Evidence of meeting #121 for Health in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was price.
A recording is available from Parliament.
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I'm just going to stop you there. I don't want to get into that.
Every other country in the world is dealing with exactly the same situation.
9:25 a.m.
Executive Director, Patented Medicine Prices Review Board
That's absolutely correct, yes.
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
The fact that we're still third highest strikes me as indicating that what we are doing is not meeting our goal. By the way, I'm not shooting the regulator—
9:25 a.m.
Executive Director, Patented Medicine Prices Review Board
No, no that's fine.
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
I think it would get into policy reasons.
You also said that when the Patented Medicine Prices Review Board was set up back in the late 1980s—
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
—in 1987, so 30 years ago—at that time I remember distinctly it was the Mulroney government that stated that their policy was that they were going to extend the patent protection to drug companies, and two things would happen. One was that we would attract research and development to Canada. Two, with the set-up of this board we would protect Canadians from excessive pricing. Yet here we are 30 years later and by all accounts R and D is actually less today than it was. We're actually below that original 10% goal and, of course, we're paying the third-highest prices in the world.
Would you agree with me that the policy of granting drug manufacturers extended patent protection has clearly, after 30 years of data, not resulted in more R and D in this country and lower prices for Canadians?
9:25 a.m.
Executive Director, Patented Medicine Prices Review Board
We've been quite transparent in acknowledging that fact. There is no natural connection between the degree of patent protection a country offers and the level of R and D. You can do your research and development in China and still benefit from the same term of protection in Canada as a domestic company that did all of its R and D here. So, maybe it's a quid pro quo arrangement. Back in the day, I think that's how it was seen, that it would increase our IP regime for pharmaceuticals. You bring in more R and D but there is no organic nexus between those two things. They have been quite vocal in saying so in recent years.
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
We just signed the United States-Mexico-Canada Agreement. That agreement will extend the minimum data protection period for biologics from eight years to 10 years. So, we've just replicated that policy of extending patent protection to drug manufacturers. That means, of course, that U.S. drug companies will be able to protect their biologics from competition in Canada for a full decade.
As you just pointed out, Mr. Clark, given that according to the PMPRB seven of the 10 medicines—and I think you said eight—
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
—contributing to drug sales in Canada last year were biologics, would you agree with me that the impact of extending data protection on biologics by two years will have a deleterious effect on the amount we spend on drugs in Canada?
9:25 a.m.
Executive Director, Patented Medicine Prices Review Board
It could. I think the important thing to understand about data protection is that it typically operates in parallel to patent protection and runs now for 10 years. It did run for eight, and patent protection is 20 years from filing, so typically data protection is almost redundant in a way. It's subsumed within the patent term, so it will really depend on how many drugs are coming onto the market in the future, biologics, for which there is less exclusive time left under patent than there is under data protection. That's a very difficult thing to forecast. I think a bigger picture of what that supports in terms of a policy adjustment is a more robust PMPRB to equip us with the tools that we need to more closely scrutinize these types of drugs.
9:25 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
You sort of anticipated where I was going with that, so thanks for that.
I want to pierce the veil of secrecy that seems to be such a part of this whole pricing of prescription drugs in this country. We had Dr. Joel Lexchin who said that:
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.
To what degree, Mr. Clark, are drug companies' research and development costs for a particular drug revealed or considered in PMPRB reviews on excessive pricing?
9:30 a.m.
Executive Director, Patented Medicine Prices Review Board
I would say not at all. It's not unique to Canada the fact that both prices and R and D are not disclosed publicly.
9:30 a.m.
Executive Director, Patented Medicine Prices Review Board
There is a mechanism in our act that would enable a hearing panel of the board to compel that type of information from the company if it felt it was germane, and if it required that information to make a ruling on whether the price of the drug was, in fact, excessive. But there have been all manner of drug transparency bills proposed before various state legislatures in the U.S., whereby they are trying to compel companies to open up the books and actually reveal how much they are spending on these drugs and whether there is some proportionate relationship between R and D and prices. To date, that has really failed. I think a lot of people in the know are not big supporters of that, because they are concerned that if you just regulate prices on the basis of profit, you turn pharmaceuticals into a utility. That's the argument.
9:30 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
You said there's a statutory power to compel that information. How often is that used by the PMPRB?
9:30 a.m.
Executive Director, Patented Medicine Prices Review Board
I couldn't give you numbers off the top of my head.
9:30 a.m.
Executive Director, Patented Medicine Prices Review Board
Yes, it certainly is.
9:30 a.m.
Liberal
The Chair Liberal Bill Casey
You're over, but I'm going to let you go a little further because everybody else has.
9:30 a.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Mr. Clark, at the last meeting, we heard an example of a drug, for a rare disease, called Cystagon. People were paying $15,000 a year and it was under that special access program. The company didn't apply to be licensed for that. They applied to be licensed for Procysbi, which cost $350,000 per year. It's the same drug and the same molecule, except that there's a coding that's different, so the release is different.
Is it time for us to consider some form of compulsory licensing or at least address that? When we have a company that is foisting on to the public the same drug that costs many times more than another drug that we know is available, that tells me that something is wrong with the system.
What's your fix to that?
9:30 a.m.
Executive Director, Patented Medicine Prices Review Board
How much time do I have?