I'd like to start by thanking you for the invitation to speak today.
You probably notice from my accent that I'm from the U.K., and much of my experience and insights into a national pharmacare program I have derived from 20 years' experience as a health economist advising the NHS on paying for drugs. I have now been in Canada for five years.
I hope I'll take considerably less than the 10 minutes that you've allocated.
I wish to make three points with regard to national pharmacare.
The first is the cost-savings capacity of a national pharmacare program. We just heard from Dr. Wong-Rieger and Dr. Smith on how the absence of effective pharmaceutical therapies impacts not only the health of the individual, but also the costs they impose on the health care system.
This is not unique to rare diseases, as exactly the same story is in play for those people who cannot afford to fill their scripts for chronic common conditions or infections. These people also will turn up at the emergency department and may be admitted, but impose significant costs on the health care system, which, as you all know, come from the public budgets. In effect, the taxpayer picks up the tab for the health management of the avoidable complications of these conditions.
I think that's both a financial and a social equity argument for national pharmacare. We could hopefully reduce the inequality in access to high-quality care and the inequality of health by addressing the needs of those people who can't fill their scripts due to socio-economic reasons.
I'll move on to my second point, which is about precision medicine. I lead two large research programs funded by Genome Canada around personalized and precision medicine. Whilst the number of technologies currently on the market is small, the number in development is very large. The last time we looked at this, we identified 167 precision medicine technologies in clinical trials globally.
They are coming and are defined by a couple of key characteristics.
First of all, they arrive at market with a really quite immature evidence base. There's very little we can do about that in the clinical trial setting simply because the nature of precision medicine is that it identifies smaller subsets of the population who can benefit from the technology, and so the level of evidence that you can generate in the clinical trial phase is inherently less than for conventional medicines designed to treat common diseases.
Secondly, the nature of the test technologies—the defining characteristics of these—is such that it is much harder to generate convincing evidence. You need much larger trials to generate strong evidence on the performance of these tests that is generalizable to all the populations.
We are looking at a situation where regulators are going to be having to make decisions about proving these new technologies on much more uncertain evidence.
Dr. Herder referred to the Vanessa's Law and how it creates the facility for adaptive licensing so that we can move some of the evidence-generation process into the post-market phase. That is only feasible if there is a sister organization with a national remit that's responsible for reimbursement and that can take the baton from Health Canada and actually deliver national access so that you get the necessary volume of uptake of the technology to generate the evidence. In my briefing I describe the case of Prochymal, which was probably the first truly innovative technology to be put forward for a conditional licensing approval, and it went nowhere because it couldn't get reimbursed.
If, as I think is appropriate, our innovation or industrial strategy in this sector is seen as adaptive licensing, making Canada an attractive place for inward investment in the pharmaceutical industry.... Vanessa's Law and those facilities that it gives the regulators are a necessary condition, but a national reimbursement authority of some form is probably a sufficient condition. So there are important industrial policy implications to trying to move forward in this space without a national pharmacare strategy.
The third point I would raise returns to the orphan drugs and orphan disease community. A lot of those same issues I've described for precision medicines are pertinent for the orphan disease community. I think it's important to recognize that in creating a national pan-Canadian formulary, there is the opportunity to raise the standard of care for these people. Because there are very few with each individual disease, though they are very large in number in the entirety of the diseases, the clinical expertise in the packages of care they require for good outcomes is rare as well.
By having a national pharmacare organization that can contract with specialist centres, we would be able to ensure the quality of care that's provided, and to have specialist and more rapid diagnostic facilities. As a result, we could build a package of high-quality care around the drugs that were implemented. I think that would be beneficial both to the patients and the health care systems by avoiding those diagnostic odysseys that these patients go on, consuming large amounts of resources in doing so. It would also be an opportunity to negotiate for all Canadians affected by those diseases and thus an opportunity to reduce the total budgetary impact.
For each individual orphan drug, the budgetary impact is small, but with literally hundreds of orphan drugs coming down the line, the total budgetary impact is large. You can get an orphan drug designation with 17,000 patients affected in Canada. If it's $100,000 per patient, per year, you can quickly see how the total budgetary impact does not stay small and that there will be a need to manage the total budgetary impact of orphan drugs at the same time.
Thank you again for inviting me, and I hope they were useful insights.