Health Committee on Dec. 13th, 2016

[Mostafa Askari, Assistant Parliamentary Budget Officer, Office of the Parliamentary Budget Officer, Library of Parliament]

I suppose it depends on the committee's requirements. Typically, when we start a project, we go to work on it, finish it, and then report back to the committee or the member. In the meantime, if the committee required some updates on where we are and what the status of our analysis is, we would be happy to come back and provide that, or we could provide it in writing to the chair.

[Doug Eyolfson, Liberal, Charleswood—St. James—Assiniboia—Headingley, MB]

All right. Thank you.

At this point, I'll yield my time to Mr. Oliver.

[John Oliver, Liberal, Oakville, ON]

I have a question around aggregates.

You're estimating the net cost to the federal government—the net cost—and you say in one of the bullet points that all aggregate costs and projections would account for opportunities for savings.

I just want to confirm something. We know there's a significant spend already happening in the public sector for benefit programs that would no longer be required if a national pharmacare program were created. Also, there's a spend in the private sector to provide private drug plans to employers, which could be converted now and turned into the public system. Are those costs going to be identified and brought forward in the estimates of both offset costs for government and also potential sources of funds?

[Carleigh Malanik, Financial Analyst, Office of the Parliamentary Budget Officer, Library of Parliament]

If I can just make sure I understand the question correctly, when we're looking at the aggregate costs to the federal government, you're wondering if we're going to include the portion that's currently spent under public programs as well as the portion that's spent under private programs.

[John Oliver, Liberal, Oakville, ON]

Correct.

[Carleigh Malanik]

Yes, we would.

[John Oliver, Liberal, Oakville, ON]

Okay. Excellent.

In terms of the cost of the study, the $100,000 includes the cost of data purchases. You note in your material that the data you acquire would be your property, then, and would have continued value. Besides this study, do you see other value from that purchase of data?

[Jean-Denis Fréchette]

We hope so. It will exceed $100,000. That's the threshold. It's going to be exceeding the $100,000. We know that for now, in terms of the preliminary discussions we've had so far, we hope it's going to be useful for other studies in the future. That's why we have this condition of being the owner of the data for future use for whatever reason.

[John Oliver, Liberal, Oakville, ON]

Okay.

[Jean-Denis Fréchette]

The problem will be to have access to those data and to pay for them.

Just to be clear, if I may, Mr. Chair, we are facing two situations. We need to negotiate that contract, which will be over, as I said, $100,000. I'm also negotiating with the Quebec government because, as you know, the model that you proposed to the PBO is the Quebec pharmacare system. We need their Excel files to have access to all the lists of not only the drugs covered but also the prices paid—not the prices paid at retail, but the costs paid by the system over there. We're in negotiations with the Quebec government right now in terms of accessing that kind of information. Otherwise, if we don't have that, it's going to be very difficult.

We do have the PDF documents of all these 8,000 or so drugs that are on the Quebec list, but the PDF is thousands and thousands of pages. We need the Excel electronic files for that.

[John Oliver, Liberal, Oakville, ON]

Okay.

Then in terms of estimating the cost, you'd be using the Quebec cost data, but we know that Canada's currently the second highest payer for pharmaceuticals in the world, or among the nations we compare to. Are you looking at any models of how a national program would be able to negotiate different prices? Are you building in thresholds around negotiations of pharmaceutical prices and providing what the projections might be?

[Carleigh Malanik]

I can answer that.

It's certainly in our methodology to attempt to incorporate that, but this is all going to be contingent on what actual data and information are available. It's certainly in the methodology framework currently.

[John Oliver, Liberal, Oakville, ON]

Thank you.

[The Chair, Liberal, Bill Casey]

We're going to Dr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Mr. Chair.

I want to thank the witnesses for being here.

Mr. Fréchette, I hope you don't mind, but I'm going to push you a little bit more on that word “exceed” $100,000. It seems very low to me. I was wondering if you're looking at that. I always get nervous when we're give a number and then it's expected to be exceeded.

I have a lot of confidence in your predictive abilities, so when I'm looking at six months, two employees, and having to buy all this data, I'm wondering, is it going to be tripled? Is it going to be 10 times the amount? Do you have any general idea? Could you give that information to us?

[Jean-Denis Fréchette]

Thank you for the question.

The $100,000 is only for the data. It's not the total cost of the project for this committee. It doesn't include the two full-time equivalents that will be absorbed in the normal operations of the office. It doesn't include any overtime and so on. The $100,000, just to be clear, is to buy the data and the information that will be required to conduct that project. As I said, a single contract with one company will be over $100,000. Mr. Chair, I prefer not to mention exactly the amount.

[Colin Carrie, Conservative, Oshawa, ON]

Oh, for sure.

[Jean-Denis Fréchette]

Of course, it could go to $1 million. It will not go to $1 million, but as I said, it's going to be over $100,000, which is a threshold that I cannot sign for, so I will need special authorization if we go there to sign a contract of that sort.

[Colin Carrie, Conservative, Oshawa, ON]

For that process alone, where would that have to go—to the Senate? You said we would have to make application for that. Do you know the length of time the process to okay it would take?

[Jean-Denis Fréchette]

I don't know. That's why when I was asked the question about six months.... Essentially, you have all these different factors that will have to be considered. When the Library of Parliament—and we are the PBO at the Library of Parliament—submits this request to the two Speakers, we are in their hands. It really depends on their decision. I don't even know what the outcome of that decision will be. They may decide just to refer it to the Liaison Committee. They may decide to just wait and make an analysis of it. I have no idea how long it can take.

[Colin Carrie, Conservative, Oshawa, ON]

I see that there's a lot of uncertainty out there, even with regard to the quality of the data. I've been trying to make the point that we don't even know what the problem is and what we would be addressing. You mentioned under the data section that there are key assumptions that you would have to make. Can you give us a quick little opinion, now that you've had a few weeks, on what you think of the quality of the data out there? Do you have an opinion on that or thoughts on that?

[Carleigh Malanik]

We've only started looking at mock data because we haven't actually purchased the data yet. There are several metrics available from both public and private sources. At this point I can't really comment on the quality, but from what I can tell, several years of analysis have been done on this data and data collection, and several metrics are available as well.

[Colin Carrie, Conservative, Oshawa, ON]

Okay, so we're still unsure even as to the quality of data that's out there.

I'm looking at the cost here. Even if we were able to get it in by your timeline of June 2017, which I don't think we could, because going through government processes usually takes a little bit longer than we all think, or even if we gave it, let's say, a year, do you think once we got that data, we could even come up with some type of program that the government could actually implement in this current mandate?

[Mostafa Askari]

If we can stick to the terms of reference that we have, we can provide a framework and a cost for that framework. Now, from a policy perspective, the federal government and the provinces have to decide how they're going to implement that because, as you know, the provinces have their own programs right now. How they're going to fit that within their own program will certainly require discussion and debate and negotiations. This will give an idea to those who are considering this kind of program what the overall cost is. Then from there you can go ahead and design a policy that would provide this kind of service. Once the policy is decided and designed, then we may have to go back and re-evaluate the cost and the different aspects of that.

[Colin Carrie, Conservative, Oshawa, ON]

You brought up a really good point about the provinces, because that's another timeline. If there's going to be any negotiation or discussion with provinces, that could take years.

I've been trying to get the government side to possibly narrow the criteria or get some input from the minister to see what types of ideas would be acceptable to her. It's almost like a chicken-and-egg type of thing, because, as you've said quite correctly, we could do all this work, and then the minister might say, “Well, we're not even sure if we want to go that route, so maybe we'll do this instead. Can you go back to that?”, and we could go back and forth forever.

If we were able to narrow criteria and maybe get some policy direction from the government ahead of time, instead of, as the old saying says, shoot and then aim, would that be helpful towards decreasing some of these timelines, and maybe the costs?