Health Committee on Oct. 19th, 2017

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

Okay, you were referring to that fact, but again, the $20 billion doesn't actually come to the overall net savings of what is in the parliamentary budget officer's report. It is reporting an estimated $4 billion a year, which we believe, with a lot of intangibles. The fact that it is very conservative could mean an even greater net savings.

[Stephen Frank]

The PBO estimated it at $4.2 billion. I think you can change that assumption and assume 28% or 30%. If they put sensitivities in there, you'll get different numbers.

What I don't think anyone would disagree with is that it's billions of dollars that we could be using better if we got our act together and started to do a better job of bringing down the price of those drugs. We can do that collaboratively and we can start doing that really quickly.

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

All right. Thank you.

Dr. Morgan, you talked about the basket of essential medications that we could take at least as a starting point.

Is there anywhere a database that would be a starting point to establish 100 or so drugs that are essential? Does that basket that we could use as a starting point exist anywhere?

[Prof. Steven Morgan]

Roughly speaking, yes, in the sense that the World Health Organization manages what it calls the model essential medicines list for the world. That's the list it believes constitutes the drugs that every human being on earth has a fundamental right to access. That's the starting point.

Clinicians in Toronto, led by Dr. Nav Persaud and his colleagues at St. Michael's Hospital, have Canadianized that list by getting rid of drugs that just aren't needed by wealthy countries like Canada. They've added drugs to that list that we are lucky enough to be able to afford. It still comes up to just about 120 or 130 medicines on the list. It's a reasonable definition of essential medicines for the routine needs of Canadians. It includes things for HIV, rheumatoid arthritis, and some more serious conditions, but most of the medicines in there are the kinds of things that most Canadians might use: drugs to manage cardiovascular care, etc.

Those lists do exist, and Canada could fairly readily try to adapt one of those to whatever budget need we would have, or the budget level we would have if we were to move forward on a program to cover all Canadians.

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

If we use that as our formulary as opposed to Quebec's and we took that pile of medicines in your essential basket and the pile of medicines that are in the Quebec formulary, do you get a ballpark number for the price differential? How much more expensive it would be? We do know the Quebec formulary would be more expensive.

[Prof. Steven Morgan]

Based on the paper published earlier this year—and I would have to look at the precise figures—we estimated the incremental cost to government to develop a national plan to essentially provide all of these drugs was about $1 billion more than we're currently paying through public drug plans at present.

The total amount that was spent on Dr. Persaud's essential medicines list was, I believe, in the neighbourhood of about $6 billion or $7 billion in total, but most of that was already currently paid for by public plans or offset by other savings we can get through the plan.

We found in that analysis that the private sector would save about $4 billion in exchange for this $1 billion in increased public spending, for a net savings to the economy of about $3 billion. It's real money.

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

Sure. That is real money. Yes, I agree.

I'm going to throw this open to anyone who might have an idea about trends.

Dr. Raza, you work on the clinical side. You see patients who can and can't afford drugs.

Are you aware of any trends that are similar to what we're seeing in the States? We're seeing this even more with overall medical coverage when all of the insurance is either out of pocket or through employers. There are more and more media reports of employers who are either hiring people as part-time employees so that they don't have to pay them health benefits or are just simply hiring them as independent contractors. They are not employees; they're just hiring them as contractors so they don't have to pay them benefits. It appears to be happening more and more.

Is there any of that trend in Canada?

I'm going to ask Dr. Raza first, and then Mr. Frank.

[Dr. Danyaal Raza]

Yes, absolutely. There's this national conversation now about the rise of contract work, the gig economy, and precarious work. I see that play out with the patients in my practice.

There are patients who might have lost their jobs when they had a regular job with benefits, but they were converted to contract work. They don't know when that contract's going to end. Of course, it doesn't come with a prescription drug plan.

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

Sure.

[Dr. Danyaal Raza]

This is something we're seeing in offices across the country. Absolutely.

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

Mr. Frank, would you comment?

[Stephen Frank]

We collect data on this, obviously, as it is our business. In fact, the proportion of Canadians who have coverage is higher than it has ever been. The trend is up, not down. If you look at the data on our web page, you can see that.

We don't see any evidence that employer plans are being dropped or that the penetration of insurance in the workforce is in decline. It's just not.

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

Dr. Morgan and Dr. Gagnon, maybe you can you finish up.

[Prof. Steven Morgan]

I'm aware of a couple of surveys of employers that say they are very interested in a national public drug plan of some kind because they are finding themselves under great pressure.

I think you heard testimony from representatives of the employers in Canada who basically argue that the cost of medicines is out of control in the private sector and they don't have the capacity to manage it, nor do they have the moral authority to decide who gets coverage and who doesn't, based on the nature of the disease and which drug comes to market.

I think we're under a lot of pressure. We certainly see a lot of retirement groups starting to have conversations about whether the drug benefit will continue. That's probably why we see, for instance, the Canadian Labour Congress now fully committing to campaigning for a public pharmacare program. It's because their members are feeling the pressure.

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

Thank you.

[Dr. Marc-André Gagnon]

I would like to add that one of the trends we're seeing right now in terms of what I saw in conferences by human resources management and collective insurance group managers is a lot of what we call coordination between private plans and public plans.

A lot of provinces are offering catastrophe coverage, and it becomes an opportunity for different employers. When you have one employee with a rare disease, for example, that costs a lot of money, basically what you do is dump them on the public plan that has catastrophe coverage.

In fact, the public plans believe it's their job basically to cover these bad risks, but we end up with a system whereby we organize public drug coverage in Canada in terms of serving the commercial needs of private regimes instead of just providing good access for all Canadians.

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

Right. Thank you very much.

[The Chair, Liberal, Bill Casey]

Time's up. That completes our seven-minute round. We'll go to our five-minute round, starting with Mr. Webber.

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you, Mr. Chair. I would also like to thank our analysts for providing us with some quality questions for our round table today. I'm going to use some of your help and throw this question out to our round table.

Dr. Thomas Perry is the chair of the Education Working Group at UBC. He explained to our committee that the pharmaceutical industry has significant influence on prescribing practices through advertising, support for educational initiatives, and paying physicians to provide guidance on medications. Similarly, the independent Patient Voices Network of Canada raised the issue that patient organizations often receive funding from the pharmaceutical industry, placing them in a conflict of interest when advocating access to prescription drugs.

For anyone who wants to take this on, in your view, what steps could be taken to limit the influence of pharmaceutical companies on prescribing practices in patient organizations?

[Dr. Marc-André Gagnon]

The first thing you need is an evidence-based formulary. Prescribing habits must be based on evidence-based medicine, not on the promotional campaigns of drug companies. This is very important.

In terms of these conflicts of interest, for example, we're talking a lot about the opioid crisis right now. Keep in mind that you have this huge promotional campaign by a drug company that was basically providing claims that were bullshit. They had to pay $20 million because they were false claims. As soon as oxycontin was out, the attitude of private coverage was that we don't do any clinical assessments. It's approved by Health Canada, so we're covering it as fast as possible. Fantastic.

When we discover there is a problem, what can we do about it? Right now we don't even have the databases to understand what is being prescribed, where, by whom, or for which condition, and these are essential tools if we want to maintain a system based on evidence-based medicine instead of the promotional campaigns of the drug companies.

For me, universal pharmacare is also a way to develop institutional tools in terms of monitoring what is going on instead of saying that the drug is new, so let's go as fast as possible and we need to reimburse. No. We need to understand what this drug is doing. Is it a good product or not? How much do we pay for it? If there's no cap, if there are no standards to define this, then you end up with an open floor.

Keep in mind Steve's example of two guys going to the car dealer. What happens if every day exactly the same guys go to the car dealer? Will the car dealer provide a much better car at a lower price in the long run, or basically a scrappy car with a very high price? This is exactly what we have right now. Some drug companies focus on private plans. I include Valeant, because it is clear in their annual report every year that they focus on private plans, because there is no health technology assessment, so basically there is no cost pressure. They focus on them because they know that they will not be bothered with price sensitivity.

This is exactly the type of market we're developing with drug companies right now, and that's a huge problem. If you want a system that works well, if you want drug companies to do research on new products that do provide real benefits to the population, you need an evidence-based formulary for everyone.

[Prof. Steven Morgan]

Very briefly, I just want to add that both in the “Pharmacare 2020” report and in another report by our national research network called “A Better Prescription”, just published last year, we articulate how the appropriate use of medicines is one of the key pillars of a national pharmacare system. Appropriateness, affordability, and accessibility are things that are really key. I think you can embed a national strategy on appropriate use and safety into a rational pharmacare program, and as Dr. Gagnon said, that starts with making sure that what you cover is truly evidence-based.

[Dr. Danyaal Raza]

I was also going to bring up the point that pharmacare can actually promote medication safety. That is not something we've talked about, but it's an important part of the program. I also wanted to share an example that illustrates the point that you were making in your question.

There's a particular class of medication called proton pump inhibitors. They are used to treat GERD or heartburn, and every so often when one of these medications on patent is coming off patent, the drug company that's losing the patent will come up with a biosimilar molecule that's different enough that they can extend their patent but that offers no meaningful clinical benefit. That's the drug they'll go out and market. They'll lobby different insurance plans to cover it, and more often than not, the private insurance plans will say no. Even public drug plans, the ones that many of my low-income patients and seniors access in Ontario, said no, because they use some of the mechanisms that already exist, such as the common drug review, which is part of the process that CADTH employs to make the decision that we're only going to pay for medications that offer cost-effectiveness and meaningful clinical benefit. Otherwise, why are we going to pay for a medication that costs more but offers no added benefit?

[The Chair, Liberal, Bill Casey]

Go ahead, Mr. McKinnon.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you, Chair.

Mr. Frank, the picture emerging in my mind is one of a universal national plan that's single-payer in the manner of the Canada Health Act. I'm having trouble seeing where private plans, such as yours, would fit into that model.

Can you fit into that model, and if so, how would you do that?

[Stephen Frank]

If the model is a first-dollar-paid public plan, then I suppose the role for private insurers essentially disappears. You'd have to define the model you're proposing a little more clearly for me.

There have been some interesting discussions around a national formulary based on the WHO definition of essential medicines and things like that. Those kinds of concepts I think everyone can get behind. I'd be surprised if there's a private insurance plan in Canada that doesn't already cover those medications.

Those are the kinds of practical discussions we should be having that help move the ball forward. It can be done quickly, and we can all get behind it. It could make a meaningful difference for people. That's the kind of thing I was referring to earlier. We need to be practical and start improving the system in ways that make sense within the current system.