Evidence of meeting #43 for Health in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was provinces.
A recording is available from Parliament.
Prof. Amir Attaran
That's true, but when you do lower it from $300 to $200, you decrease the pain on either the federal government or the provincial government, or both, to bring her into a formal coverage scheme, because it's less expensive to do so.
I'm not disagreeing with you. I'm just trying to invite you to think about the critical path to the goal we both want. That path is to bring the prices down first so that the expansion of coverage is less costly and therefore encounters less political friction.
Liberal
John Oliver Liberal Oakville, ON
As we move forward with whatever the order is, we currently have a large insurance industry that is underwriting a lot of the pharmaceutical costs that are not federally or provincially covered. I am thinking back again to 1963 or 1964, when we introduced the Medical Care Act and we had all kinds of hospital insurance programs that all got set down to a single-payer model. Are there any barriers that they could raise to the federal government introducing the concept of a single-payer model, which is what the Canada Health Act really does? If you think about the other principles...it's publicly administered.
Prof. Amir Attaran
This again goes back to my point about asking what the critical path is. Of course we can imagine scenarios in which the insurance industry would not be terribly delighted with your plans, but if the project begins by making the drugs less expensive, you're helping the industry, so you're much more likely to get their buy-in. When they see that the very first thing that Parliament is targeting is to lower what they must pay out for drugs, you've begun the relationship on the best possible basis to win their co-operation for later steps.
Liberal
John Oliver Liberal Oakville, ON
I think that encompassing pharmaceutical drugs under public administration, which is a single-payer model, gives teeth to the negotiators of the provinces and territories that they don't currently have for this particular broad swath of uninsured people.
It's very difficult to have that negotiation happen across multiple, different insurance schemes. The single-payer model in the Canada Health Act would give them the authority to make those changes.
Liberal
John Oliver Liberal Oakville, ON
No. I thought I was out of time. I was just making a final comment.
Liberal
Liberal
The Chair Liberal Bill Casey
All his comments are sensible.
Moving to our five-minute round, we'll start with Mr. Webber.
Conservative
Len Webber Conservative Calgary Confederation, AB
Thank you for being here today, Professor Ryder and Professor Attaran.
Professor Attaran, near the end of your presentation you made some comments that you didn't have time to elaborate on. First of all, you mentioned that the Canadian drug manufacturers are manufacturing drugs, but we're paying more here in Canada than in other areas around the world. You said we pay too much for generic drugs.
You mentioned the Competition Bureau and how we should perhaps have them investigate. Can you elaborate on what you were saying in your presentation?
Prof. Amir Attaran
As I mentioned earlier, when you have a single drug product on provincial formularies supplied by two, three, four, five, or some number of different companies, the agreed price is the same for all those companies on the formulary. Hypothetically it might be 50¢ for all four suppliers. That does suggest the four suppliers are not fighting it out for price.
Why is that? The reasons are murky at best. Part of the failure of the provinces to deal with the drug price problem is that they're secretive. How these prices are arrived at is not known. The agreements that pCPA has negotiated for product listings are entirely a black box. Anecdotally, what I've heard is that the prices in the formulary are fictions. The way the manufacturers compete against one another is in the rebates they give to various partners in the supply chain. “Rebate” is a polite term for kickback.
In Ontario, these rebates have been legislatively prohibited for some years now, but the drug manufacturers are very clever at finding end runs around that law. What really is happening in the industry, I'm led to believe, is that the nominal prices listed in formularies, such as the 50¢ I used in the example before, are really fictions. Suppliers one through four will fight it out with each other by how much they can slip to other partners in the supply chain to get their product instead of someone else's onto the pharmacists' shelves.
None of that smells to me as clean business. No professor is going to succeed in getting to the bottom of it. I've tried. Most of the information I'm using to relate the story to you is highly anecdotal. You would need the Competition Bureau, which has the power of summonsing documents and compelling witnesses, and likewise the Competition Tribunal, to better understand how this price-fixing system is working, but have no doubt that there is a price-fixing system.
Conservative
Len Webber Conservative Calgary Confederation, AB
That's very interesting. Maybe that's a project we can move into.
Mr. Chair, I'll make a motion....
No, if it's okay, Mr. Chair, I'm actually going to pass the rest of my time on to my colleague here.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Mr. Ryder, I have a question for you, and I'll take it from the securities decision rendered by the Supreme Court of Canada. I'm going to read the paragraph right before the one in which it rules in the negative. It says:
It is a fundamental principle of federalism that both federal and provincial powers must be respected, and one power may not be used in a manner that effectively eviscerates another.
I assume this is judge-speak for you can't do this, ever. I would assume they don't use a term such as “eviscerate” very often.
It then goes on to say:
Rather, federalism demands that a balance be struck, a balance that allows both the federal Parliament and the provincial legislatures to act effectively in their respective spheres. Accepting [the Government of] Canada's interpretation of the general trade and commerce power would disrupt rather than maintain that balance. Parliament cannot regulate the whole of the securities system simply because aspects of it have a national dimension.
How would that differ if a case were to go before the Supreme Court using POGG—peace, order, and good government—and how would they not use this principle that you cannot eviscerate the powers laid out to the provinces in the Constitution by using another section? The federal government can't shop around the Constitution for a section that it prefers over another in order to legislate a public policy goal. Could I get you to comment on that?
Prof. Bruce Ryder
I appreciate the question. The passage you've read is an important one, and it expresses themes that we can find in many different cases involving the interpretation of the division of legislative powers. The Supreme Court of Canada is very concerned about a balanced approach and prefers co-operative solutions, and the securities act reference is a prime example of that.
However, each head of power has its own distinct characteristics and the interpretation of its scope and limits is different, so the national concern branch of POGG is a little bit different from the general regulation of trade branch of the trade and commerce power. It's helpful in thinking about whether this a subject matter that could be upheld under the national concern branch of POGG. It's helpful to keep in mind those concerns for sure, but also to keep in mind what subject matters have been allocated in the past to the POGG national concern branch, what the features are that they share, and whether we could we say that elements of pharmacare share those features.
What are those subject matters? In the modern era, it's aeronautics, and not just international or interprovincial airline traffic, but all, including all the local aspects.
It's nuclear power.
It's the national capital region. The zoning of the national capital region would normally be provincial or municipal, but as you know, it is conducted to a large extent by the federal Parliament.
It's marine pollution in the Crown Zellerbach case.
What the court said, or has said, and what scholars have said about this handful of examples—because that's really all we have from the modern era—is that they're each specific and focused in their definition so that they don't upset the balance in the division of powers to a great deal if we allocate them to exclusive federal jurisdiction, because that's the effect of the POGG national concern branch. It's as if you had a new head of federal power. It's as though marine pollution is now written into section 91, as well as aeronautics and the other examples I mentioned. They're very specific in focus. The words the court uses are not too diffuse; they're not so lacking in definition that they have no bounds that we can identify.
The other argument that has been made in the scholarship and in the case law is that the provinces lack the ability to deal with the matter effectively. If we were to leave some aspects of the regulation of air traffic, for example, to local governments, there would be serious risks for the safety of travel by air, and there's a strong case for national, and indeed international, regulation.
February 23rd, 2017 / 12:10 p.m.
Liberal
Doug Eyolfson Liberal Charleswood—St. James—Assiniboia—Headingley, MB
Thank you all very much for coming.
I found this very interesting. This is outside my training. I'm a physician, although I was raised by a lawyer. In retrospect, he's right. After listening to this, I know I would have enjoyed law.
I've been looking at this from a physician's standpoint. I see things like the first-hand adverse effects on the patients who can't afford their medications and the data as to the potential cost to the health care system. This has been very near and dear to my heart, this whole study.
We've been going through these different points, which are fascinating, about the different routes we can take. You had the question, what would this look like? You would have liked having that question beforehand.
We'd like to have something to give you. I'd like to propose a scenario to review, to see if you see any bumps in the road with this arrangement.
If you started with a group of medical experts and you had an evidence-based formulary and they said, “These are the drugs that are essential, and they will be covered. We will only cover the generic versions of them. We won't cover anything more expensive than what has been proven safe.” Now we'd have this evidence-based formulary. That's step one.
Step two, have the federal government negociate one bulk buy of all these items on the list for the provinces. Step three, apportion these drugs to the provinces. You will give these to people who need them, free of charge. We've paid for them. They're covered. Then, if the province wanted to offer additional coverage of any other drugs, you wouldn't be stepping on their toes on that. Can you think of anything under Canadian law, the Constitution, or anything that would prevent that or cause any legal challenge?
Prof. Amir Attaran
What a beautiful way of breaking it down. The short answer to your question is that all of the above points you mentioned are doable. The devil is in how you do it.
On the very first one of a national formulary, we do actually have that. We must remember that the common drug review and the pan-Canadian oncology drug review do exist. It's a co-operative federal and provincial project that decides which drugs, using the conventional tools of health technology assessment, are clinically effective and considered good value. Where that is not delivering its promises, even when CDR or pCODR, to use their acronyms, make a positive recommendation for a drug to be paid for by the provinces, is when the provinces say they won't, as they frequently do. There's an enormous gap between the evidence-based choice of drugs for a formulary and which ones actually get paid for.
As to your second point about the federal government doing a bulk buy, I would slightly modify it. I'd say that what you want is a contractual agreement between the federal government and the provincial governments to do the bulk buy through a shared entity. I don't think the federal government can do that without provincial support; otherwise, it would possibly be purchasing drugs in excess of what the provinces need, or too few. You'd want some coordination there.
If you did that—the second point contractually, and the first point by building on the CDR and pCODR that already exist—you're only left with a question of how you expand coverage. My point earlier to Mr. Oliver was that if you bring the prices down first, you will find it much more politically acceptable, at all levels of government, to increase coverage. No one wants to increase coverage with expensive drugs. People would be much happier to increase coverage with cheaper drugs.
Liberal
Doug Eyolfson Liberal Charleswood—St. James—Assiniboia—Headingley, MB
Thank you.
I was expecting a longer answer, but that's such a great answer. I was expecting a longer answer because I thought there had to be some holes in my reasoning, but there didn't seem to be that many.
Liberal
Doug Eyolfson Liberal Charleswood—St. James—Assiniboia—Headingley, MB
Well, thank you.
Getting on another topic, this is off to the side. From the point of constitutional law, I guess it's section 7 of the Canadian Charter of Rights and Freedoms that says, “Everyone has the right to life, liberty and security of the person....” When between 10% and 20% of Canadians can't afford their medication and face possible adverse health outcomes because of that, is there a possibility that someone could make a case under the Charter of Rights and Freedoms that they're being denied those rights by the absence of a program to help them?
Prof. Bruce Ryder
Thank you, Dr. Eyolfson. That's also a good question. There are, of course, charter implications to this topic. They rise not just under section 7 but also potentially under section 15 of the charter, which prohibits discrimination.
Let me say a quick word about each. I don't think there's a strong chance of a challenge succeeding pursuant to section 7. The main reason is that the courts have defined it as exclusively a negative right and not a positive right. This means that it prevents governments from putting barriers in the way of access to medicines that are necessary to people's physical and psychological health, which is how the court defines security of the person. However, it doesn't require governments to provide access to necessary health services or medicines. That's a negative right, not a positive right. Therefore, the argument that there are existing economic barriers and other barriers that prevent people from accessing the medicine they need will only work as a section 7 argument if the claimant can point to government action that has created that barrier. This, I think, is the stumbling block.
Where section 15 can potentially come into it is that once governments have undertaken to provide benefits, they have to do so in a non-discriminatory manner as a result of the protection of equality rights in section 15. This includes in a manner that avoids discrimination on the basis of mental or physical disability. That's more likely to be the context in which a charter challenge could arise. That's because it's a mix of a negative and a positive right, in the sense that once government has undertaken or initiated a program, it has to follow through in a non-discriminatory fashion. That's the positive aspect of it, if you like. Government can be compelled by the courts to go further and provide further benefits or further access than it has.
That's a possible argument, but it's always hovering over the provision of any benefit.