Health Committee on Sept. 27th, 2016

[John Oliver, Liberal, Oakville, ON]

Thank you for that. That goes right to my point concerning the problem with the incremental approach, since we lock in the inefficiencies that are in the marketplace today in terms of getting affordable drugs.

The second question was really around the federal-provincial relationship, so thank you very much for referencing that particular securities act and the Supreme Court decisions on it. It was very helpful, I think.

If I understand correctly, a national formulary would have to be a voluntary agreement at the provincial level. What would the federal government build in then to the Canada Health Act? How far can we go to set the stage for a national...?

[Colleen Flood]

In the Canada Health Act, you could say a list of essential medicines would need to be determined by each province, and those essential medicines would be free at point of access, similar to what is currently a basic requirement of the Canada Health Act, so that there would be no cost barrier to accessing medicines that are important.

As to how the provinces decide what's in their basket, the Canada Health Act should demand that they be transparent and evidence-based about what they are going to put in. Then there's some sort of fair process Canadians can get their head around about what will be included and not included, so we're comparing apples and oranges. That would be a fine thing for hospital and physician services as well.

This would provide a lot of flexibility to the provinces. The federal government could offer, as they currently do, the potential to buy in bulk through federal auspices and then perhaps get a better Canadian deal. However, you don't have to be big to negotiate hard. My home country of New Zealand has four million people, and it's known for negotiating hard on prices with pharmaceutical companies. They have the lowest OECD prices in the world.

[John Oliver, Liberal, Oakville, ON]

Thank you.

Ms. Bourassa Forcier, do you have anything you wanted to add to that in terms of how far we can go in the CHA?

[Mélanie Bourassa Forcier]

I am in favour of the option proposed. However, we also have to see if it is feasible to base it on the notion of transferability. If residents of another province come into our province, what will they have access to? Do they have the same access as in their home province?

I think we have to evaluate two options in this regard. Setting up a list of essential medications evaluated by each province is one option.

In fact, we have already done that in a quite different context. You will recall Jean Chrétien's commitment to Africa, when we permitted the export of drugs for public health purposes. The WHO had established a general list of what were considered essential medications. In my opinion, that should not give rise to opposition from the provinces; there would be a consensus.

As for establishing a national formulary, we are actually almost there, through the Common Drug Review. Of course, once again, Quebec is not part of that group, but we are still following what is being done very closely. So we are not too far away from a national formulary, albeit not an official one.

[The Chair, Liberal, Bill Casey]

Ms. Harder, we are down to five-minute questions.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you. My first question is going to be for the C.D. Howe Institute.

I am just curious about your reflections. If Canada were to move to a single-payer system, some have suggested that some pharmaceutical companies would simply not sell to our market anymore. Do you think this is possible? Could this be a detriment for us?

[Ake Blomqvist]

No, I don't think so. There are presumably some cases of breakthrough drugs that enable people to deal with health problems that previously could not be treated at all, and in this situation pharmaceutical companies are effectively in a position to blackmail the individual buyers, including individual countries. However, in most cases new drugs that are introduced are improvements on existing drugs. The ability of buyers to drive a bargain depends on the extent to which they are dealing with absolutely indispensable drugs that are the only ones available for certain health problems.

[Rachael Thomas, Conservative, Lethbridge, AB]

If I understood you correctly, during your presentation you said that the provinces would need to put a plan in place. You explained it like a carbon tax, almost—the federal government would put an expectation in place, and then provinces would basically be required to make up anything that fell short from their existing system.

Can you expand on that a little more, in terms of what your plan would be or how you would see it working?

[Ake Blomqvist]

When you are talking about mixed public-private systems, the model we favour in general is to have a public default plan so that everybody is automatically insured through the public plan, but people then have the right, if they so desire, to opt for an alternative private plan.

In response to Mr. Oliver's earlier question, in order to be eligible for a subsidy if you opt out from the public default plan, the private plan you choose instead must be approved. The approval would have to consist of things like lists of what drugs must be covered and a prohibition on excluding someone from coverage because of prior illness or conditions and the like.

We are believers in the principle that we need to define, more clearly than at present, which level of politician is responsible for balancing the public's desire for good health care and its desire not to pay exceedingly high taxes. That issue has to be clarified.

In Canada we suffer from a situation in which the burden of paying for an expensive health care system is kicked back and forth between provincial and federal politicians. I don't think Canadians are well served by that kind of a system. To the extent that we favour some degree of conditionality in transfers from the federal government to the provincial governments, it would have to be with maximum flexibility. In the context of pharmacare, we are all fans of the Quebec model, which is based on the idea of a public default plan that enrols everybody unless they have an approved private plan. There are rules that the Quebec government insists on with respect to what the private plan must contain.

What we fail to understand is why, in Canada, we have a belief that provincial politicians, who are elected by the same citizens and taxpayers as federal politicians are, cannot be trusted to resolve the issue of balancing the public's desire for a better health care system and not having to pay through the nose for it.

[Rachael Thomas, Conservative, Lethbridge, AB]

Ms. Flood, this question goes to you.

You made a comment with regard to what would be in and what would be out. You said it would be up to the provinces to decide. Later you went on to make another comment, which was to the effect that if we cover pharmaceuticals, it may result in other health practices not being included.

It would appear that you are acknowledging that there are in fact limited dollars, that we will have to make some decisions, and that those will be tough decisions. In your estimation, what might not be included, going forward?

[Colleen Flood]

I don't think some of it would actually be that tough. I gave you one example. I don't think correcting my bunion is as important as insulin; do you?

[Rachael Thomas, Conservative, Lethbridge, AB]

That's not my decision to make.

[Colleen Flood]

Right.

I think that if we ask provincial governments to have a fair trade-off among hospital services, physician services, and drugs, we would see a better range of care that is covered for everybody. Some things may fall off that list, but I think that in places around the world that have more transparent, evidence-based policies about what is included and not included in medicare, most things the population believes are fair and just are included.

[Rachael Thomas, Conservative, Lethbridge, AB]

All right.

[Colleen Flood]

What happens is that the money that is saved by better negotiation of pharmaceutical prices is used to help other things. We've already talked about evidence that people who aren't able to access their drugs are in emergency rooms and are crowding up emergency wards. We need to fix that problem.

[The Chair, Liberal, Bill Casey]

Ms. Sidhu, you have five minutes.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Mr. Chair.

Thank you to all the presenters. It's an eye-opening presentation. A thousand diabetic people under 65 years old died in Ontario. That's very challenging.

My first question is for Mr. Blomqvist.

Can you elaborate more on the value-based pricing? You mentioned it earlier.

[Ake Blomqvist]

Value-based pricing is a somewhat technical concept that health economists like.

One of the few ways we can actually try to quantify better health is through the concept of quality-adjusted life years. In the institutions across the world that make decisions whereby they ultimately may say no to certain expenditures that cover certain procedures or drugs that do have health benefits but for which the incremental health benefits are too small, given the cost, the metric they tend to use is the concept of quality-adjusted life years.

The idea of value-based pricing is simply that when we negotiate with the pharmaceutical companies, they will have submitted evidence already to agencies like the National Institute for Clinical Excellence in the U.K. or the pharmaceutical benefits board in Australia, where they have actually produced numbers that say what the health improvement is relative to the next best alternative in terms of incremental quality-adjusted life years. If countries use that metric and establish that the maximum amount they are willing to pay for an incremental quality-adjusted life year is x dollars, that can be the basis for negotiations with pharmaceutical companies about what the maximum prices are that will be acceptable in Canada.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you.

My next question is for Professor Flood.

I agree about the importance of access-to-insulin models. Can you think of any international model whereby we can look into this? Do some provinces, for instance, do it better for insulin?

[Colleen Flood]

Yes, different provinces have different approaches, and that's part of the problem. Across the country we have a wide variety of approaches, and it does depend on where you live. For example, British Columbia does insure everybody, but it has a 30% copayment for pretty much everybody. That is obviously quite a deterrent to those on a lower income and causes problems of access.

Of great credit to Quebec is that it has a universal prescription drug plan. We might not necessarily like its design, but it does have it; however, there are again significant copayments for people at point of service. To me, that's the basic problem. No matter how you design this health care system or national pharmacare, you've got to make sure that people are not deterred because of financial constraints from getting access to the medications they need.

I disagree with Ake that the way to do this is somehow just to leave the status quo in place. Big bang reform around managed competition, even those models that he's talking about, has involved huge government moves—for example, in the Netherlands it meant regulating the private health insurers so that they compete with each other. The private health insurance plan is the public plan. Everybody's in; it's all risk adjusted. They pay in what they can; they get back from it according to their need. There are very small or no copayments at point of service for needed drugs. That's a totally different idea from just leaving it as it currently is.

It's the same with Obamacare. He's moved forward on this, but it wasn't just from leaving the status quo in place. What we saw year after year was little nibbles around the margins, such as introducing benefits for the under-fives and that kind of thing, but no sustained plan to make sure that people who didn't have private health insurance were covered.

[Ake Blomqvist]

I'll mention that I don't think it's fair to say that we are advocating the status quo. We are advocating things like managed competition, for example, in the pharmaceutical sector, but we also advocate managed competition with respect to hospital and physician services.

We think the Canada Health Act at the present time is interpreted in a way that is actually counterproductive with respect to reforms that provinces could undertake if they weren't hamstrung by the desire of the federal government to be visible in the health care field. We don't advocate the status quo; we advocate the system that is status quo in the sense of being mixed private-public, but with integrated reforms in all aspects of the health care system, not just pharmacare.

[Colleen Flood]

We have been waiting for 52 years for incrementalism to work. That's quite a long time. That's older than I am.

[Ake Blomqvist]

If we didn't have a system that divided federal-provincial jurisdiction over health care, incrementalism might have worked a little better.

[The Chair, Liberal, Bill Casey]

Go ahead, Mr. Webber.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Mr. Chair.

I won't thank the panel here today because you've been thanked by most everyone else. I will pass my thank you on to our analysts and our clerk for the wonderful work that they do. Thank you for all the work you do for us.

I want to talk a little about the pan-Canadian Pharmaceutical Alliance and the fact that the Government of Quebec recently joined. I'm wondering if it's too early to tell whether there has been any impact from this decision in Quebec to join the pCPA. Can anybody answer that?

I'll pass that on to Madame Bourassa Forcier.