Health Committee on Dec. 6th, 2016

[Darshan Singh Kang, Liberal, Calgary Skyview, AB]

Okay, my next question was on generics. Are there any studies on, for instance, how much money is being saved by generic drugs compared to brand name drugs? Do you have any numbers there?

[Peter MacLeod]

I would refer you to the generic manufacturers industry association, which I know has extensive studies that can answer your question more conclusively.

[Darshan Singh Kang, Liberal, Calgary Skyview, AB]

Okay. Thank you, Mr. MacLeod.

My next question is to Dr. Lynd. During her appearance before the committee, an official from the PMPRB highlighted several challenges facing the organization, including controlling the high cost of drugs, especially drugs such as biologics, oncology drugs, and orphan drugs. In her testimony, the PMPRB official identified the need for the PMPRB's legal and regulatory framework to adapt to these changing circumstances and efforts to remain relevant and effective in protecting consumers from excessive pricing.

In your view, how does the PMPRB need to evolve in order to better control the high prices, especially for drugs such as biologics, oncology drugs, and orphan drugs?

[Prof. Larry Lynd]

Again, that's a question around international pricing control, which isn't my area of expertise. Looking at what's happening with the PMPRB and the challenges that they're having in court now, and looking at the ways they are trying to control prices—and they're having challenges with that—just speaks to my proposal of a disruption in our reimbursement and pricing process here in Canada. What the actual answer to that is, I don't know.

[Darshan Singh Kang, Liberal, Calgary Skyview, AB]

Should a national pharmacare program be developed? Do you see an ongoing need for the PMPRB? Why or why not?

[Prof. Larry Lynd]

Yes, I do, because I think we need to control the prices. I think if we look at where the prices are going with pharmaceuticals, particularly given the paradigm shift in drug development, we're looking at more development of personalized and precision medicines with drugs that are going to be orphan priced. That's just going to increase the need for price control with prices continuing to be pushed to the limit, as I foresee it.

[Darshan Singh Kang, Liberal, Calgary Skyview, AB]

Do you think the buying power of our national pharmacare will have some effect on getting the drugs cheaper, probably with the help of PMPRB?

[Prof. Larry Lynd]

That would be my opinion, yes. That's exactly the premise the pan-Canadian pharmaceutical alliance was developed under, to have a consortium to increase buying power. That would be my understanding and my belief.

[Darshan Singh Kang, Liberal, Calgary Skyview, AB]

Thank you.

[The Chair, Liberal, Bill Casey]

Your time is up.

That completes our seven-minute rounds. We're going to five-minute rounds now.

We're going to start with Dr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

I thank the witnesses for being here today.

We've had a lot of witnesses who are really putting forth one type of model, a monopolistic type of model, moving forward in Canada. I have had some challenges with the study we're doing because I don't see a lot of contrarian views, but I see you have brought up a few interesting points I would like to investigate a little further.

My first question would be to Dr. Lynd. My colleague asked if there's a system out there that is an example we could look towards. In Canada, we're trying to define who are the Canadians who are really having problems with it.

If you look across the world, you see the U.K. has put in a system that looks like more of a monopoly, but if you look at the results, there are certain restrictions on certain medications that are available in other parts of Europe. The U.K. has a worse cancer survival rate than these other countries. New Zealand has a monopolistic system. You actually see people from New Zealand moving to Australia just so they can get the drugs they need.

You mentioned that if we do put in a system like that, it really is going to affect choice. In other words, everybody gets it, or no one gets it. As a Canadian, if I pay into a system for years, and it comes to a point where I need medication—you're the expert here on rare diseases—would you say it's even fair if some bureaucrat is making the decision that I can't get these drugs covered under a system I paid into my whole life?

[Prof. Larry Lynd]

I guess my point was, I'm not arguing that every drug should be covered. If I'm saying everybody doesn't have access, I'm merely suggesting the evidence doesn't suggest that the drug has a significant enough impact on quality or quantity of life, or that the cost is such that it doesn't warrant reimbursement. That decision is being made, and not necessarily by a bureaucrat. I think we have multiple contributors to that decision-making process. It means everybody has the same access whether it be access to the drug, or maybe no access to a drug that we shouldn't have access to.

[Colin Carrie, Conservative, Oshawa, ON]

If somebody's advocating for a monopolistic system, and as I say, to look at the fairness issue, all Canadians will be asked to pay for it, should Canadians then be able to buy private insurance? In other words, if there are these unique drugs, and somebody who is advocating for a monopolistic system is trying to really help out all Canadians, and there's a portion of Canadians who can't get certain drugs, are we just transferring one system that's not covering people to another system that may not be covering people if we don't allow access to private insurance?

[Prof. Larry Lynd]

I'm not arguing for no access to private insurance, but I also think we can look at the private insurance industry. I think there's a paradigm shift going on there, too, where historically they have covered everything, and that's changing. We've seen it in the news in the last four weeks where they have been discontinuing coverage on biologics because of the pressure from the employers.

I think both systems work together, and they are looking at their reimbursement policies and procedures at the same time.

[Colin Carrie, Conservative, Oshawa, ON]

That's something we have to look at as well.

Again, I like the contrarian viewpoint. I think, Ms. James, you are one of the few witnesses we've had here.... You talked about heart and stroke and the emphasis you have on behaviour and lifestyle interventions, I think you said, and healthy living strategies.

What I find problematic.... In one of the contrarian viewpoints in your appendices, Mr. MacLeod, one person said we should be having this as providing a health benefit not necessarily a drug benefit.

Ms. James, in a national pharmacare program we would cover statins for life. We would cover blood thinners. We would cover blood pressure medication. Has your organization ever done a study, where if you can get people to take preventative measures—exercise, diet—how much of a cost saving that would be? Because if we're trying to get together for healthier Canadians, I think we should take a more holistic viewpoint of it.

My background is that I'm a chiropractor. I think you should look at natural interventions first before people get into drugs, but if we have a system in place like this, the easy thing to do is to take a drug.

Has your organization ever done a study on cost-effectiveness, on not going the drug route and saying, let's pay for interventions that may change lifestyle, change a person's weight? Have you ever done something like that?

[Lesley James]

It's a fantastic question. We have done things of that nature. Eighty per cent of heart disease and stroke is preventable through lifestyle modification, so changing physical activity levels, remaining smoke free, and most importantly changing a person's nutrition. We need to make sure that access to healthy food and fresh and whole unprocessed food is affordable for all Canadians, and that's a major challenge we're facing right now.

That said, there is a role for pharmaceuticals in preventing and treating cardiovascular disease, but much of this is within our control. Personally, we need a system in place that makes it easier for Canadians to make a healthy choice.

[The Chair, Liberal, Bill Casey]

Mr. Oliver.

[John Oliver, Liberal, Oakville, ON]

Thank you very much.

I want to begin by thanking the citizens' panel for the work that you've done. To come out of your homes and take on this study as volunteers is a wonderful accomplishment and the time and energy you've put into it is quite remarkable, so thank you very much for that.

The committee has been talking about this topic for some time now. I have been asking myself how to keep this as simple as we can. To me, the basic transaction is that a Canadian meets with a caregiver, doctor, nurse practitioner, then a prescription is written, and then they go into a pharmacy and receive the drug. There may be a small, flat dispensing fee, maybe a copayment to be determined, but they receive the drug, they go home, they take it, and—presto—25% of Canadians get what the other 75% have, that is, access to drugs.

For the pharmacists, there's a win. Instead of dealing with hundreds of private insurance plans, they have one organization they contact for reimbursement and for their fee. The first complexity, though, is what would be permitted and what prescriptions they could go in with. I heard slightly different views here from Larry and Peter.

The World Health Organization has already come out with a list of essential drugs. I think you recommended that the essential drugs are there. This is pretty simple; it's the Pareto principle. Eighty per cent of prescriptions are going to be coming from about 20 per cent of the available drug pool. Most of those are already in generics. Most of them are already under pretty aggressive pricing models. This should be a simple list to start with.

Then we add in the rare disease drugs and the other ones as we go forward and then we think about how to compensate it. The first thing is the establishment of that essential drug list. CADTH has said they think they could manage it. Did you have any thoughts on a new agency or letting CADTH take that on?

[Lesley James]

It's a great point. I think the World Health Organization's list of essential recommended medicines was compiled for a reason. They are cost-effective, they'll likely improve population health in the long term, and that's a first stepping stone for us as Canadians. I'm quite pleased that you brought that up.

I think whatever system we move forward with needs to be transparent. It needs to consider public administration and cost savings to Canadians. I can't speak to whether CADTH is the right agency for that, but there are options to look at elsewhere in the world. The U.K. has NICE. Other countries have different regulatory bodies to do that.

[John Oliver, Liberal, Oakville, ON]

Thank you.

[Lesley James]

Perhaps we have that in place in Canada already, or perhaps there's something different.

[Peter MacLeod]

We didn't look at the exact agency, but I think the panel endorsed the idea of an arm's-length relationship. They really want this to be an evidence-based exercise, and they want to preserve a role for citizens only.

[John Oliver, Liberal, Oakville, ON]

Exactly.

It has to be evidence-based. There has to be clinical....

For Canadians who might be watching our committee, this is already in place. If you're going into a private lab, or if your doctor has asked you to get a lab test done, or if you're going into a private diagnostic, there are already mechanisms in place in every province for that lab or that diagnostic centre to bill the province. As a Canadian, you don't pay when you go in for those services. We're broadening that out to include pharmacies, but the structures in the billing processes are already in place in every ministry. Some of those labs and tests are not insured, and then you pay for it yourself, but most are insured. There is a choice, then, that the consumer has: pay for something a bit different or to stay in the publicly-funded plan.

How do we pay, after we've decided what drugs are in the formulary? I saw you came up with some suggestions around potential income tax changes, corporate taxes. Forty per cent to fifty per cent of Canadians right now are insured by private plans through their employer. Would it make sense to you that those costs would be recovered through some kind of corporate tax? This way it wouldn't cost the employer any more, and we could use those funds to publicly administrate the plan.

[Peter MacLeod]

You've got it. Exactly.

[John Oliver, Liberal, Oakville, ON]

Then on the specialty or the rare disease drugs, is there a panel capacity in place that would somehow.... I can see these are very complex. There's lots of diversity. We've heard from tons and tons of rare disease groups about their concerns about access to new and emerging treatments, and how we could quickly adopt those and bring them into a restricted formulary.

Do you have any advice on who should be doing that?