Thank you very much, Mr. Chair, and committee members. Thank you very much for the opportunity to be back in front of this committee, this time to talk on the important topic of pharmacare.
We are here before you today because we view Canadian Blood Services' national formulary of plasma protein drugs as a made-in-Canada model that may be useful to inform the committee's discussion on national pharmacare. We believe our approach shows that bulk purchasing of pharmaceuticals can be done transparently and successfully on a national pan-Canadian scale while maintaining product choice and ensuring security of supply for all Canadians. We've also supplied the committee with a written brief that includes more details about the information I'm going to summarize today.
Let me begin by explaining what plasma is and providing a bit of context on how plasma protein drugs are made. Plasma is the protein-rich liquid in blood that helps other blood components circulate throughout the body. Plasma protein drugs or plasma protein products are a highly specialized class of drugs made from human plasma.
Pharmaceutical companies that manufacture these derivatives are called fractionators and are typically found in the United States and Europe, where these products are made by pooling large volumes of plasma donations from thousands of screened plasma donors. The pooled plasma then goes through a series of rigorous processes and tests to eliminate pathogens and other contaminants, making the finished products extraordinarily safe. A number of these plasma protein products are now synthetically manufactured by genetic recombinant technology and all of the drugs in this class of products are deemed to be expensive biological drugs for lifesaving indications.
Our organization has the sole responsibility for bulk purchasing and managing a pan-Canadian formulary of 45 brands and classes of plasma protein products. We do this on behalf of all the provinces and territories with the exception of Quebec. These drugs are worth over $600 million a year and are essential medicines in Canadian hospitals and clinics, and around the world. They are used to treat patients with bleeding disorders such as hemophilia, as well as patients with inherited and acquired immune conditions, burn, trauma victims, and many other clinical indications.
Advocates for a national drug program have argued that the lack of broad national bulk purchasing capacity creates a serious value gap for Canadians. We would agree.
While governments have indeed been able to lower the cost of some drugs through the pCPA, as we heard from both previous speakers, price is only one part of the equation. Our supply chain management and bulk-purchasing program addresses, in addition to pricing, patient outcomes, health system performance, as well as cost, and delivers layers of added value to Canadians in the process.
We achieve these benefits in several ways. Firstly, wherever possible, we carry multiple brands of a single product class. We buy these brands and classes in smaller, diverse lots. We negotiate essential safety stock agreements with every manufacturer to mitigate against any potential shortfalls or supply disruptions. Most importantly, we do this without resorting to single sourcing. At the same time, because of the national bulk purchasing power, we ensure that the prices we pay are highly competitive internationally.
Another very important factor in our process is that we build into the process input from stakeholders at all steps of the procurement process. Our program engages and involves patient groups, as well as the prescribing medical community, and gives them a voice in the decision-making on product selection and procurement, and aims to offer and ensure a reasonable degree of product choice.
As part of our product selection process, we also collaborate and draw on the expertise of the Canadian Agency for Drugs and Technologies in Health, CADTH, from whom you've heard, to provide the necessary pharmacoeconomic analysis whenever we consider adding a new category of drug to our formulary.
This collaboration is an important part of the procurement program and ensures that we add the right types of drugs to the formulary for Canadian patients. It also ensures shorter and more efficient approval times for review and ultimate decision of listing of drugs onto our formulary making access times for some of the drugs on our formulary amongst the shortest in the country.
One of the greatest successes of our program is the use of open, competitive, public tendering to get the best possible prices through multi-year requests for proposals for a single product or group of products. This public tendering process and the economy of scale we achieve by purchasing for all the provinces and territories have brought significant cost savings for funding governments. For example, in a recent round of tendering for a suite of plasma protein products, we negotiated a $600-million reduction over a five-year period for less than a dozen drugs. More recently, we were able to negotiate an additional $60-million annual reduction for two hemophilia drugs. Today we've been able to negotiate the price of drugs down to below 2009 pricing levels. These examples clearly underscore the value of a national bulk-purchasing program of expensive pharmaceuticals and, more importantly, this value is achieved without sacrificing either product choice or diversity of supply.
Once these products are purchased and available, how they're used also becomes important. We collaborate with experts in transfusion medicine and physicians and provincial-territorial governments across the country to develop clinical practice guidelines and to promote optimal utilization practices for these drugs. Our model also allows the provinces and territories to introduce their own access guidelines for individual products, which they can then manage themselves at the regional health authority or institutional level. Canadian Blood Services and national physician groups affiliated with the blood system can also develop national criteria for use. These options give the treating jurisdictions flexibility in how they manage their use of these essential, yet expensive, biological drugs.
Canadian Blood Services also independently qualifies new suppliers and audits them periodically. This process adds an additional layer of vigilance and product safety for patients. Our contracts with suppliers require them to report early and regularly any issues in bringing product to the marketplace, and to ensure they maintain adequate safety stocks in the country. This information enables us to act on any supplier issue quickly and helps mitigate the risk of product shortage.
Our procurement and legal groups are well versed in the specifics of bulk buying, which we leverage to the advantage of all the provinces and territories. These steps are an important additional layer of value in managing a national bulk-purchasing and distribution program on behalf of all jurisdictions.
Collaboration with the prescribing medical community and the hospital sector in which these drugs are used has clearly been an important part of the success of our program. We have hospital liaison specialists who maintain strong relationships with the treating community and manage any issues related to supply, product choice, or adverse events. Our on-staff medical directors provide expert advice when a physician encounters an issue with a patient who could benefit from the perspective of an additional specialist.
These cornerstones of our bulk-purchasing program are the elements that have enabled it to succeed. Taken as a whole, our model supports a level of health equity that remains out of reach for many other patient groups served by individual provincial health systems, and who may face an all-too-common postal code lottery when it comes to accessing certain medications, particularly expensive ones. In contrast, whether the patients we serve are in Vancouver, Iqaluit, or St. John's, Newfoundland, they have access to the same reliable supply of high-quality drugs at all times.
In summary, Canadian Blood Services has been providing universal and equitable access to plasma protein drugs at no cost to patients for nearly two decades. Our approach to bulk purchasing is not a cookie-cutter solution for many of the substantial challenges that must be resolved should governments enact aspects of the national pharmacare program. Rather, our experience shows that bulk purchasing can be done transparently and successfully, while maintaining product choice and security of supply.
We brought these points to the committee today to demonstrate that pan-Canadian collaboration in the complex area of drug acquisition, distribution, and utilization, can be done in a way that responds to the concerns raised by many stakeholders to the pharmacare issue.
As interested parties continue to study this complex issue, we would be pleased to answer their questions as well as this committee's and to explore any ideas further, if they are of interest.
Thank you very much.