriptions, but I've had a slightly different experience on that.

Do you have any information on why people don't fill prescriptions? Is it that they feel better the next day or that they don't like the drug that was prescribed? Do you guys collect any data on that?

[Frank Swedlove]

I'll ask Mr. Frank if he has anything to add to this, but we're not certain of the basis of the work that's been done in terms of how the question was asked on this issue about whether they fill their drugs or not.

I'll just anecdotally note that the last time I went to the doctor, I got five prescriptions because I have grass allergies, and three of them were prescriptions that were optional as to whether I would get them or not. I didn't fill them because of the co-pay. There was a small cost to me, and I figured I wouldn't fill them if I didn't need them. If someone asked me if I didn't fill out a prescription because of costs, I would have said yes, because I didn't fill those prescriptions for allergy medicine.

It would be interesting to know a little more detail about how that question was asked.

Now I'm sure there are cases of people not filling their prescriptions because of costs. Those are the gaps that I talked about earlier, and we support the idea of getting more information, getting a better understanding of those gaps, and trying to deal with them, because it has always been our position—it's not the first time that we've stated this—that Canadians should never have to choose between putting food on the table and getting drugs.

We strongly believe that and we've been stating it for many years. In fact, we put out a paper six years ago saying so.

[Colin Carrie, Conservative, Oshawa, ON]

I just wondered if you had the data, because I've heard that before and even I know that sometimes a physician will give you something and say, “I'm going to give you this just in case it gets worse.” There are different reasons that they're filled, or not, and certain assumptions have been made.

I want to ask you too about this whole idea of over-prescribing. You talked about that. It seems that there are certain over-prescribed medications out there, and one of the concerns is that if you start covering all of this stuff, that may be a simple solution instead of perhaps looking into the problem a little bit more deeply.

Do you guys have any data on mis-prescriptions, or what would be the word—overprescribing? I know one of the witnesses said 40% of seniors had improper prescribing. We've heard about the opioid crisis, too—about how physicians are trained to prescribe, but maybe not to wean people off.

Do you have any data on over-prescribing and how much that costs Canadian taxpayers or the industry today?

[Stephen Frank]

No, we don't, but what I would say on the prescribing issue is—and this is in the paper that Frank referred to—that we do think we are not at the gold standard on prescribing practices in Canada. You can look at other prescribing guidelines and structures that have been put into place in other countries where they've made efforts, to your point, at getting at the root of the issue. Let's get our physicians prescribing appropriately and put some training incentive and process around that so that we can improve things. We'd be very supportive of that effort.

We, as an industry, become involved once the prescription has been presented at the pharmacy. That's when our interest directly starts, but we acknowledge that there are issues upstream in the system that could certainly be improved, and it could have benefits for us if we do better as well.

[Colin Carrie, Conservative, Oshawa, ON]

This the opinion question that I didn't get to ask you last time. We had one witness ask this question: do you think the system is working now? Do we have to throw out the baby with the bathwater?

Do you think the system is working well now? Is it working okay?

[Frank Swedlove]

In terms of the cost of drugs, our answer would be no.

We're not here to argue the status quo; we're here to support reform, but a reform that can be done without increasing cost to government and without increasing the role of government. It would be for us to partner with government to get the lowest cost possible, and we think it's totally reachable.

[Colin Carrie, Conservative, Oshawa, ON]

For access?

[The Chair, Liberal, Bill Casey]

You're out of time.

[Colin Carrie, Conservative, Oshawa, ON]

I'm done. Maybe I could have a quick answer.

[Frank Swedlove]

In terms of access, we suggest a bit of formulary so that everybody has at least the minimum standard that is applicable.

[The Chair, Liberal, Bill Casey]

Ms. Sidhu is next.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Mr. Chair.

Thank you for all of the presentations. They were very informative.

My question is to Ms. Anita Huberman.

Can you explain a little bit more about your organization's position on adopting universal drug care? Can you explain more about having a universal drug coverage system? Is it easier for small and medium-sized businesses?