Good morning, Mr. Chair, and members of the committee. I'm pleased to address the Standing Committee on Health as the senior assistant deputy minister of the first nations and Inuit health branch at Health Canada.
This is my first appearance before your committee. I am thrilled to have this very productive discussion with you, and I look forward to building a good working relationship with all of you.
Before I continue, let me introduce Scott Doidge, the director general of the non-insured health benefits program.
Today I will provide you with a general overview of our mandate and programming followed by more specific information related to the non-insured health benefit program. Health Canada, through the first nations and Inuit health branch, is committed to ensuring that first nations and Inuit communities and individuals receive a range of health programs and services that are responsive to their needs. The overall objective is to improve their health status.
As you know, First Nations people and Inuit face significant health challenges. When compared to the general Canadian population, they have a shorter life expectancy, a higher rate of chronic diseases, such as diabetes, and of communicable diseases, including tuberculosis and HIV, as well as higher mortality and suicide rates.
They also face greater challenges when it comes to social determinants of health, such as high unemployment, lower levels of education and higher rates of overcrowded housing.
In addition, first nations and Inuit face historical legacies such as colonialism, the disconnection of culture, and the intergenerational impacts of Indian residential schools. The health care system for first nations and Inuit is complex. Provinces and territories deliver hospital, physician, and public health programs to all Canadians, including first nations and Inuit, but do not operate health systems on reserve. In order to support first nations and Inuit in reaching an overall level of health that is comparable to other Canadians, Health Canada funds or provides a range of health programs and services in first nations and Inuit communities.
In this context, Health Canada works with First Nations, Inuit, and provincial and territorial partners to deliver effective, sustainable and culturally appropriate health services and programs, with a view to improving health outcomes and to giving them more control over the health system.
There are five elements funded by Health Canada to support first nations and Inuit health: health promotion and disease prevention, public health protection, primary care services, supplemental health benefits, and health infrastructure support.
Today I'm going to focus my presentation on the non-insured health benefits, and drug and pharmacy components.
The NIHB program is one of the largest health benefit programs in the country. It is national in scope and provides medically necessary health benefits to over 839,000 first nations and Inuit living on and off reserve.
In addition to pharmacy benefits, the NIHB program also provides coverage for medical supplies and equipment, dental benefits, vision care, mental health counselling, as well as medical transportation to help clients access medically necessary health services that are not available in their community.
NIHB's mandate is to cover items that are medically necessary based on clinical and scientific evidence. The NIHB program does not require deductibles, premiums, copayments, or user fees. There are no annual limits for medically necessary coverage. Providers are encouraged to bill the program directly so that clients do not face out-of-pocket expenses.
Last year, total NIHB expenditures were over $1.1 billion, with pharmacy benefits accounting for the largest proportion of these expenditures at $427 million. Approximately 514,000 NIHB clients used their pharmacy benefits at least once in 2015-16, resulting in a utilization rate of 61%. This utilization rate has been constant over the last five years.
I would like to speak to you about the NIHB program's formulary management approach, which is aligned with that of other public drug plans in Canada. Whereas a private payer may provide coverage for a drug once it has been approved for use in Canada, NIHB and most other public plans take a formulary management approach whereby the coverage provided is based on clinical effectiveness, cost-effectiveness, and safety.
The NIHB program's pharmacy benefits are outlined in the program's drug benefit list, called DBL. Medications are divided into three categories. Open benefits are listed in the DBL and have no established criteria, gender, or age limitations, or prior approval requirements. Limited use benefits are also listed in the DBL with coverage criteria. Coverage is provided when the established criteria, the prior approval requirements, are met.
Exceptions are not listed on the DBL. These are drugs that may be approved for coverage on a case-by-case basis when an exceptional need is demonstrated. NIHB coverage ranges from very low to very high-cost pharmacy items. For example, low-cost blood pressure medications may cost about $150 a year per client. Biologics for diseases, such as rheumatoid arthritis or psoriasis may cost in the range of $20,000 to $50,000 per year per client, and oral chemotherapies and high-dose biologic therapies for ulcerative colitis or Crohn's disease may cost in the range of $50,000 to $150,000 per year. At the very high end of the spectrum, enzyme therapies such as Adagen, Vimizim, or Aldurazyme may cost as much as $1 million per client per year.
The non-insured health benefits program also covers selected non-prescription drugs that are not normally covered under other public plans. These include therapeutic vitamins such as vitamin B12 and folic acid, prenatal vitamins, smoking cessation products, antihistamines, topical antibiotics, non-hormonal contraceptive methods and over-the-counter pain medication.
All efforts are made to process non-insured health benefits pharmacy claims as efficiently as possible. Approximately 96% of the non-insured health benefits pharmacy claims, amounting to around 16 million claims annually, are automatically approved at the point of service through an electronic system that does not require any paper forms. Only 4% of claims require the NIHB program to seek further information to ensure that requests are aligned with coverage criteria, just like other plans in Canada. Most of these NIHB claims are processed within half a day.
Evidence-based decision-making is the guiding principle. Once Health Canada has approved a drug for use in Canada, the NIHB program must decide if the drug will be eligible for reimbursement. Like most other public drug plans in Canada, the NIHB program participates in the common drug review, CDR, process and the pan-Canadian oncology drug review process, pCODR, which provide listing recommendations to participating public plans.
Common drug review recommendations are made by the Canadian drug expert committee, and pCODR recommendations are made by the pCODR expert review committee. These committees, made up of independent experts, synthesize the best available evidence by using rigorous peer-review processes. They assess the cost of the drug in relation to its clinical effectiveness; therapeutical advantages and disadvantages; availability of comparable drugs; shorter- and longer-term medical benefits; potential costs for the health system; and input from patients, drug manufacturers, and clinicians.
Though the NIHB program does not require a CDR recommendation to cover a drug, the program typically follows CDR recommendations.
In addition to the recommendations made through the CDR process, the NIHB program relies on its own drug therapeutics advisory committee, DTAC, to seek expert recommendations specific to drugs related to the therapeutic issues of its clients. Most Canadian public plans have a similar dedicated expert advisory committee to supplement the advice provided through the CDR.
The DTAC is an advisory body of highly qualified health professionals who bring impartial and practical expert medical and pharmaceutical advice to the NIHB program to promote improvement in the health status of first nations and Inuit clients through effective use of pharmaceuticals. Like the CDR process, the approach is evidence-based and the advice reflects medical and scientific knowledge, utilization trends, current clinical practice, health care delivery, and specific departmental client health care needs.
The NIHB drug coverage is generally aligned with that of the provinces and territories, given that most public drug plans in Canada follow the advice of the Common Drug Review.
The program has conducted a listing comparison of NIHB versus other public plans, based on available Canadian Institute for Health Information data. According to this analysis, approximately 75% of NIHB pharmacy claims in 2015-16 were for medications that had the same listing status as other provincial and territorial formularies. Approximately 16% had a less restricted listing status than provincial and territorial formularies, including medications such as antiretrovirals and hepatitis C medications. The remaining 9% of NIHB claims were medications that had a more restricted listing status under NIHB than provincial-territorial formularies. This includes claims for methadone and long-term opioids.
In July 2010, the NIHB program secured a ministerial mandate to enter into product listing agreements, confidential agreements between drug plans and drug manufacturers to list medications in exchange for rebates. The program entered into its first PLA in October 2010, and had negotiated 42 agreements by December 2015. These agreements allowed the program to provide its clients with more open access to newer and higher-cost medications.
Joint work through the pan-Canadian pharmaceutical alliance is expected to bring greater alignment by providing participating plans with access to the same price reductions through joint PLAs. The NIHB program has entered into 24 new PLAs since joining the pCPA in January 2016.
I would also like to take this opportunity to tell you about the NIHB prescription drug abuse strategy.
The NIHB program has taken a broad range of measures to ensure that eligible First Nations and Inuit clients receive the medications they need. This important work is grounded in the design of the plan under the program, which conscientiously follows an evidence-based list of insured drugs, to ensure that medications are reimbursed based on clinical evidence.
The formularies management approach to PDA has included delisting drugs of concern such as OxyContin, Tylenol 4, brand-name Ritalin, Demerol, and other drugs. The program has also restricted the listing status of other drugs of concern, moving them from open benefit to limited use, and introducing enhanced coverage criteria.
The NIHB program—
