Health Committee on May 2nd, 2016

[Len Webber, Conservative, Calgary Confederation, AB]

Thank you.

[The Chair, Liberal, Bill Casey]

Your time's up. Thanks very much.

Dr. Eyolfson.

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

In regard to the comments about the percentage of people who can't afford their medications, I would point out that from my 17-year career working in the emergency department, it is estimated that about 60% of emergency department prescriptions are not filled. The reasons are many, of course, but much of it is that there are many indigent people who receive their only primary care from the emergency department.

Whether you can make the assumption or bit of a leap of faith that this is due to cost, I would think that a substantial part of it indeed is. We do know there are substantial costs to the system from non-compliance. I've been throwing the following example around liberally, and pardon the pun, but if someone can't afford insulin, one hospital visit for DKA will probably pay for a lifetime of insulin. If you add the costs of limb amputations, blindness, and the fact they need to be on dialysis, the savings become much more apparent.

Therefore, when you talk about the cost to government of doing this, has there been any thought of factoring in the potential cost savings by recognizing that these indigent people, who are a small proportion of the population, account for a large health care expenditure?

[W. Neil Palmer]

I think I'll start with the beginning of your question to the extent that it's indigent people. They almost universally have coverage. Every province in this country provides indigent people with coverage. They may not know they have it, or they don't know how to get it, but they have coverage. If you're essentially eligible for welfare, or social assistance, then you have drug coverage. You're entitled to all the products on the provincial drug formulary and at almost no copay or deductible. If there's any copay or deductible, it is the lowest one. They already have it, so there's something more going with those individuals not getting over to...whether the answer is that the hospital pharmacy needs to dispense it on their way out so they have it, and hopefully take it, or....

For people who don't fall into the indigent category, for the working poor—you can call them that, certainly—there's a cost barrier. They may not fill their prescriptions, or they may not take all of them, or they may do whatever. There's certainly an issue.

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

I would agree. The working poor are a large proportion of whom we see, and probably a greater proportion than indigent patients. With indigent people, from our professional experience, it's certainly the case that coverage is not as accessible as we sometimes assume. There are administrative barriers to their coverage. If someone goes from one province to another there can be delays of months, so there's still a barrier with indigent people.

In one of the comments in your report, you gave some examples of some drugs covered by private drug plans but not currently being included as benefits. You give a couple of examples: nexium, moxifloxacin for conjunctivitis, and eletriptan for migraines. Do we have evidence for each of those drugs that outcomes are better with those more expensive drugs than with the cheaper alternatives? Do we know that esomeprazole gives better outcomes than omeprazole? Do we have evidence that eletriptan gives better outcomes in the treatment of migraines than sumatriptan?

[W. Neil Palmer]

I would suggest, sir, that these are just additional choices that would be available. Esomeprazole is available as a generic, and so are some of these others. They're not funded in most provinces. They're simply additional options that could be available and aren't—

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

They're options, but does it matter if they're available if they are not any more effective than the cheaper options?

[W. Neil Palmer]

If they are part of a private drug plan, these are options that are available for physicians to prescribe. If, in their professional judgment, patients may benefit from those drugs, then that's reasonable.

[William Dempster]

Do you mind if I add a point on that?

In certain drug classes—I'm thinking about mental health or pain, for example—physicians, and you're one, need access to a range of products. Although you'll see some statistics like 80% of these products not adding any additional therapeutic value, often that's at a population level. Some patients do not well tolerate one product, and they need to try something else, especially in mental health, pain management, etc.

There are some very good organizations that are doing comprehensive studies on things like this, and I gather you heard from Dr. Dhalla earlier. The Ontario Drug Policy Research Network does very interesting class reviews. They did one on triptans as well, so I might direct you to that. CADTH does them as well. Those are the places where you can have these discussions in a science-focused way and look at the costs as well.

[The Chair, Liberal, Bill Casey]

Your time is up.

Ms. Harder.

[Rachael Thomas, Conservative, Lethbridge, AB]

Thank you so much for being with us today. We certainly appreciate the insights you're providing. I believe they certainly add to this dialogue.

My first question would be for you, Mr. Palmer. I realize that we're putting you on trial quite a bit here. I guess your company advises drug producers with regard to how much they can charge for a pharmaceutical. That's basically my understanding.

[W. Neil Palmer]

I would put it differently.

In terms of pricing, we would explain the rules that the PMPRB has. While you would hope that they would be simple, they are not. Similarly, where there is a common drug review or the pan-Canadian oncology drug review or INESSS, we explain, assist, and put together the documentation submission, including cost-effectiveness analyses, clinical summaries, and putting together the very comprehensive submissions that have to go in. We provide advice around that whole process.

[Rachael Thomas, Conservative, Lethbridge, AB]

I think your company comes up against a few allegations. One of them, I think, is that we've heard Health Canada officials say that they can't understand the justification for drug prices in Canada, based on comparisons with foreign jurisdictions. We've heard multiple researchers and physicians accuse your clients of price gouging.

I'm wondering if you can give me some comments with regard to these allegations. Are they true? Are they false? Can you make sense of that for me?

[W. Neil Palmer]

I know that the former health minister and current interim leader of the Conservative Party made that statement. I believe that the current health minister has made similar ones.

To the extent that there is price gouging, whether it's the PMPRB, or the pCPA, or the provincial drug plan managers, they need to take action. They have the power to do so, and they should act on it. We don't advise clients to charge excessive prices. We advise them to follow the rules. Some don't always take our advice.

It's not our advice that they should be gouging. We explain how the common drug review and the rest of them work. They want cost-effective pricing, cost-effective in the Canadian context, and the provinces are concerned about their budget impact. Those are the parameters that we bring to the table. We help to explain those to them so that they hopefully will set prices that are cost effective. If they're not, well, presumably the PMPRB, the pCPA, or the provinces will take appropriate action.

[Rachael Thomas, Conservative, Lethbridge, AB]

With regard to your relationship with the Canadian drug suppliers, do you see a possibility whereby Canadians could lose access to treatment options under a national pharmacare program, perhaps because drug suppliers will consider that Canada is not necessarily worth the work to negotiate with?

[W. Neil Palmer]

We hear from pharmaceutical manufacturers from time to time that they're not prepared to come to Canada. This is something that they put out there.

They won't like me saying this, but there aren't a lot of very good examples out there. As for the few examples of products that haven't come to Canada, frankly, there are already alternatives on the market at low prices. The real reason they aren't coming, I believe, is that it's a not an opportunity for them to compete in Canada. They're not prepared to compete. I don't think there are a lot of examples.

If you pushed us to the New Zealand model, for example, that could be a real problem. There are some very important cancer drugs that aren't available in New Zealand unless you pay cash. There are limits.

[Rachael Thomas, Conservative, Lethbridge, AB]

Do you feel that the methodology for determining prices would be affected significantly under a one-buyer system?

[W. Neil Palmer]

I guess there are two elements to that. There's the maximum price allowed by the PMPRB, which is.... Depending on how the PMPRB evolves over the coming time, we don't know their role.

For most of the prices, whether it's a national pharmacare program, there's going to be a confidential listing agreement. There's a whole series of reasons for that, particularly for the newer products. I don't think there's going to be a big difference between what the pCPA does now and if everything were to be under a single plan. I don't think there would be a big difference.

[Rachael Thomas, Conservative, Lethbridge, AB]

Mr. Dempster, I have a quick question for you. I want to make sure I understand the following. I thought you made a comment with regard to private drug plans versus public drug plans. You made a comment something along the lines of how private drug plans “want in”. Can you help me understand that statement?

[William Dempster]

In 2013, the Canadian Life and Health Insurance Association put out a report saying that they wanted access to the pCPA prices. I don't think they've figured out how they can actually do that in practice.

There are a couple of challenges in making that happen. One is price confidentiality. The second one is practical, in that you already have 14 plans negotiating together in multi-level negotiations, so when you add all the private payers in there, it gets extremely complicated.

Those are just a couple of the challenges. Can it be done? Possibly, but we haven't really seen how that can work in reality.

[The Chair, Liberal, Bill Casey]

Ms. Sidhu.

[Sonia Sidhu, Liberal, Brampton South, ON]

Are there any international models we should look at in terms of initial implementation of pharmacare? While we have heard many times that going with a fully universal model of pharmacare would save money in the long term, there must be ways to keep the initial price tag down, in terms of transitioning to the new model. What countries do you think of when you think of properly implementing this for the first time?

[W. Neil Palmer]

I can speak to countries where the population is quite heavy. France is an example. A lot of people wouldn't be happy with the French model even though, if you did a survey of the population, it's probably one of the most liked.

They have a significant copayments, but most of the population has private insurance through Mutuelle de France.

They cover many more drugs than most other markets, but they have a very significant process for negotiating agreements with the manufacturers. They negotiate price volume agreements. I think one thing they do quite well in France—and we're starting to see it in Germany and some other markets—is to assess the relative value in two ways for drugs.

First, they look at the basic benefit of the drug, which they call service médical rendu, and then they look at the improvement the drug offers, called amélioration du service médical rendu. They use these two elements to decide what price point they will accept, and whether or not the drug should be reimbursed. They've been doing this for a long time, and they do a very good job of it. Most drugs end up being reimbursed there, with the exception of some very expensive drugs which get funded through an alternate process. It's quite different.

The Germans, and some of the other markets, have a social insurance type of system. As a result, almost all of the insurers are private—most of them not-for-profits. It's the same, I believe, in the Netherlands and Japan. In many other places, they rely on that completely. In Germany, if a drug is approved by the European Medicines Agency, it has to be reimbursed. All they can do is negotiate the price, and they do that.

I'm not suggesting that there's one country we should emulate, but there are best practices in many of these markets we can look at, not only in terms of getting cost-effectiveness in Canada and limiting the budgetary impact, but also to ensure that there is good access to drugs. Every system has pros and cons, strengths and weaknesses.

[William Dempster]

I would just add to look for countries that have a sophisticated negotiation capacity, which can actually negotiate value-added deals.

We heard Dr. Eyolfson talk about adherence challenges, and keeping people on the medicines. There are systems for negotiating that into these contracts that go beyond the price-volume agreements. Especially for drugs for rare or really complex disorders, I'd look to Italy.

Germany has a very good system for stepwise negotiations. There's a set of six. You're expected to come to a deal at the end.

Figure out the ones that actually work best for all of the vulnerable populations and not just for the working poor, as you've called them. Let's talk about the people with rare disorders as well, and some of the smaller patient populations.

[Sonia Sidhu, Liberal, Brampton South, ON]

My next question is for Dr. Sher. You seemed to suggest that there are advantages to provinces working together on health product purchasing policies. I have two related questions.

First, could you explain the federal government's role in the financing and administration of Canadian Blood Services, and in financing the cost of the related services and products provinces procure through the CBS?