Health Committee on April 13th, 2016

[Dr. Brian O'Rourke]

They could be.

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

My next question is about generic pharmaceuticals, which have been touted as a cheaper but equally effective alternative to brand-name drugs. What are some of the challenges and benefits in drug innovation when considering a movement towards those generics?

[Dr. Brian O'Rourke]

On generic drugs, let's talk about two separate classes of drugs here, because I think it's important to talk about the biologics and the subsequent entry biologics as well.

The chemically synthesized drugs, where scientists and chemists get together and manufacture a drug, are very easy for the generic manufacturers to replicate. This goes to normal patent laws in any country. At the end of their patent life, the generics will take over. The company then moves on to other novel medicines they've developed. That's just normal business in the pharmaceutical world. There are now good systems in place here in Canada, again, for price negotiation on generics. The provinces and territories, in the public plans, have done some good co-operation to lower the prices of generics.

Subsequent entry biologics are another case. These are biologic products from plants, etc., and they're very difficult to manufacture. On the prices that we're starting to see with these subsequent entry biologics, we're not seeing significant decreases like we do with generic drugs. We're also seeing cases where we've done a number of reports to counter some of what the pharmaceutical industry might say, which is that their brand-name product is better than a generic product. We've looked at it and the Health Canada regulator looks at it, and they are equivalent. We've produced a lot of information for patients and for clinicians to demonstrate that clinical effectiveness and comparison.

The subsequent entry biologics are just new, with a number of them coming onto the market in Canada. There's a situation that I've just heard about where the manufacturer of the brand-name product is going into the hospitals and basically giving away their drug. They're charging at one cent for the injectable, so the patient starts on that subsequent entry biologic, and then patients are frightened about changing the subsequent entry biologic, again because of marketing information that it is not the same as the brand-name product. I think we have a long way to go in getting some sort of a clinical equivalency and understanding from the patients on those subsequent entry biologics.

[The Chair, Liberal, Bill Casey]

We're going down an interesting road here, it seems to me.

I just had a question before we go to the next round of five-minute questions.

Are you aware of non-transparent transactions or hidden rebates in Canada? Do they do that in Canada? I don't know whether you were talking about other countries. Do some companies have these? Actually, the one you just referred to is kind of a non-transparent discount. Are you aware if that's a common practice in Canada?

[Dr. Brian O'Rourke]

Most of the provinces have moved away from doing the rebates, but all of the price negotiations, the prices that are paid by the provinces through their negotiations of the pCPA, are non-transparent. Those are not publicly available prices.

[The Chair, Liberal, Bill Casey]

Okay, thanks very much.

Dr. Carrie, you have five minutes.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you to our witnesses here today.

I've been listening quite closely. I want to point out the wisdom of Dr. Hoffman when she said that this is a complicated thing. At the end of the day, this is about the Canadian health care system. We're looking at the patient. What is the appropriate treatment for that patient and what kind of outcome are we getting?

I think Brent was saying seniors were taking five or more drugs and that almost 40% were using inappropriate medication, and that concerns me because, when the government starts to take a look at national pharmacare, it is a lot of money, and there are a lot of patients who may be treated inappropriately. If we're looking at some simple number such as $10 billion, and 40% is inappropriate, that's $4 billion that the Canadian taxpayer may be picking up for treatment that is not effective and not appropriate for the client.

I am concerned about market distortion because we may end up favouring one modality or one drug over another. My background is that I'm a chiropractor. I didn't prescribe, but I certainly had a lot of patients who, for some reason, did better on one drug versus another. It might have been the Rx&D drug versus the generic. Sometimes it's not a one-size-fits-all for different patients. I'm concerned about distortion of the market and choice for patients and I was wondering if you have done any cost-benefit analysis about job losses if we go towards one system.

I know in Ontario years ago the NDP government wanted to do universal auto insurance through the government. They abandoned it because it would have cost a lot of jobs and would have taken away choices for clients. With this type of initiative going forward, would there be jobs lost, say, in the private sector if we moved towards one model, like Dr. Hoffman said, versus the other model? What about choices for patients for a medication that may be better suited for that individual patient?

Brent, do you have those numbers, or has anybody done it?

[Brent Diverty]

We haven't done that type of analysis ourselves. We have seen studies that would suggest that there would potentially be an economic impact, perhaps upwards of $4 billion a year, but those aren't studies that we've done ourselves.

One of the things that I would emphasize to the committee is that, if we have the correct data, we can model a lot of this ahead of time. We would certainly advocate, not just for an investment in data and analysis, but also in the willingness of the various partners to provide the data. I mentioned that our data is strong around public programs; therefore, it's strong for looking at seniors and low-income populations with much less rich data on privately funded drug programs and some of the costs associated with that.

The other thing we have opportunities to do is to bring data together or link data to look at the relationship between use of pharmaceuticals and visits to hospitals, etc. We can do more studies, such as the one I mentioned, with a stronger information base. A lot of these questions can be analyzed.

[Colin Carrie, Conservative, Oshawa, ON]

If the government's moving down this route, would you be able to advise the government? Maybe somebody should take a look at these data and see how they will affect the market. Brian mentioned the example of Germany where perhaps certain drugs would not be available if Canada's market is closed and we don't have a little bit of competition maintained in the market. At the end of the day, we're all thinking about the patients, and I am worried about market distortion here. Do you think that it would be a good idea for you to propose that to the minister?

[Brent Diverty]

What I think is, there are a lot of opportunities to model different policy options and also the implications of those going forward, and a strengthened information base will help with that.

[Colin Carrie, Conservative, Oshawa, ON]

I'm curious to note as well, and I think somebody mentioned, are we number two in the world in pharmaceutical utilization, or something along those lines? We're already taking a lot of drugs.

I'm also worried about appropriate prescribing. We had the minister in front of us a few days ago, and I was a little disappointed. She has reversed where we were going as far as tamper-resistant opioids, for example, and the diversion with that.

If we went into a national pharmacare program—and as I said, now we're going back to a non tamper-resistant type of OxyContin, I believe the generics are going out—what do you think would happen to the diversion of these drugs?

I believe Brian talked about you having done some studies about the appropriate prescribing and utilization of prescription pharmaceuticals and a number of projects looking at the evidence related to prescription drug abuse. I'm concerned that if physicians are able to do the easy prescription and it's going to be covered by the government, what is the likelihood of diversion, and what's the cost to the Canadian taxpayer if we have a cheap OxyContin, for example? Is it going to be diverted to the Canadian market? Is it going to the United States? Have you looked into that at all?

[Dr. Brian O'Rourke]

We haven't looked into that specifically. Our work was more focused on what are some effective systems to deal with the issue of over-prescribing of some of the drugs of abuse. We looked at initiatives that were under way in Australia, and throughout Europe, etc., and that helped inform some of the policies that Health Canada was looking at.

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

[Technical difficulty—Editor] department. I practised emergency medicine for 20 years.

Of course we write a lot of prescriptions, and as you've said in your presentation, approximately 10% of prescriptions aren't filled. There is data from emergency departments that suggest 60% of prescriptions written in emergency departments aren't filled. There is a lot of speculation. Much of it is that there are many people with much lower incomes who receive all of their care through emergency departments, and it's not a reach to say that it's the poorer patients, and therefore they can't afford these.

Has there been any data, or does anyone have any data, on a system where through emergency departments—say, if there are prescriptions written through the hospital base, or a not-for-profit pharmacy—there would be a saving at least for this population of patients? Has that ever been looked at?

[Abby Hoffman]

I'm not aware of specific studies on that, but I think as a general point—and this is not speaking specifically to the use of prescription drugs or prescribing practices in ERs—certain initiatives, such as the choosing wisely initiative, have demonstrated with the over-prescribing of just about every health care intervention, those prescriptions aren't filled. It would be useful to know how many of those prescriptions ought to be filled in terms of looking for optimal therapeutic benefit for the patient.

I want to go back to something we talked about before with this implication that somehow if the public sector took over private plans—which I don't think is really in anybody's sight lines, but even if it were—this would curtail patient choice. I think it would create a greater possibility of more consideration of efficient and appropriate drug use. There would be a fiscal incentive to make sure there were common formularies, that prescribing practices were positive, and so on.

I'm sorry, it wasn't a response to your question, but I wanted to make that comment.

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

That's great because that was the answer to one of my later questions about the possible impact of prescribing practice guidelines. You've saved me the trouble of asking another question, which is good.

Another thing I'm wondering is if there has been any data on any stratified drug plan that is related to income. For instance, we know that for people on social assistance, welfare, very often a lot of drugs are covered. Has any jurisdiction that you're aware of come up with some sort of coverage plan where, if you demonstrated you had an income below a certain level you'd be issued some sort of card or some sort of identification when you met the means test and that your prescriptions were covered? Those who could afford would pay, and those who couldn't afford it would have a portion or all of the expenses covered. Has that been looked at anywhere that you're aware of?

[Abby Hoffman]

It is a reality now, as you've mentioned, that individuals on social assistance do have coverage in most provinces and it's generally pretty good coverage. Certainly in the case where seniors are covered, which is also the case in the majority of provinces and territories, there is some degree of income testing, but for reasons you can all imagine it's not that easy from a political standpoint to introduce a really progressive kind of regime where the beneficiaries are actually paying some portion of the cost in accordance with their income. So even though the co-pays and deductibles may vary a little bit with income, probably in an ideal world those regimes could be a little bit stronger.

I mentioned catastrophic coverage. We have looked in the past at different approaches for those individuals who do not have good coverage on an ongoing basis and where their costs relative to either their own net or their own family income are relatively high, and we have looked at different models of providing catastrophic coverage based on the proportion of drug costs as a percentage of income, and the cost will vary widely. At that time, and this was now a number of years ago, catastrophic drug coverage to close all of the current gaps in Canada, depending on which model you choose, could have varied from a couple of hundred million dollars a year to many billions. It's entirely dependent on the model you choose and the degree of progressivity in the financing arrangement.

[The Chair, Liberal, Bill Casey]

Mr. Webber.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Mr. Chair, and thank you to the panel for also being here today and in particular, Dr. Hoffman, for being here a second time.

I want to direct my question towards you, Dr. Hoffman, because frankly I'm a big fan of yours. I watched your career in athletics for years. I watched you at the Pan American Games and at the Olympics. You were a household name in my household at least. I wanted to be able to tell my family that I got to ask you a question.

In your presentation, Dr. Hoffman, you had mentioned that the federal government has some unique responsibilities when it comes to public drug coverage. There are various federal departments that manage drugs for the so-called federal populations such as the first nations, the Inuit, members of the Canadian Armed Forces, veterans, RCMP, and a few others here. Just recently in the media there was a report that in particular among veterans the use of medicinal marijuana has increased significantly within the last year. It's actually quite shocking how it's increased. I'm just curious, first of all, to get your insight on that, and then the data on these other departments such as for federal inmates and such. I would like to know if the medicinal use of marijuana is increasing very significantly in these other areas as well.

Could you talk a bit out that, Dr. Hoffman?

[Abby Hoffman]

As a matter of fact I don't actually have data specifically on the use of medical marijuana in the various federal programs, or among the so-called federal populations. I think it would be information held by the responsible departments. If you wish we could commit to getting that information and providing it to you. I don't have it on hand here.

[Len Webber, Conservative, Calgary Confederation, AB]

If we could get that it would be wonderful.

[The Chair, Liberal, Bill Casey]

Thanks very much.

Ms. Sidhu.

[Sonia Sidhu, Liberal, Brampton South, ON]

Thank you, Mr. Chair, and thank you to all of the panel for being here today. I'm sharing my time with the parliamentary secretary, Kamal Khera. My concern is that many Canadians struggle to pay for the medicine that is needed to ensure a better quality of life. Who are some of the groups that are most disadvantaged by how we currently supply drugs? What is the approximate cost to the Canadian health care system due to patients being unable to afford the drugs they need?

[Abby Hoffman]

Maybe I can start answering that one.

On the second part, the cost as a consequence of people not filling prescriptions, there is not to my knowledge any good data that explains what those costs are. We do know that individuals who forgo medications, particularly for chronic diseases, and others, but particularly chronic diseases, do run the risk that their condition will deteriorate and that they will make demands as a consequence on other aspects of the health care system, be it emergency room services, surgeries, and so on.

In terms of those who face the most difficulty in terms of access to drugs because of our current coverage regimes, social assistance recipients are eligible in most provinces for coverage. It's those individuals with relatively low incomes—I won't call them the working poor—who have inconsistent affiliation with a workplace. They may work multiple part-time jobs. They may be working part-time. But the nature of their employment is such that they do not have an employer-based supplementary benefits program.

Those individuals are among the ones who face the greatest difficulties. They may also have their situation compounded by being single parents or circumstances of that nature. It's generally people of working age, because seniors are generally covered, with enough income to have passed the income thresholds for eligibility, so they're not eligible for fully subsidized coverage and they don't have any access through their employment. That's the sort of broad category of people who lack appropriate coverage.

[Sonia Sidhu, Liberal, Brampton South, ON]

As we are heading to an increased proportion of the population being over age 65, do you think changes need to be made to better serve the aging population in Canada? What changes would need to be made?

[Abby Hoffman]

Again, across most of the country, seniors have coverage through public drug plans. As for seniors who have been in the workforce for a long time, this is not the entire seniors population, obviously, but a significant portion may still have access to the health benefits program in their place of employment even after they retire. This pertains particularly in the case of public sector workers, but not only public sector workers.

The issues for seniors are twofold. One is steps to ensure that there is appropriate use because this kind of over-prescribing has been described in some detail in front of the committee today. The other issue is, if there's a wish to move forward on universal coverage, what should the payment model be?

Right now, what seniors might pay is subject to a certain amount of income testing, but often the caps, the deductibles, the quarterly eligibility characteristics, and so on, don't necessarily take good account of relative income. As I mentioned, it's very difficult politically to imagine introducing higher co-pays, premiums, or something of that nature.

The reality is that we have some relatively well-off individuals over age 65 who are getting very good access to coverage for their drug costs, whereas that 30-year-old, I mentioned a few minutes ago, the single parent with a couple of children, making a very modest income, and with somewhat erratic employment in terms of regularity and access to employer-based benefits, may be getting no coverage at all.

One has to weigh up at the end of the day, is that really a reasonable way to approach an efficient coverage model in Canada?