Health Committee on April 18th, 2016

[Dr. Steven Morgan]

We know from repeated studies, literally dozens of studies conducted in Canada, the United States, and elsewhere in the world, that even relatively small costs borne by patients can be a barrier to filling prescriptions. It's important that we understand that patients don't act the way that we as managers of a health care system might wish them to act.

If you put a $10 charge on a prescription drug for a patient, many will look at that drug and think that it's a preventative thing, that it's for their cholesterol, or for their hypertension, or for managing their blood sugars because they're a type 2 diabetic. They'll say, “I don't think I will fill that prescription. I'll just get by without it, because I don't feel there's a benefit.”

That personal choice by the individual, which is quite rational to an individual, ends up costing our health care system money in the long run. It's those very drugs, those preventative drugs, that patients stop taking and then end up in the hospital, where it costs us far more money than we will have saved in the long run by asking them to pay the copayment.

I've often argued that we need to have some form of first-dollar coverage for prescription drugs. I tend not to necessarily call it first dollar, because in the Canadian context, this idea of giving away medicines with no copayments whatsoever is currently politically untenable. It is not something that I think any province or the federal government will accept. Canadians fill so many prescriptions that even a $2 to $5 prescription charge to patients will raise billions of dollars of costs to the program.

As a consequence, I refer to coverage in an ideal pharmacare model as being first-prescription coverage. There should be no deductibles, because deductibles are the worst barrier to filling prescriptions that patients need. From the very first prescription, depending on the drug type, it might be a very low copayment, maybe free if it's a preventative treatment that we know patients should have, or it might be a modest to a high copayment if it's something that we know is more of a private benefit, such as a painkiller that patients could have substituted an over-the-counter drug for. One could imagine a pharmacare system with something of a blended copayment that actually took the copayments based on evidence, not just a flat copayment across all prescriptions.

[The Chair, Liberal, Bill Casey]

The time is up.

Mr. Ayoub, I understand you're going to split your time.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Yes, maybe.

[The Chair, Liberal, Bill Casey]

Okay. Maybe, because time flies.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

It depends on the answer to the question.

[The Chair, Liberal, Bill Casey]

All right.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Maybe I'll share with Rob.

Dr. Gagnon, your testimony was fascinating, especially since I already find the topic very interesting. I have a number of questions I'd like to ask you. My first one is this.

I understand that, given costs and time, there should be a hierarchy of treatment. What are your solutions? You seem to be criticizing the fact that individuals who are insured can obtain any drug at any price. You spoke about this as the choice of doctors. What do you think this hierarchy should be? If I've understood correctly, this is the kind of solution that should be chosen. What is the link between treatment, price and time?

[Dr. Marc-André Gagnon]

I can give you a partial answer at least.

It's estimated that about 80% of new drugs that arrive on the market have no therapeutic benefit over existing drugs. Yet if our system agrees to cover everything at any price, companies would end up engaging in major promotional campaigns to convince doctors to always prescribe the newest, more expensive, patent-protected drug. So we end up with marketing-based medicine, not evidence-based medicine.

Ultimately, it's the newest drug on the market that is prescribed, and it's more expensive but there are often generic drugs that are much less expensive with side effects that have become well known over time. We haven't developed this culture.

With regard to the hierarchy, there are what we call reference prices. Take the case of proton pump inhibitors for gastric reflux: there are 13 different ones on the market. For one of them, each pill costs $2.50, while all the others cost 40¢ or less. Under this system, the ceiling is set at 40¢ or less per pill, and the one that costs $2.50 can only be prescribed to individuals who can show that they need it for specific therapeutic reasons.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

We know that generic drugs are available. You said that there should be a regulation for doctors or, better yet, they should be trained so that their first consideration is the hierarchy of treatment. If a patient ever disagrees with it or wants to try another drug—obviously the doctor has to agree because the doctor prescribes it—does the patient have the choice?

[Dr. Marc-André Gagnon]

There are two ways of proceeding. If there is a medical reason to use a more expensive drug, there is currently an override system so that it can be refunded.

Suppose there is a generic version of the drug, but the patient wants to continue using the brand-name drug because of the colour, taste or something like that. If it isn't demonstrated that, medically, the brand-name drug provides additional therapeutic benefits, the person should still be able to get it, but that person, not taxpayers, should assume the difference in cost.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

We talked about the situation in Quebec and in other countries, such as New Zealand. In the course of your studies and research, have you been able to establish costs based on the options open to Canada? What might the costs be if depending on the model we choose?

Your opinion is that the decision should not be political. What are your comments on that?

[Dr. Marc-André Gagnon]

Do you want to start?

[Dr. Steven Morgan]

Yes, if I may.

I have a couple of things to highlight in terms of the probability or possibility of moving forward. We can learn a bit from countries that have reorganized the way they cover medicines in their countries in recent years.

New Zealand created this purchasing agency referred to as PHARMAC in 1993. It didn't exist for decades prior to that.

There's no other country in the world that doesn't have universal drug coverage as part of their health insurance in the postwar era. All countries that developed their systems developed drugs and health care together. Canada is the only outlier in that regard.

We can look to New Zealand's purchasing agency. We can look to the United States Department of Veterans Affairs' health administration. They reorganized how they purchase their medicines also about two decades ago. We can look to Sweden which more recently reorganized how they purchase their medicines.

To give you an idea of how important it is to defray the political tension that comes from having manufacturers demanding prices for medicines that may not be justified, there are a growing number of countries around the world that are coming together and buying their medicines together across national boarders. We can't even do this in Canada across provinces, and yet the Scandinavian countries have developed a purchasing consortium that will be rolling out this coming year and will buy medicines on behalf of multiple Nordic countries.

A number of Russian-speaking nations are now creating a single market for pharmaceuticals, including single regulatory processes and single coverage decision-making processes.

Even the Dutch and the Belgians are joining together in purchasing medicines, that is, in making these difficult decisions as two countries coming together and binding themselves to the same formulary. It's precisely because they do not want the political tension, the political pressure, to fund the drug just because their neighbour does. They want to fund drugs based on value for money, not peer pressure.

[The Chair, Liberal, Bill Casey]

Mr. Oliphant, you have time for a quick question.

[Rob Oliphant, Liberal, Don Valley West, ON]

If I could then ask quickly, have you had a chance to formally respond to the CPA's, the Canadian Pharmacists Association's response that they did in the CMAJ?

If you haven't had a chance to respond to it and would like to, particularly on underestimating costs, and concern about slow drug approvals and lowering patient choice.... If we don't have time, you may want to send something in writing to respond to them. They always like responses.

[Dr. Steven Morgan]

Thanks.

I actually chose not to respond to their work, in part because it wasn't peer reviewed. It's not credible research.

[Rob Oliphant, Liberal, Don Valley West, ON]

It's an opinion piece, really.

[Dr. Steven Morgan]

Our paper is a peer-reviewed research paper in the Canadian Medical Association Journal. It's been out for over a year now, so other academics have had plenty of time to try to replicate, critique, or tear it apart in a formal and disciplined way, and no one has. That paper has recently won a national prize for its scholarship and its importance in helping policy in the country. I am positive that the paper is robust.

The critique that the Canadian Pharmacists Association commissioned from a pharmaceutical industry consulting firm makes a number of false assumptions about the paper. It included the assumption that we were solely basing our costing estimates on Canada versus U.K. prices, which is not the case. We looked at a wide window of prices, and recent Patented Medicine Prices Review Board data show that approximately 26 OECD countries fall within the range we used in our analysis.

They argued that we didn't take advantage of, or account for, the $490 million in negotiated rebates that our provinces get through negotiated contracts with drug manufacturers. We discussed in the paper that we deliberately did not do that because the rebates in Canada are smaller and apply to a smaller proportion of our market than comparable countries like the United Kingdom, New Zealand, Sweden, or Australia. If we were to have done what they suggested we should do, we would have added $1.5 billion in savings that we left out of our study.

[Rob Oliphant, Liberal, Don Valley West, ON]

If you have a sleepless night, and I don't think you are, you can always....

[Dr. Danielle Martin]

I would like to add something to that.

A thoughtful question was asked about the political role here. I would implore this committee to consider that what you're doing right now is a tremendously important politically. You are thinking not only about what the end state should look like, but also about the hurdles involved in the transition .

One thing that those of you who work every day in both capital “P” and small “p” politics will understand is how to smell the interests in this conversation. We should not be afraid to have a conversation in Canada about where those interests reside and why some groups will be coming before your committee to present you with things that are not science but are dressed up as science in an attempt to serve their own interests.

I know many pharmacists understand the evidence, and I know many pharmacists go to work every day to try to defend health for Canadian patients. As a regulated health professional, however, I can tell you that had my association put forward a critique that flew so blatantly in the face of scientific inquiry, they would have heard from me as a member. I suspect that if you were to ask the Canadian Pharmacists Association whether they have heard from their members on this paper, you might hear some interesting answers.

I think it is important for us all to be grownups about this. We have to understand that there's a lot of money in the drug industry in Canada and that there are always going to be winners and losers in every transition.

We need to look to you as political leaders to show leadership in the politics of the transition. No one is better placed to do that than our elected political officials. That is something that is difficult for those of us who are at the front line of the health care system and in academia to do, but that's where you can really excel.

[The Chair, Liberal, Bill Casey]

Thank you.

Ms. Harder.

[Rachael Thomas, Conservative, Lethbridge, AB]

Mr. Morgan, in your presentation you referred to an Angus Reid study, which says that 91% of Canadians support the concept of a national pharmacare program in Canada.

Now, the second part of that, which was left out of your presentation, was the fact that the next question asked of people was whether they would be in support of the GST increasing from 5% to 6% in order to pay for a program like this. Seventy per cent said that they were absolutely against this increase in taxation.

If this is not done by an increase in taxation, where would you suggest that we would find the money for such a program?

[Dr. Steven Morgan]

Actually, the Angus Reid survey asked a number of questions about support for the system and then asked people what their support would be with different instruments, not just the GST.

Canadians want a universal public program.

I will be clear: I helped Angus Reid design that survey and was responsible for some of the analysis. They asked a number of questions about fundraising instruments or tax increases that would have been between $5 billion and $10 billion in additional revenues raised to support a program, which is much more than you need to run the program. GST increases were the least popular, if I remember the responses.

Canadians generally preferred the idea of having corporate taxes returned to the rates that they were in 2012 as a mechanism for raising sufficient revenue to run a pharmacare program. I suppose in the minds of the Canadians who responded to that survey, the employers are going to benefit from reduced costs of employment-related health insurance, so maybe they could make that cost up by contributing more through corporate taxes.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you.

I think the point remains that it's one thing for Canadians to be in support of something. I think we can all be in support of free pharmaceuticals—it sounds great—but at the end of the day, it's not free. It does have to come from the pockets of the taxpayer. If the broad band of the Canadian public isn't in support of that, I don't know how we can move forward with a program like this.

That's a statement, not a question. I do have another statement to make.

Mr. Morgan, when we asked what role politicians have to play in this, you mentioned the veterans program. It concerns me that you would bring this up as a model to follow, because there are a couple of things that have happened with the veterans program. One is that there's an extremely long waiting list, to the point at which there are actually people who are passing away before they can access the pharmaceuticals they need. If that's a model we're going to replicate here in Canada, that seems problematic to me. The other reason this is concerning to me is that there are managers who, it has been proved, actually falsify information in order to cover themselves very well and prevent themselves from being fired. That's another reason that I feel that this, perhaps, is not the program we need to be modelling after.

That said, my question is for Ms. Martin or, I suppose, Mr. Morgan. When we're saying politicians need to get out of the way, where are we suggesting the accountability for such a program would come from?

[Dr. Steven Morgan]

I'll respond to the developments there.

First of all, if you've got a citation for the patients in the veterans administration dying on wait-lists for particular medications, I'd appreciate seeing that. It would be nice to look at it.

On the issue with respect to accountability, we do want publicly accountable bodies that are making coverage decisions. They need to be accountable through fair and transparent processes. I think Canada actually is an exemplar on the world stage. I give a lot of credit to the Canadian Agency for Drugs and Technologies in Health and to the federal-provincial collaboration on the common drug review. It is a reasonably robust and reasonably transparent process that they have under way right now. A similar process, with some new elements to its mandate, could be conducted. Again, it's conducted by an agency that's at arm's length from political influence.

This would not be unique to Canada. Other countries around the world have similar infrastructure in place. Countries like Germany, Sweden, the Netherlands, Australia, New Zealand, the United Kingdom, all have agencies that are at some level arm's length from politicians. It's specifically to protect you from being lobbied by the manufacturers of a particular medicine that want their medicine on the formulary at a cost that isn't justified vis-à-vis other ways of improving the health of the population.