Health Committee on Oct. 25th, 2018

[Stacey Silverberg]

I don't think they're artificially high.

There are two things. One, we are heavily regulated to ensure non-excessive pricing. There is the PMPRB, of course, and that is the list price. We also have the opportunity to negotiate. As many of you are aware, we have confidential listing agreements.

Going back to access, affordability—

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

Sorry, I need to cut you off. I have the answer I want.

I have one last question. How will a single-payer plan decrease access as opposed to a public-private insurance plan for which you're advocating?

[Stacey Silverberg]

Public plans don't list drugs as quickly, nor do they have the breadth of what private plans list for employees who are afforded that opportunity to get them through their employer. The mix is actually making sure that we have availability today.

Thus, a future pharmacare program should ensure that we don't have less access than we do today. The mix will ensure that we cover those hopefully going forward, both publicly and privately, and that is a proposed solution that we feel would be best for all Canadians, to make sure everybody has an opportunity to be insured and at the highest possible level they can be.

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

That's my time. Thank you.

[Stacey Silverberg]

Thank you so much.

[The Chair, Liberal, Bill Casey]

Okay, now we go to Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

Let's start with Janssen. I have a rare disease in my family called Alport syndrome. It's a very personal thing for me. I guess my family would not be the ones you would think of. I thought genetic diseases were about people who were interrelated having kids. My wife is from Singapore and I'm Polish, so there's absolutely no way our ancestors are connected in any way.

On rare diseases, drug access is the biggest issue that I see. Too often I see people talk about the sticker shock—that was mentioned in the presentation—of seeing the final price for a particular rare disorder. The comparison I make is that I see sticker shock whenever I see a Lexus or BMW, but what I don't see is the bargaining agreement, the plant, the investments in dollars, the researchers, in the case of drugs. All of that cost is baked into it. Part of that is also clinical trials.

You're a company that does clinical trials. How long is it taking, and what are the costs baked into it? That portion of it has a big impact on the final price tag, and then there are the negotiations that you do with the different provinces and pCPA and the private companies as well.

Can you talk about that cost structure?

[Stacey Silverberg]

I wish I could. Unfortunately, I don't have the in-depth knowledge about what goes into our clinical trials.

First of all, let me just say I hope that your children are doing well living with the rare disease. I hope that innovations have been able to give them a quality of life they deserve. A lot of that is due to the work done by the innovative pharmaceutical industry, so people like you and Ian and his daughter actually have the opportunity to live fruitful lives here in Canada.

In terms of research and development costs, they are significant and that doesn't account also for so many failed molecules that never actually make it to market.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

What's the ratio on that?

[Stacey Silverberg]

I actually don't have that information, but I'd be happy to follow up.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Could you submit it to the committee?

[Stacey Silverberg]

Absolutely.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, and if you have any information about the economics that go into it, that would be great too.

Mr. Brudno, you're the one who mentioned sticker shock. Drug access is the big portion of it. It's really led by a lot of patient groups. When my kids were diagnosed with Alport syndrome, it was after a lot of misdiagnoses. When you talk about early diagnostics, I totally understand.

I met my physician by accident at a patient medical conference in Minneapolis. He was standing right behind me when I asked if there was a Canadian there. He happened to be the head of pediatric nephrology at the Alberta Children's Hospital. I think he was one of the gentlemen who presented at the committee. I met him wholly by accident. Had I not done that, I would have gone through a lot of misdiagnoses.

I'm sure, Mr. Stedman, you went through the exact same thing I did.

We got to the point where the federal government had actually created a rare disease framework to make it easier to provide a pathway for rare disease drugs. That was killed off. The court called it the kiss of death and they got rid of it. The federal government didn't continue with it after 2015. It kind of laboured, and it's gone now.

What would a rare disease framework look like to you specifically in the government? The FDA has kind of a fast-track process for the approval of drugs, but there's approval of drugs, there's drug access and then there's reimbursement as well. I have met a lot people in my riding who have rare diseases I have never heard of. Their drug is approved in Canada but not for reimbursement. They face huge out-of-pocket costs because their public insurer refuses to cover the drug.

Can I hear from you on that?

[Dr. Michael Brudno]

In general, I think it's important when we look at.... All of these are important components: having the access, having the drug approved in Canada through the efforts of pharmaceutical companies doing clinical trials. Then making it available means making it reimbursable to the extent possible within the public health care system.

Out-of-pocket costs for these drugs can be huge and they are not bearable by individuals, but they can be borne by a society that averages those costs across lots of other individuals and also a society where we identify as many patients as possible who are eligible for a specific drug, which will cause the prices of those drugs to go down.

I don't think I can give you a specific sort of recipe—this is what you do here, this is what you do there. Obviously everything in the health economics space is a question of balance. You're balancing the costs to the health care system versus the benefits that this brings to all of the individuals who are affected and to the society at large.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Can I interrupt you?

I just wanted to mention, on the cost of pharmacoeconomics, the role of patients in this. Don Bell was a great New Democratic MP. I'm going to say that; hopefully Mr. Davies is listening.

[Dr. Alex MacKenzie]

It's on the record.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Don Bell had a grandson who was three when he was diagnosed with pulmonary hypertension. It was a terminal illness for him. Don made it his case. There was a debate in the House. There was a motion put forward, but for him, it was a patient issue. Too often I find we develop national research policies, all these grandiose schemes, but at the end of the day, it's the patient who really cares and is really motivated.

People like Erin Little, people like Roy Vinke in my riding and people who really care about SMA are the ones who create these little foundations, and they start pushing pharmaceutical companies to do research. They find a diagnostics company. The diagnostics company for Alport syndrome happens to be in the United States. There's no lab in Canada that can do the test.

The role of the patient in this and patient-centred care, I feel, are lost when we start talking about big single-payer national pharmacare because it's going to be about rationing. Reducing costs can only happen through rationing when you have an expensive drug.

Can I hear your comment on that?

[Dr. Michael Brudno]

The role of the patient is huge. I know of an example of a someone in the U.S. who went from having a child who was the first in the world diagnosed with a specific rare disease—literally the first—to creating a patient group of now around 50 patients worldwide, all within the span of five years, to actually becoming a professor of medicine within the span of the same five years. He was a professor of computer science—so my colleague—and he actually started to create therapies for his son's disease, all in five years, I believe.

Patients have great power to enact change. Yes, there is a balance between the two. Patients can't do everything. They need to work with pharma. They will need to work.... The key to me is to identify early as many of these individuals as we can, making sure that they don't fall through the cracks and that the diagnostic odyssey stops as early as possible so that patients can start working on the treatment side.

[The Chair, Liberal, Bill Casey]

Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

Thank you to all the witnesses.

Dr. Lexchin, I'd like to start with you, please. In an article that you authored in Maclean's in March 2018, you wrote the following:

While there are drugs that are not sold in Canada, the reason is the relatively small Canadian market, not the price.

In fact, when it comes to paying for prescription drugs, only the United States and Switzerland outspend Canada on a per capita basis out of 31 industrialized countries in the Organization for Economic Cooperation and Development.

Do jurisdictions that currently pay lower drug prices than Canada, such as France or the U.K., face slower or more limited access to new life-saving medicines and vaccines than Canada?

[Dr. Joel Lexchin]

No, they don't. First of all, let's be clear. Based on objective studies, only about one in 10 new drugs that are introduced in any given year make a substantial difference to the therapy that people get. Over half of the drugs that are introduced are actually what are sometimes called me-too drugs. In other words, they're an attempt to get into the market, but they don't offer any additional value.

As far as how quickly countries access the drugs, that largely depends on the size of the market. Canada, as the representative from Janssen said, is 2% of the worldwide market. The United States is about 40%. Some European countries are 10%. Companies are going to go to those markets first because they start to get money back earlier on. Canada is later on. In fact, companies wait about six months longer to file for approval in Canada compared to the United States.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'd like to follow up on the elephant in the room when you talk about rare diseases and prescription response: price. You also wrote in that article, “There are now 19 drugs on the Canadian market that cost $50,000 or more per year, compared to just six a decade ago.”

You used the example of a life-saving drug to treat cystinosis, a rare disease affecting probably 100 people across Canada. When you said that it's “soon to rise from $10,000 per year to more than $300,000 annually”, you indicated that the new form of the drug “contains the same active ingredient as the old form of the drug”, but that “it differs only in that it contains a new coating, enabling a slower release of chemicals into the body.” You pointed out that “the basic research and development...was financed by patient groups, not drug companies”, and that “Horizon Pharma has not publicly offered any reason for the price it plans to charge.”

What can you tell this committee about our need and our desire as policy-makers to make sure that Canadians suffering from rare diseases get access to significant new developments, and how do we measure these massive costs with efficacy?

[Dr. Joel Lexchin]

You've hit upon an issue that people have been talking about for a long time: that the drug companies will not open up their books to reveal their R and D costs for new medications. There's a figure of $2.6 billion that's bandied around as being the cost of getting a new drug to market. That kind of figure is based on confidential data that won't be released. If drug companies want to prove that they need to charge these significant amounts of money that they do for new drugs, then they should prove to Canadians and to insurers that those prices are actually justified. However, so far, they haven't.

When you look at some of the other countries.... For instance, you were pointing out that Canada is just behind the U.S. and Switzerland. In Denmark, where there aren't any bodies lying around on the streets due to lack of drugs, they spend $240 per person per year on medications versus over $700 per person per year in Canada.

[Don Davies, NDP, Vancouver Kingsway, BC]

What about the efficacy issue? How do we decide whether or not it's worthwhile to publicly fund a drug if the impact on it is maybe only marginal? How do we make that tough decision?

[Dr. Joel Lexchin]

Those decisions are never easy. Often, actually, when drugs for rare disorders come on the market, because of the small numbers of people, we really don't have enough information about those products to make good decisions. That's why we need ongoing studies once those drugs are on the market.

As Dr. MacKenzie, I think, was pointing out, if those drugs, based on the ongoing studies, prove not to be beneficial either to people as a whole or to individuals, we need to be prepared to stop paying for those. Obviously, if they're beneficial, then we should continue to pay for them.