Health Committee on Nov. 29th, 2016

[The Chair, Liberal, Bill Casey]

I call the meeting to order.

I'd like to welcome our guests this morning. We're continuing our study on a possible national pharmacare program.

I want to start with Dr. Thomas Perry, because he has a technical display. We have the technician here for a short time. We want to make sure that everything works.

Before we start the presentation, he's provided us with a brief for each one of us, but it's only in English. I need unanimous consent to distribute these only in English. Do I have unanimous consent?

[Some hon. members]

Agreed.

[The Chair, Liberal, Bill Casey]

Okay. The clerk will distribute them.

Just give us a second, Dr. Perry, and we'll continue with your presentation.

Dr. Perry is from the University of British Columbia Therapeutics Initiative, and he is chair of the education working group.

Dr. Perry, you have 10 minutes to start off, and we look forward to your remarks.

[Dr. Thomas Perry, Chair, Education Working Group, University of British Columbia Therapeutics Initiative]

Mr. Casey and the committee, thank you very much for inviting me.

Much of what I'm going to say you have heard in different forms from a number of your witnesses, so I'll try to be as fast as I can and give you time for questions.

I'm presenting on behalf of our group, which is an independent group at the University of British Columbia. We have a grant through the provincial ministry of health. I don't want to sound immodest, but we have an international reputation for the quality of our work, and we have no conflicts of interest. That was a policy established when we were founded in 1994—absolutely, strictly no conflict. My colleagues said, “Don't disclose your own conflicts because none of us have conflicts related to the drug industry or this topic.”

I want to show you some of the lessons from our experience over the last 22 years, why we also feel that a national pharmacare program must be based on the best evidence if we want to get the best results, and why evaluation of drugs has to be independent of the pharmaceutical industry. This is a lot harder than it looks, but it's the only possible way to protect the public interest, not only in health but in taxpayers' dollars.

In British Columbia, PharmaCare started in 1973. This was an innovation of the government that was elected in 1972. It was popular policy, but there was no formulary, and any new drug was automatically covered. By 1989, the costs were compounding at 16% per year, which was doubling effectively every four or four and a half years. It was completely out of control, and it was irrational to say that the benefits were doubling every four and a half years. I know some politicians will say, “We will double your benefits every four and a half years”, but everyone knows this is impossible.

In 1994, because of this pressure and a very large provincial budget deficit at the time, the Ministry of Health realized it needed unconflicted advice on whether it should pay for new drugs. It established our group with a very strict conflict of interest policy: no pharmaceutical stock holdings, no money from drug companies, no going to drug dinners, and no contact. This was to protect us and isolate us, not from the intellectual issues but from the possibility of being compromised.

Then the Ministry of Health developed the courage to actually make funding decisions based on the results of this process, which was the real innovation in British Columbia.

The critical elements are to clarify the scientific evidence, free it from conflict and bias, start with an open mind, be rigorous about assessing the evidence, come up with a summary of the evidence, and turn that over to the Government of British Columbia, which then made its funding decisions.

It must be evidence, not opinion. If I say as a doctor that I find, for example, that opioids seem to work nicely for some of my patients with chronic pain, that's not adequate evidence for a policy decision. It might be in clinical practice, but not for government policy decisions. We need randomized clinical trials to have that kind of knowledge.

The results are that by 2007—I'm taking this point of time because we have the Canadian Rx Atlas that Professor Steve Morgan compiled that shows us this—the per capita drug costs were sufficiently lower in British Columbia that had we been at the Canadian average, we would have been spending $701 million more every year as of 2007. That would be much higher now.

We felt that $208 million of that savings came from choosing lower-cost drugs, which is partly referenced-based pricing. Another part of the saving was that PharmaCare did not cover many expensive drugs reimbursed by other provinces. I've chosen two examples to make this point to you. Drugs for Alzheimer's disease are the first example, and the other drugs are the so-called COX-2 inhibitors that were competitors for ibuprofen and naproxen, introduced starting in 1999 for use mostly with osteoarthritis and rheumatoid arthritis.

We found that there was not evidence that these drugs were effective or better. PharmaCare in British Columbia declined to pay for them. Subsequent academic studies demonstrated that this led to no harm, but almost certainly must have saved potentially hundreds of lives in British Columbia alone, and that it saved a bundle of money for the taxpayer.

This became the precedent for the common drug review that you heard about in some of your earlier meetings.

I'll give you an example. The so-called COX-2 inhibitors, first licenced by Health Canada in 1999, were promoted as much safer, and some of you will remember the ads for Celebrex or Vioxx. However, within a few years both the brand name Vioxx, rofecoxib, and valdecoxib were removed from the market almost immediately, so most of you won't have even heard of them. Then lumiracoxib, which caused liver toxicity, was later removed, so you may not have heard of that drug either, but they were all licensed in Canada.

We looked clearly at the evidence and found that it clearly showed that these drugs were not superior to other drugs. We were vilified at that time as an academic group, including by our senior academic leadership. I know what it feels like to have the department head say, “Well, you're with the Therapeutics Initiative, but you may still come to our dinner”, and yet we were right.

The reason we were right is that we read the experimental evidence, such as was available, carefully. PharmaCare, on that basis, did not pay for them. The results were that our consumption was much lower than Ontario's, for which there is comparison. We didn't see the large rise in prescriptions that Ontario did. We had fewer hospitalizations per capita for gastrointestinal hemorrhage. We had much lower costs. The reason we achieved this was that the British Columbia government listened to the scientific evidence in a way that other governments did not.

A second example is donepezil, rivastigmine, and galantamine. Anyone who's had a relative with Alzheimer's disease or dementia will be in some way familiar with the names of these drugs. They were alleged to offer hope for people who have no other hope. They were very heavily promoted and aggressively advertised. The real evidence showed, and still shows, that they were basically not effective. Even an article by André Picard in today's Globe and Mail refers to this. They were dangerous for some patients. They would have almost certainly caused falls, collapse, fainting spells, diarrhea, urinary incontinence, etc.

PharmaCare did not pay for them. Again, both the government and the independent agency that provided the scientific review were vilified because these drugs were so heavily promoted as useful. I don't think there's anyone serious in the world now who feels that these drugs really are beneficial, possibly with rare clinical exceptions. The results were that we used fewer of these drugs in B.C. than in other provinces. I think there's universal consensus around the world that British Columbians didn't miss anything.

We know from certain other studies about the reference pricing initiative that PharmaCare saved very substantial amounts of money. The initiative was a decision that we would pay for the lowest-priced drug of a class where the drugs appeared to all have similar effects. This would include drugs such as ACE-inhibitor drugs for blood pressure, statins—as done in New Zealand—and calcium channel antagonists. Studies done partly by our group and partly by people at Harvard University demonstrated that there were no harmful consequences.

Then why are we here? I put this in to remind you that this is not the goal. The goal is not to have many more drugs. From some of his questions that I read from previous testimony, I think that Dr. Eyolfson is well aware that doctors, increasingly, are relatively poorly informed about drugs. Dr. Anne Holbrook also made this point to you. We don't want a student, like the one in this picture, facing a crazy desk full of drugs and trying to make rational decisions with drugs paid for either by somebody's out-of-pocket private money or by public money—certainly not public money.

Nor do we want what is shown in the next photo.. This one is from September, two months ago. It is a women who is overly sedated with three different sedative antidepressant drugs and is using four antidiabetic drugs. One of those antidiabetic drugs, the long insulin pen there, is a new version of a long-acting insulin that has no possible, conceivable advantage. It was reviewed by the common drug review, which recommended it not be listed. It's not paid for by the taxpayer; it's paid for out of her pocket. This is a women who, as a foster mother, raised a lot of children with fetal alcohol syndrome, as well as children born to mothers with heroin addiction. She needs money, and she's throwing her money away on these drugs. This is not the point of national pharmacare. The point of national pharmacare should be to help avoid that, if possible.

This speaks to what we really need, and Dr. Monica Dutt made this point to you when she raised the case of a young boy with type 1 diabetes. Without insulin, he dies. His mother was apparently begging her, if I understood her testimony correctly, for samples of some insulin, because she literally could not afford it.

That's what pharmacare should be about, in the same way that the purpose of medicare in Canada was to deliver useful treatments to people who really needed them, whether you cite Tommy Douglas or Emmett Hall or whomever as the father or the mother of medicare.

The logical expectation, then, should be—and here I echo many other witnesses—first that we should improve the health of Canadians, should not increase the harms, and should reduce drug costs and be proud of doing it, so that we can be sustainable and can fund the other determinants of health, such as clean water, proper nutrition, education, housing, and physical fitness, which are all suffering now in my province. We're spending so much money on health care, including drugs, that we no longer have music programs in our schools, for example. Also, as you know, we have many reserves all over the country without clean water.

The technical requirements to do this are that we need to base the policy on the best evidence, and it must be derived by people who are not conflicted. This point has been made in the United States for guidelines. We're lagging behind in Canada, but we're getting there.

Also, the independent group requires real expertise. I read again Anne Holbrook's testimony to you this morning and saw that she pointed out that there are very few clinical pharmacologists left in Canada. We need educators and independent expertise to do this.

I'm going to wrap up there. You have in your handout, I think, the list of other members of our academic group who contributed to the Therapeutics Initiative.

Thank you very much.

[The Chair, Liberal, Bill Casey]

Thank you very much for the presentation and explanation.

Now we're going to go to the Arthritis Society, with Janet Yale, president and chief executive officer.

You have 10 minutes.

[Janet Yale, President and Chief Executive Officer, Arthritis Society]

Good morning.

I am happy to appear before the committee.

It's really a pleasure to be here this morning. Let me begin by thanking the standing committee for inviting me to appear today.

I'd like to start with a couple of facts. First, arthritis is a disease. I say that because many people don't see it that way, but that's exactly what it is: it's a disease, not an inevitable aspect of aging. It responds to treatment, to therapy, and as we're here to talk about today, it responds to medicine.

Second, arthritis is a chronic disease, and that's vitally important. A lot of the focus around medicine has been dedicated to those with acute conditions, and that's of course totally understandable, but we have to also address those who live with chronic disease and chronic pain and whose quality of life depends on affordable access to the right medicines.

How many Canadians are we talking about? It is 4.6 million, and that number is growing. Current trends suggest that by 2030 that number will double to nearly 10 million Canadians. Not only in health-care terms, but in economic terms, the toll is enormous. Arthritis is the second-leading cause of disability. It takes people off the job and out of the workforce, costing, according to our estimates, $33 billion a year, and two-thirds of that is lost productivity. By 2040, we'll be looking at an annual economic impact of double that. We call that the “arthritis tax”.

I'm not even touching on the intangible but very real human costs of arthritis, such as the young child with juvenile arthritis can't play outside with his friends, a young mother whose disease is so advanced that she can't pick up her children and hold them, grandparents who finds it so painful that they don't travel to visit their family.

Those are the intangible but very real human costs of arthritis. I raise that because I want to underscore the enormous good that can be achieved with fuller, more affordable, and more equitable access to medicines.

Let me offer the first of two core recommendations to you today by saying, yes, the Arthritis Society strongly favours universal pharmacare, a program that will plug the loopholes, the gaping holes in coverage that people with chronic disease face today, an approach that will expand access to medicines, boost productivity, and combat pain.

Let me assure you that based on those I talk to regularly, the need is great. As we all know, in hospitals the cost of those medicines is covered, but those living with arthritis typically aren't in hospitals, and coverage is inconsistent. In 2013 we surveyed more than 1,000 Canadians with arthritis and found that only 63% reported they had workplace insurance plans. That's nearly four in 10 who aren't covered, resulting in large numbers who end up having to leave the workforce, retire early, because their treatments don't allow them to remain productive. For those with private plans, we're seeing an increasing litany of challenges with some drugs covered, others not, copayments rising, and benefit caps becoming more common. Most concerning of all for us, choice can be limited, with newer therapies having restricted access.

That takes me to my second really important recommendation. Yes, we want to see a national pharmacare program, but it can't be built solely around the idea of lowering costs. It also has to have a substantial commitment to choice. Let me explain.

I know that for many, one of the benefits of a national pharmacare program is the idea of reducing the prices for more expensive drugs. By establishing a larger or even national formulary, our collective bargaining power can drive prices down, allowing us to buy in bulk and potentially save large amounts of money. We applaud that idea, but we can't risk establishing a formulary that is too restricted in terms of the range of medicines that are available, because the reality is that people living with arthritis each respond to different drugs differently.

A range of choice is therefore important, and that applies particularly to some of the more expensive new drugs called “biologics”. That new category of drugs includes living organisms. They're biologic, not chemical, compounds. Because of that, they interact differently with different individuals, according to that person's biological makeup. They can be a miraculous life-changer.

I'm going to tell you one story. A young man named Matthew was on his way to being a star athlete when he was diagnosed with rheumatoid arthritis and was completely incapacitated. He dropped out of school, had no ability to function, and was in constant pain. Now, thanks to biologics, he has been able to turn his life around. His pain has reduced dramatically. He's able to finish university and start looking at a career. That's not beyond his grasp, even though being an athlete is not going to happen for him.

However, the problem is the cost. His drugs cost between $20,000 and $25,000 a year, and since he's out of school, he's no longer on his father's plan. The family is looking at funding that and, effectively, looking at financial ruin because they want to make sure their son gets the life-changing treatments he needs.

We need universal pharmacare. That would make sure that people like Matthew were covered. However, it won't work if we're too narrow in our approach, because as I said, biologics affect different people differently, so if we restricted access to one biologic in the class for people with arthritis, many people like Matthew would not be well served. Similarly, if we force people to switch treatments to cheaper alternatives such as biosimilars, which are now emerging, it could also result in reduced therapeutic benefits.

From our perspective, it is the patient at the centre of the decision, in consultation with their health care provider, who should determine the treatment and medicine that is most appropriate for them. I know that's not a simple choice. Expanding that choice and leaving choice available would offset some of the savings that might otherwise be achieved through national pharmacare, but we think a balance is required to establish a system that truly serves the needs of Canadians, especially those with chronic diseases like arthritis.

Universal pharmacare is needed. With 4.6 million people living with arthritis and struggling to pay for their medicines, that is clear. I urge the committee to establish two guiding imperatives, not one. Lower cost and wider choice will be the recipe for real progress.

On that, I'll conclude my remarks. I look forward to answering your questions.

[The Chair, Liberal, Bill Casey]

Thank you very much.

Now we move to the Canadian Federation of Nurses Unions with Linda Silas, President, and Anil Naidoo, Government Relations Officer, and our most loyal witness.

[Linda Silas, President, Canadian Federation of Nurses Unions]

Thank you very much, Mr. Casey and committee members.

You have copies of both our submission and my speaking notes, and I'll try to stick to them.

First of all, merci, and a big thank you to your team, Monsieur Gagnon and company. My first scheduled appearance was May 17, and we've been juggling dates because it's been so important for us to appear in front of you.

As stated, I am national president for the nurses unions. We represent close to 200,000 working nurses across the country, including nursing students, and we are one of the strongest advocates for a national pharmacare program.

We commend the committee for your mandate, which is the development of a national pharmacare program. It's not another study; it's the to-do list on what we're going to see.

We've lobbied the Council of the Federation, and I'll talk about it. We've directly lobbied federal and provincial health ministers and gained lots of support there, and of course we've lobbied in federal election campaigns and provincial ones.

We've also published research material from Dr. Marc-André Gagnon of Carleton University, “A Roadmap to Rational Pharmacare Policy in Canada”. You would have had copies of it in the past.

Some may be asking why nurses are the strongest advocates for a national pharmacare program. It's simple: on every shift, every night and day, we see either the impact that not taking their prescribed medication has on patients or we see the impact of the provinces and territories having to struggle with their health care budgets and having to cut, because $30 billion of the health expenditure in this country is spent on prescription drugs. That is four times what was spent 20 years ago—and yes, 20 years ago I was a nurse.

We are about to publish a new paper on the cost of drugs, but it's going to have a different economic twist. It's going to be about the billions that this country is wasting. That will come out in early December, and I'm sure you will all get a copy, probably laminated with pictures to make sure you all read it.

We have heard that many Canadians pay some of the highest prices in the world for prescription drugs, and these costs are predicted to increase further in the future as we pay for more complex drug therapies, an aging population, and expanding patent protection regimes.

We know that the provinces and territories, through the Council of the Federation, have moved to lower drug costs through bulk purchasing. We also know that there are limits to what they can accomplish compared to a national prescription drug program with scope and efficiency. Not properly controlling drug costs directly hits provincial and territorial budgets and leads to cuts in health care budgets as a knee-jerk reaction.

It is frustrating for the nurses of this country to see governments spending far more than necessary on prescription drugs and then choosing to cut health services, leaving patients with poorer health care and more vulnerability. Based on the evidence your committee has already heard, it seems that there is only one answer, and it is clear.

To your committee and all elected representatives, on behalf of the front-line nurses I represent, I say that now is the time for action. The evidence is strong and the evidence is clear. What we need, and the challenge that we have, is to muster the political will to take action. We need to be asking not if but how we can implement the structure of a national prescription drug program for Canada.

To do this we must include the best practices from around the world and design a system that will fit within our Canadian context. It certainly can be done, and anyone who says it can't be done doesn't know the history of our country in achieving solid public policies that benefit all Canadians.

Yesterday I met with Minister Philpott. One of her team members said, in a little snarky remark, “Well, Linda, you just want the New Zealand model.” My reply was simple: we need a Canadian model, a made-in-Canada model based on all the evidence from around the world. What we're doing now is inefficient and too costly and, honestly, not too smart.

To be clear, we need a reform of our health care that will meet the needs of all patients. It could save billions of dollars. These billions of dollars need to be reinvested into first nations health priorities, a safe senior strategy, and health human resources, mental health, long-term care, and home care, just to name a few.

The Liberals promised $3 billion in home care. Studies have said that a national pharmacare program would cost between $1 billion and $4 billion, with savings of between $7 billion and $11 billion. In my quick calculation, that's a pretty good rate of return, and that could pay for home care, mental health demands, and everything else we've been hearing about on health care.

Of course, implementing a national pharmacare program should be done with clear steps, and this is what we're hoping this committee will be able to give the federal government: clear steps to implement a national pharmacare program. It will require governments across the country and health care professionals to work together.

It will also look at the covered workplace benefits. Moving to pharmacare will limit the open formulary currently used by insurance companies. As a union leader and negotiator, I know that and I support it, but just as they've done in the past, insurance will adapt and offer different products. I am not worried about the insurance companies at all.

Private insurance will continue to have a part in our health care system in some form, but having 60% of drug coverage for Canadians managed by private interests at a very high cost and without universal coverage is not in our national interest. Let's remember that government exists to ensure the needs of citizens are protected, and corporations have long adapted to shifts in public policies.

Our members favour national pharmacare based on the evidence and on an evidence-based formulary, and it will not result in workers rebelling. This is fiction. Many unions, including mine, have passed many resolutions promoting a national pharmacare program, and we continue. It is time that we applied a health lens to all government policy, and the best place to start is with prescription drugs.

I was there when the provinces and territories struck their first deal, co-operating on bulk purchasing. This saved about $490 million annually, and it will increase, but this is peanuts. We have to remember that we're a very small country in population. We're the same size as the state of California, and we need to do more than bulk purchasing. We have to change the way we do things with our prescription drugs, period.

I was also there during the last negotiation of the health accord. We don't want the same repetition. We don't need another committee to study national pharmaceutical products. That was my message to Minister Philpott yesterday. We need actions and we need them now. The provinces and territories cannot wait for another study on what to do with the health accord or what to do with pharmacare.

Let me conclude on a personal note. Many years ago I was a young nurse activist stomping my little feet and making noise because health care had been cut in my own beautiful province of New Brunswick. Some of you might remember. We had Premier McKenna, a full house of Liberals, and no opposition at all. Premier McKenna said, “Linda, stop complaining. Find solutions. I have no more money.”

Premier Gallant, Premier Notley, Premier Wynne—I can name the 13 of them—are all saying the same thing now: “We have no more money for health care.” We have to find a solution. We know the solution is about stopping the waste of billions of dollars in over-inflated costs of inappropriately prescribed prescription drugs. We have to start now with a national pharmacare program, reinvesting in the health of our communities and finally doing our job—or your job, as MPs.

Finally, we have to talk about trade, and I only have 10 minutes, so I'm finishing it right there. You have to exclude health care and any new programs when you negotiate trade with any other countries around the world.

Thank you very much.

[The Chair, Liberal, Bill Casey]

Thank you for your very clear message.

I'm moving right along now to Dr. Doug Coyle, Professor and Interim Director at the University of Ottawa in Public Health and Preventive Medicine.

Dr. Coyle, you have 10 minutes.

[Dr. Doug Coyle, Professor and Interim Director, University of Ottawa, School of Epidemiology, Public Health and Preventive Medicine, As an Individual]

Thank you, and I'd like to add thanks to my fellow speakers.

My name is Dr. Doug Coyle. I am currently a Professor and Interim Director at the School of Eepidemiology at the University of Ottawa. I am a health economist and have worked in this research area for the past 26 years. As with Dr. Perry, I have no conflicts of interest to report.

I am a member of the Ontario Ministry of Health's committee to evaluate drugs, where I help make recommendations on the funding of new pharmaceuticals. I was previously a member of the Canadian expert drug advisory committee, which gives similar advice at the pan-Canadian level, and also the Ontario health technology advisory committee, which makes recommendations in the funding of new technologies to hospitals.

Thank you very much for giving me the opportunity to present my views today. At the University of Ottawa, I teach graduate students in the methods to appraise new technologies in terms of their costs and benefits, and whether or not they represent the best use of our scarce health care resources. I've conducted a number of studies in this area on drugs, devices, vaccinations, screening programs, and exercise programs.

I have a passionate belief in the necessity of a publicly funded health care system. This is based, first, on the fundamental belief that equality in access to health care should be a right, and second—and we should never forget this—that the nature of health care as a commodity is such that provision through a market-based system is inefficient.

I've been asked today to present my views regarding a national pharmacare strategy. Before proceeding with my views, I'd like to remind you that when I moved to Canada in 1995, the issue of a national pharmacare strategy was a hot topic, but little progress, if any, has been made in the 21 years since then.

The common drug review and the pan-Canadian oncology drug review have been established to help provincial ministries review the evidence related to the costs and benefits of newly available pharmaceuticals. However, though both agencies have a process whereby recommendations related to funding are made, they do not have the ability to make these reimbursement decisions.

Recently the pan-Canadian Pharmaceutical Alliance, or pCPA, was established across provinces to assist them in discussing with industry possible solutions to allow the coverage of new pharmaceuticals through agreements in price. The federal government has recently joined pCPA. I am going to talk about some of the issues related to that for the rest of my talk.

I believe that a fair, equitable, and transparent Canada-wide process for making the complex and difficult decisions with respect to reimbursement for health care interventions is a necessity to ensure the sustainability of our health care system. Although the developments that have taken place appear valuable, today I wish to highlight concerns with the current situation with respect to pharmaceutical funding.

These concerns relate to three fundamental principles by which a national pharmacare strategy needs to be organized: the need for fairness, the need for transparency, and the need for consistency in decision-making across all health care interventions.

Fairness should be at the heart of all decision-making with respect to health care. Thus, difficult decisions on what should and should not be covered need to be made through a process that recognizes the need to treat people equally. However, not all new technologies represent value for money. Despite industry claims, most, if not all, new technologies are unlikely to save money in the long term. The downstream costs that are averted through their adoption are not sufficient to cover the upstream costs of their purchase.

We need to assess whether prices given for new technology are justified, given their potential benefits. Ultimately, given that we work within a system with a constrained budget, the cost of providing one technology should not be measured in dollars and cents but in terms of the potential health benefits that can be realized by the funding of one technology rather than other technologies that we can no longer fund. For too long in Canada, reimbursement decisions with respect to pharmaceuticals have not recognized this basic tenet of decision-making.

With respect to the issue, there are clear problems with pCPA. Once negotiations begin with pCPA, it rarely fails to make an agreement with a company on a specific drug. We all know that if we walk in and tell a car dealer that we are going to make a deal, we won't get the best deal that's available to us.

Second, and more importantly for future decision-making, pCPA does not appear to have criteria by which it defines a bottom line in decision-making. For pCPA to be of any use in facilitating a national pharmacare strategy, it must develop a framework that allows identification of what is and what is not a good deal and be willing to walk away from the table when no reasonable deal is on offer.

Thankfully, there are research techniques that can assist in making such difficult decisions, and pCPA needs to adopt these.

I'd like to give you today the example of Soliris. Soliris, you've probably heard, is a drug for the treatment of a disease called paroxysmal nocturnal hemoglobinuria. Thankfully, we can call it PNH—I can't even pronounce those words—which makes it a lot easier for us to follow.

PNH is rare blood disorder. Soliris is effective. It reduces the incidence of thromboembolism, the major cause of mortality in this disease, and it reduces the need for blood transfusions, the major management cost of the disease.

However, Soliris costs $500,000 per patient per year. That's probably why you've heard of Soliris. An independent analysis conducted relating to Soliris found that it would be worth funding on the basis of equity, if a price reduction of 98.5% were achieved.

The funding of Soliris at its listed price would cost almost $25 million per annum, even if only 20% of those eligible to receive it would receive treatment. With that $25 million, we could provide many other health care services to Canadians that would provide much greater health benefits.

The pCPA did reach an agreement with the manufacturer of Soliris for the treatment of PNH. Given the necessary price reduction, it is highly unlikely that this agreement represents a fair and reasonable decision.

We should support innovation by ensuring that funding is given to those technologies that represent value for money, including those that are not commercially sponsored. By guaranteeing funding to new technologies, we are not helping industries. Industries that become too reliant on government subsidies and preferred supply arrangements stagnate and decline. This, I feel, is the current fate of the pharmaceutical industry.

If you were to proceed with a national pharmacare strategy, I would argue that we need to make transparency a fundamental principle. We need a much more transparent process in making decisions, as well as in transparency agreements between manufacturers and health care payers.

A major component of the pCPA is facilitating such agreements between ministries and manufacturers. These agreements are typically confidential, and thus no one can assess whether such agreements are in the best interests of Canadians. Openness encourages innovation and ensures fairness for all Canadians.

The final point I'd like to raise is the one I really want you to take home: the need for a more comprehensive approach to the funding of all health care interventions for all Canadians.

The focus today is on pharmaceuticals. This is in line with a typical focus on the funding of new technologies that have a commercial interest. This leads us to funding decisions that typically favour such technologies over alternative health care interventions, where profit is not a driving factor for those advocating for their coverage.

However, we need to consider all the technologies that are out there. Many existing technologies are underfunded, yet have evidence to support their effectiveness and cost-effectiveness. Many of these do not have commercial sponsors.

Given the changing demographics of our country and the increased long-term need for home care and long-term care, the continued focus on pharmaceutical coverage is, in many ways, missing the major potential problem facing our health and social care system. Care through hospices, home care services, and nursing homes suffer from a lack of commercial interest in promoting them and are often overlooked by those societies advocating for health care. There is a lack of funding for conducting research to highlight their benefits, and there is limited lobbying because of the lack of a commercial sponsor.

To summarize, I'd like to reiterate the following points.

For a publicly funded health care system to be sustainable, we must have decision-makers who are willing to make the difficult decisions not to fund specific new technologies. By failing to make such decisions in a consistent and fair manner, decision-makers are currently not doing their job. This is detrimental to Canadians as a whole. Fairness should be a key principle. Funding technologies that deny the availability of other technologies that provide more benefit is not fair. This is frequently the case with respect to funding for pharmaceuticals.

Transparency is key. The degree to which decisions on health care funding, especially for pharmaceuticals, are made behind closed doors through confidential agreements is scandalous and needs to be addressed.

Finally, although the focus today is on a national pharmacare strategy, I want to emphasize that sensible and rational decisions made on a consistent basis are required in the funding of all health care interventions, not just those with commercial interests promoting them. Thus a national health care strategy will be a longer-term benefit to Canadians and may ensure the sustainability of the health care system we all so passionately support.

I thank you all for your time.

[The Chair, Liberal, Bill Casey]

Thank you all for sharing your experience and knowledge with us. It's a big help to us in our study.

We're going to start our first round of questions now. They're seven-minute questions and answers, and we're going to start with Mr. Oliver.

[John Oliver, Liberal, Oakville, ON]

Thank you very much for your testimony. Just to show my colours, I'm a strong champion of the need for a national pharmacare program.

Linda and Janet, thank you very much for echoing and giving us additional testimony as to the need for that.

The focus of my questioning is more on construction, on how we would achieve it, and the optimal ways to make it work. My first question is more for Thomas and Doug.

It would appear from the advice we've been given that expanding the Canada Health Act to include out-of-hospital prescription drugs would be the most direct and easiest way to achieve that, versus establishing a brand new federal-provincial entity that would oversee a national plan. There would be an expansion of the Health Act. Do you have any comment on that and on how best to construct a plan?

[Dr. Doug Coyle]

I would probably fundamentally disagree with you. I'm sorry. I think we currently have a very bad approach to decision-making about funding of technologies at the provincial level. Allowing provinces or mandating provinces to provide pharmaceuticals on a wider basis to all Canadians as part of the Canada Health Act will in some way ensure what I think is inequitable coverage of individuals and will not address the fundamental issue, which is that we're prescribing too many expensive drugs that are unnecessary and that are causing a lack of health benefit to be accumulated by Canadians when there could have been more sensible and rational decision-making regarding what to fund and what not to fund across the whole health care system.

[Dr. Thomas Perry]

I think I agree with that. I don't purport to have expertise in this, but I was a provincial cabinet minister at one point in my life and I'm familiar with some of the difficulties.

I think the problem now is that the industry plays provinces off each other. I'm sure you're aware of that from your own health care background. If we're going to have a sufficiently efficient system through which we can also address the issues that Janet Yale raised, obviously when there's a very effective drug for someone with a devastating disease, all of us would like to see that drug being affordable for that person. The treatment with an effective drug may be more important than the visits to the doctor. In fact, undoubtedly they are, but the drug has to be affordable. Professor Coyle made this point nicely with the example of Soliris, which is an extreme one. I would strongly recommend that you review Kelly Crowe's report on CBC television. You should review it at least twice, because the report points out that the real cost of developing that drug was virtually nothing, possibly less than 1% of its present sales price.

[John Oliver, Liberal, Oakville, ON]

Mr. Perry, the common drug review that CADTH operates was based largely on a British Columbia model. Do you have any thoughts? It's led us with very high drug costs. I think we are the secondest-highest jurisdiction. Do you have thoughts on how to improve this situation, and what works and what doesn't work in that model?

[Dr. Thomas Perry]

Thank you for the question.

Remember that pricing is partly under the control of the Patented Medicine Prices Review Board, which has been a pussycat throughout its history. To the best of my knowledge, it has never exerted any serious attempt to control drug prices in Canada.

CADTH, so far as I know, was modelled originally on our process in British Columbia; however, it repeated one of the mistakes the British Columbia government made in 1994-95, which was to guarantee secrecy to the pharmaceutical industry sponsors on the grounds of protecting commercial or trade secrets. A detailed report that I produced, for example, on donepezil—the brand name is Aricept—was never released to the public because the British Columbia ministry had agreed with Pfizer not to release it.

On the common drug review, I'd like to give you an example. I was invited to participate in the review of two drugs, but I'm not allowed to tell you which, so I'm not going to. However, the drugs reviewed were pregabalin—brand name Lyrica—for pain, and a form of fentanyl that can be taken under the tongue or in the mouth.

As a condition of that work I was paid $10,000, through a contract with UBC; I was obliged to sign a confidentiality agreement that I would not disclose anything I learned to anybody, including the people of Canada; and I was approved by UBC and its ethics committee, which is an outrage, I think. I'm very impressed that a meeting like this is available to all the people of Canada in both languages.

What I learned as part of that procedure that I'm not telling you is that pregabalin was less effective than an old drug, amitriptyline, for neuropathic pain, pain in the feet of people with diabetes, and barely better than a placebo. To its credit, the common drug review did not recommend that this drug be listed on provincial formularies. Who paid, however, for all of the work that went into that honest academic assessment of the drug? Why did the studies that the company did not publish remain secret? That's what needs to be fixed with the common drug review.

[John Oliver, Liberal, Oakville, ON]

Okay. Thanks very much.

So then, Doug and Thomas, we have the Patented Medicine Prices Review Board and we have the pCPA. If we were to move, to one common priced-out formulary, to whom would you give ownership of that?

[Dr. Doug Coyle]

I would start again. The pCPA doesn't have the expertise to review the effectiveness and cost-effectiveness of therapies, and the PMPRB doesn't have that expertise either. I think we need to have a national body not unlike the NICE in the U.K., which has a comprehensive independent approach to the evaluation of new technologies—not just drugs—and allows an assessment of their value for money.

NICE has criteria. NICE looks at how much they spend on health care—

[John Oliver, Liberal, Oakville, ON]

I'm sorry; what does NICE stand for?

[Dr. Doug Coyle]

It used to be the National Institute for Health and Clinical Excellence, but I'm pretty sure it has changed its name again.

[Dr. Thomas Perry]

It's the National Institute of Clinical Excellence.

[Dr. Doug Coyle]

That's what its old name was—that's why it was NICE—but it changes its name on a frequent basis. It has changed it again.

[John Oliver, Liberal, Oakville, ON]

So you recommend that we look at that?

[Dr. Doug Coyle]

Yes, very much. What they actually have is a bottom line. They've looked at how they spend health care dollars—well, health care pounds—and they look at the benefits that obtained, and they work out how much they would lose by funding one technology over another. They've come up with what the value of a health technology should be, and technologies not funded unless they make that value.

That's my concern about pCPA: there is no bottom line. They go into a room thinking, “Any deal will do; let's hope we get 25% off this time. Maybe we'll get 30%, if we're lucky.” There's not actually a comprehensive approach that says, “If we fund this drug and it doesn't reach the threshold, it's going to be bad for Canadians.” That's the approach that NICE takes.

[The Chair, Liberal, Bill Casey]

The time is up.

Dr. Carrie, you have seven minutes.