Health Committee on May 30th, 2016

[Dr. Christopher McCabe]

It was a time of transition. Rudolf Klein did some work in the mid-eighties and looked at historical records. There was undoubtedly a transaction cost, because you had a culture shift. In the first couple of years, from 1948 through 1950 to 1951, if I remember rightly—it's a long while since I've read the book—you saw a real spike in prescribing levels. Anecdotally, doctors were filling their surgeries' dispensaries. There was a real spike, but it then settled down.

What we didn't have in the U.K. at that time was any mechanism for controlling. We didn't have a national formulary. We just had a legal commitment to pay for anything that a doctor prescribed. They got their prescription pads, they were used, overwhelmingly appropriately, and the health of the population definitely improved, but there was a very large spike that kind of shocked the system. Gradually, over time, mechanisms approaching formularies were developed.

Now we see the most recent version of that, which I think Dr. Tamblyn and Dr. Herder were referring to, specifically around cancer drugs, where new cancer therapies that are not clearly high value at the time of licensing will be entered into a special scheme called the “cancer drugs fund”, and data will be collected on outcomes, typically for two years. At the end of the two years, if they haven't performed sufficiently well to be judged valuable by NICE, then they won't be paid for anymore.

There were some 130 cancer drugs approved under the previous situation with the cancer drugs fund, and NICE is going to be reviewing them to decide whether they are moved in. They are actually taking health technologies drugs off the market now.

[Don Davies, NDP, Vancouver Kingsway, BC]

That leads into my second question. Some people who criticize Canada's bringing in of a universal pharmacare system also argue that it will restrict the formulary, that patients will not get access to the drugs they need, and that it will restrict innovation. What was the U.K.'s experience in that regard?

[Dr. Christopher McCabe]

With having such a large domestic pharmaceutical industry in the U.K., it's obviously a major concern whether the restriction of access would actually impact upon investment and innovation in the U.K. I would observe first of all that the initial analysis done by the U.K. Office of Fair Trading established, as many others have, that there isn't actually a relationship between pricing behaviour and inward investment for the pharmaceutical industry. That claim isn't particularly strong.

Secondly, I think what is very interesting for Canada is that they worked to align the health system with the R and D process so that the U.K. continued to be an attractive place for the research around innovative drugs, because it could deliver high-quality patient-level information on the outcomes of patients receiving them and hard systems such as the NICE patient access scheme for negotiating those conditional access arrangements almost immediately upon licensing approval. The key economic role of the pharmaceutical industry in the U.K. economy has been maintained by aligning what the health system was doing with innovative technologies and the research capacity.

[Don Davies, NDP, Vancouver Kingsway, BC]

Are patients getting access to the broad range of pharmaceuticals that they need, that the doctors are prescribing for them?

[Dr. Christopher McCabe]

It depends on whom you ask. If you ask NICE, they will tell you they have turned down only two cancer drugs in all of their history. If you ask the cancer community, they will say they have turned down 40-odd. The difference is that NICE will count.... If we say yes to a specific subgroup that is not all clinically indicated, we are saying yes. The patient advocacy groups will tend to say that unless you say yes to every patient group that is named in the licence, you are saying no.

Overall, the access to cancer drugs and most innovative medicines is pretty effective. There are a few exceptions, but overall there is very good access at reasonable prices.

[Don Davies, NDP, Vancouver Kingsway, BC]

I am done.

[The Chair, Liberal, Bill Casey]

Mr. Fragiskatos, go ahead.

[Peter Fragiskatos, Liberal, London North Centre, ON]

In your presentation, Dr. Wong-Rieger, you talked about kitchen table organizations, and I immediately thought of an organization in my riding of London North Centre, Bethanys Hope Foundation. You are nodding your head yes, so I imagine you know Dave and Lindey McIntyre very well. They have been active for the past 20 years, after losing their little girl, Bethany. She was seven years old when she passed. They have raised $4 million for research, and they continue to work very hard on this.

Can you tell me about the experience of organizations like this, families who are trying to raise funds and awareness, and trying to access treatment for their suffering loved ones?

The system—from reading the briefing notes for today, and knowing a little bit about the travails of families who experience rare diseases—seems very bureaucratic in Canada. It is a patchwork quilt.

Could you tell me about best practices from other jurisdictions? I know there is NORD, the North American organization, your counterpart, which looks at rare diseases on a North American level. You talked about the Orphan Drug Act in the United States. You talked about the European experience.

Are there other lessons to be learned there for Canada and Canadian policy-makers trying to deal with this question of rare diseases, either from the EU or the United States? We are talking about a national pharmacare plan. Rare diseases can be dealt with in a national pharmacare plan, I would expect, but do you have any ideas on that?

[Dr. Durhane Wong-Rieger]

As you say, there are so many good examples internationally, and Bethanys Hope is a wonderful group. They really are typical of many of our patient organizations that, as you say, are made up of parents who are doing fundraising, trying to raise awareness, and trying to develop a patient community so that if in fact research is being done or clinical trials are being done, they have patients who are identified and who can enter into that.

I will say that sometimes people misunderstand what an orphan drug regulatory framework could do for Canada. The biggest thing it could do for Canada is bring Canada into the research and development scheme.

We have researchers and small companies in Canada that are doing exactly what Bethanys Hope is raising funds to do. We have many examples of where in fact they actually discover the cause of a disease, and they actually discover a treatment that could be developed for that disease. In many cases, because we don't provide the facilitative support in Canada, these companies pick up and move elsewhere because there are more incentives to develop there, so Canada becomes only a buyer of drugs, not a contributor.

The other sad point is that many of our patients then don't get into the clinical trials. When we're talking about a progressive disease, you want to get your child or your family member in as soon as possible. In developing those communities, there are many examples in Canada, and many of these groups are also connected internationally, which is a big bonus, but quite frankly, that regulatory framework would help us support the research and development in Canada and engage more patients in terms of clinical trials.

At the pharmacare end, in Europe right now we're seeing the emergence of international programs. The EMA approves drugs for all of Europe, but each country there has been traditionally purchasing their own drugs, sort of like the provinces in Canada. What's emerging, in fact, are international programs. Belgium, Luxembourg, and the Netherlands are coming together to create international purchasing, and Austria and Romania and others are coming together to say that they need to work together at a European level, not just to get better pricing, which could in fact happen.... The pricing comes not because they're better negotiators, but because they can provide a better volume discount. If you can guarantee me x number of patients and you are willing to risk-share with us the introduction of these patients, we can actually introduce at a lower price and we can demand a lower price.

There's no upside for the patient in having very expensive drugs. We are very committed to bringing in drugs as cost-effectively as possible, and that means we can actually cover more people. We're also very committed, as I think both Professors Herder and McCabe said, to making sure that the drugs are available to patients as they work. But again, we have to work in collaboration. We have to work internationally. There are not enough patients in Canada with many of these diseases for us to know over a period of time, or at least know more quickly....

So I think it's very much the case. We have so many of these small patient groups that are working hard in Canada, and oftentimes collaboratively as part of international organizations to bring in these drugs. What we want to do is to give Canadians a fair shot. Right now, we're not doing that. I think that's the challenge. We're not doing it at the research and clinical trial level, and we're not doing it at the reimbursement level. If we would work together, we could do it better. If we would work internationally, we could do it really well.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Would you point to a specific state that stands out for you? Let's take Europe, for example, where things are being dealt with effectively. Bethanys Hope is focused on metachromatic leukodystrophy. There is also Krabbe's, another rare disease, a sister disease. There are so many others. I emphasize these points because 8% of Canadians are facing a rare disease. If we can learn from a particular example, then I think we'll be better off as a country and we'll be doing our job as policy-makers.

[Dr. Durhane Wong-Rieger]

You've heard some of the discussions around coverage or evidence development. Germany brings in a drug, they negotiate a price, and then they get a year to actually demonstrate that they have the outcomes they've promised. France negotiates a price, they have a year in order to make that drug available, and they get a negotiated one, two, three, or five years to actually demonstrate the outcomes.

If you get the outcomes, you get to maintain the price. If you don't, you get to reduce the price. In theory, if you do better, you get to raise your price. I don't know if that has actually happened.

Right now, in terms of Belgium, the Netherlands, and Luxemburg, as I say, they are coming in with managed access programs. The Netherlands is a very good example. With Fabry disease, they brought in the program and monitored patients over a period of time. They then began to say that some of it was working and some of it was not working, and they said who were the patients for whom it might be working. The patient community had a heavy consultation role in trying to parse out that community to make some decisions on how it would work better.

If Canada were to work much more internationally in this realm, we could do so much better. We're a small country. As you say, the U.S. has a big population, and their conditions of access are a little different and they collaborate a bit differently in terms of which patients get access. I can tell you that some of the patients in the U.S. are getting very frightened, even with private insurance plans, because the private insurers basically are also starting to come up with differential schemes, and they don't know how to collaborate.

I was amazed at how many times people pointed to Canada and said, “You folks have a great model.” They said that we have the best potential for bringing in the very best program, based on some of the infrastructure we have and based on some of the monitoring we have. When we start to talk about pharmacare in Canada, people really do suggest that Canada could actually get it right. But we would have to do it internationally.

[The Chair, Liberal, Bill Casey]

We'll now move on to round two.

Mr. Webber, you have five minutes.

[Len Webber, Conservative, Calgary Confederation, AB]

I'll direct my first questions to Dr. Wong-Rieger and Maureen Smith.

A big frustration for me is the fact that our country runs on the silo system with regard to our health care system. We work within our provinces. You make perfect sense about collaborating internationally and collaborating amongst ourselves here in Canada, but of course we're not doing that, especially in your area of rare diseases.

We are currently debating a private member's bill in the House here on human organ and tissue donation, on a national registry in this country. I don't know where it will go, if it will succeed or not in terms of passing, but one of your points here is that you'd like to see a national registry created for all rare diseases. How do you see that helping you when we're in a system now where the provinces and territories tend to continue to hang on to that silo system?

[Dr. Durhane Wong-Rieger]

I think the pressure in terms of breaking that silo is happening organically. We've already seen the pan-Canadian Pharmaceutical Alliance recognizing that by negotiating together they can get not only better pricing but also better criteria in terms of making that happen. A patient registry for rare diseases is not something unique to Canada.

In Canada we have amazing resources in terms of being able to do that. We have some of the very best genomic sequencing labs in Canada. We can actually register patients according to identified phenotype, the physical features of a rare disease, and we can identify them in terms of their actual genetic sequence so that we can know what these patients' defects are that are leading to a particular rare disease. We have a great program in Canada, a matchmaking program where you can actually match up patients who have similar genetic sequencing that are defects and begin to say, “Oh, my gosh, these are families here”. I think we have a huge capacity in Canada to develop very rich registries. I travel to international conferences, and people point to Canada and say that we have the most amazing system and the greatest possibility of being able to build those registries.

We also have great collaboration among our specialists. We have metabolic specialists who work together. Most of our pediatric centres work together. We're big enough that we can have these, but we're small enough that our researchers, our clinicians, and our scientists actually know each other. For the most part, they actually like each other. They actually want to collaborate together.

We have all of that capacity. It means then that if we have a treatment coming up, patients who are already registered—we've talked about Bethanys Hope—can be entered into the clinical trials early on. We have seen examples of that already happening. I think the possibilities are huge here in Canada. We just have to be able to harness them. CIHR has done huge investments in terms of personalized medicines and supporting these kinds of disease programs. What we lack is the actual incentives for companies to actually set up that research and carry it to the next level here.

[Len Webber, Conservative, Calgary Confederation, AB]

I was just going to mention that as well, the fact that these companies are not motivated to conduct these clinical trials due to the small population for rare diseases.

I have a quick story about a young constituent who came to me. This was a few years ago, when I was an MLA. She was just coming off of a clinical trial on a drug that was a godsend to her. It took her out of her bed. She had rheumatoid arthritis that was very severe for a young 21-year-old. She went through this clinical trial. It was a miracle drug for her. It got her back to work. It got her contributing to the tax system as a taxpayer, and she was happy and productive. Well, the trial ended. No more drugs for her.

The reason she was in my office was to ask if these pharmaceutical companies could do that, could take away a drug once they'd done their testing. It had not gone through the formulary, or hadn't been brought to the government yet, but they were ready and had done their research. Then they cut the drug off.

[Dr. Durhane Wong-Rieger]

We're doing more and more, especially in the rare disease community and with drugs in which there are no alternatives, to ask companies to set up bridging programs, to make guarantees that if your patient comes off the therapy and it's not yet approved, you continue to fund until there's an actual decision in terms of reimbursement.

We are also doing more in terms of insisting on crossover drugs. Take a small patient population with a debilitating disease. What if you're in the placebo group? How do we get patients to want to do that? We're asking companies to guarantee that there will be a crossover. Once the trial gets to a certain point, where it's clear that it's working, they have an obligation to take a patient off of placebo and to put them on the drug. With small patient populations, we can do some of that, but that's the right thing to do. We really reinforce that. They can't do it for life, but we really reinforce it until we get a good decision on the reimbursement.

[The Chair, Liberal, Bill Casey]

You are done?

[Len Webber, Conservative, Calgary Confederation, AB]

I am done.

Thank you.

[The Chair, Liberal, Bill Casey]

Mr. Ayoub, go ahead.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I want to begin by thanking the witnesses for joining us and for their highly inspiring testimony, especially Ms. Wong-Rieger's and Ms. Smith's testimony.

Orphan drugs are very expensive; that's the norm. Those are the most obvious cases. How can those medications be assessed? My concern is really the assessment of those medications and their cost effectiveness. Of course, we would like something that costs a lot to be very effective. However, that's not often the case, and those medications will not be on the list. This issue has been discussed on several occasions.

What are the assessment steps for those orphan drugs to be put on a list? My question is for each of the witnesses. How is a ranking established to ensure that an orphan drug ends up on the list?

Mr. McCabe, I would like to hear your comments on this.

[Dr. Christopher McCabe]

In principle, conceptually, the comparison is the same as for a conventional therapy. The difference is about the level of certainty or uncertainty, the risk that what you observe in the trial is not actually going to be observed in practice when you roll it out to more patients.

The challenge of the orphan drugs to HTA is how to deal with that uncertainty. Intellectually, conceptually, the way to deal with it is to recognize the price, the value of that uncertainty. Health care is very much like laying a bet. We think something is going to work, but it doesn't work in everybody, so we take odds, like five to one, and we are willing.... If I were going to bet $5, I would probably quite happily do it on a hundred-to-one bet.

If I have to bet $10,000, I am probably not going to go more than 1.1 to 1. This reflects that uncertainty has a value, and there are mechanisms for calculating the value of the uncertainty.

What that information allows payers to do is negotiate down the price to reflect the uncertainty at the time of introduction, and as the evidence is accumulating, because the technology is on the market and being used, there is then the possibility for the price to increase to reflect the reduced risk, but actually you are buying something that doesn't work.

That is why we need, for these types of technologies.... Orphan drugs are one extreme, but also for precision medicines there is a large overlap. We are going to be moving into a world where decision-makers are going to have to be much more sophisticated. It is not going to be a simple yes or no. It is frequently going to be yes with conditions. Those conditions will reflect the nature and the magnitude of the uncertainty that is in play. Does that help?

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I think so.

If I understand correctly, there is no uncertainty when it comes to more common diseases because there is scientific evidence to answer those questions. Normally, anything to do with medications is related to the scientific field.

[Dr. Christopher McCabe]

There is still uncertainty, but it is of a level where the cost of doing the research to reduce that uncertainty further, both in terms of health gain foregone from delaying general access and the direct cost of running the study, is less than the value of the uncertainty. It is just a bigger issue for rarer diseases, and that is why we have to [Inaudible—Editor].

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

What I am getting at is that the more research and investment there are, and the more data is gathered, the more the scientific community is able to find specific remedies and cure a disease that seemed incurable for maybe dozens of years. AIDS is one example of that, and there is now treatment for that disease.

That is one example of short-term choices to be made to be able to counter diseases that are now defined as rare and ensure that they will no longer be rare in the future. It's about the level of research, the sharing of information—we talked about the sharing of information internationally. It's about seeking out solutions and ensuring that everything is being put in place to share information on those issues. However, there are many silos in Canada—and my colleague mentioned this—but also around the world. What potential solutions should be considered to improve the situation and enable us to quickly make decisions in this area?

Ms. Smith, you can answer if you like.

[Dr. Durhane Wong-Rieger]

Can I just say what you hit on is exactly it, because we do clinical trials internationally. We know that with rare diseases we're not going to get all of the information from patients that are just going to be in one locale.

Post-market is the same thing. Why won't we assume that we can go to one locale, one province, one hospital, or one country even? We need to be collaborating internationally.

The challenge is that the access criteria are not the same internationally. Unless Canada is willing and able to collaborate.... Mind you we can adjust some of it scientifically, etc., but we need to be thinking about these as ongoing international environments in order to develop the monitoring. It means, in many respects, that collaboration must go from the beginning all the way through to the end.