Health Committee on May 2nd, 2016

[Dr. Graham Sher]

Very briefly, I would say no. As the CEO of a publicly funded national not-for-profit organization, I can say that we follow all public procurement and tendering processes and I have no conflicts to declare.

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

Thank you, sir.

Mr. Sher, I would like to go slightly off topic from pharmacare briefly and ask you a question about plasma donors being compensated, given the attention that has received lately and the vocal activism we have seen opposing the opening of certain paid donation facilities.

However, at the same time I understand that a significant portion of Canadian plasma products have long come from paid sources in the U.S., and safely. Can you inform the committee where Canadian Blood Services stands on the role of paid plasma here in Canada?

[Dr. Graham Sher]

Thank you very much, Mr. Kang, as I anticipated that this question might come from someone at the committee.

I'll be very brief, Mr. Chair, because it's an important, but obviously complex issue and it has played out significantly in the media this past week.

Canadian Blood Services follows the principle of voluntary non-remuneration of its donors, meaning we do not pay any of our donors for any of the products we collect from them whether blood, plasma, platelets, stem cells, organs or tissues. We have adhered to that policy at all times.

It is true that the amount of plasma that we collect in this country meets only about one-quarter of patient need for the important class of drugs called immune globulins, and we have to purchase the remaining required three-quarters on the international market, with most of those plasma derivatives coming from the commercial paid for-profit plasma industry in the United States.

If you look at the finished drugs that patients in Canada receive today, about three-quarters of those drugs come from paid donors and about one-quarter come from our plasma, which is from unpaid donors.

There is no safety concern with respect to the difference between products from paid and unpaid donors. The technologies, from a processing and a sterilization point of view, are exactly the same in all industries and there has not been a single case of disease transmission through paid plasma products or unpaid plasma products for the last three decades, almost 30-plus years now.

The issue that has been very dominant in the media of late hinges on two things. Firstly, a—

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Chairman, I have another point of order. I'm sorry to do this again, and I was hesitant to raise a point of order at the question, but I should have.

The witness is getting into the issue of paid plasma, which is a very important issue but has absolutely nothing to do with the study before this committee.

If I were to ask questions, I would have 20 questions to ask this witness on the safety and efficacy of paid plasma, but obviously I won't have the opportunity to do so because he's been called here today not to testify on that issue but to talk about his experience with bulk buying in a national pharmacare plan.

I'm going to ask that the witness not continue on in this regard. If he wants to come back and if this committee wants to study the safety and risk issues of paid plasma products in this country, I'm certainly willing to do that, but that is far beyond the scope of the study before us.

[The Chair, Liberal, Bill Casey]

The questions are on all our minds, but it doesn't matter because the time is up.

I'm going to move to Dr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

That's a very political response, Mr. Chair. I appreciate that.

I did want to point out, too, that recently we had three witnesses who wrote “Pharmacare 2020”, and they actually came as individuals. That's just to the point of Mr. Kang about how the people come.... I don't think that's as important as what they contribute to this study, and I want to thank all the witnesses for being here today, because one of the things....

We might as well talk about those other witnesses. What I was worried about with regard to their testimony is that they seemed to be leaning towards how perhaps the government should be working towards monopolizing a pharmacare program. I am concerned about anti-competition and less choice for individuals. I come from a union town in Oshawa, and one of the things with collective bargaining is that they do manage to get a really great health care program out of it.

As for some of the testimony we've heard in the past, I think it's good that it's balanced, and I'd really like to question you a little deeper with regard to the pCPA. I think it was Mr. Palmer who said that it has been a success. You're saying that half a billion dollars has already been saved. I believe it was Mr. Dempster who said that there have been about 100 medicines finished through that. How many medicines are out there to go through?

The backlog you mentioned was significant. If we were able to get through all the medicines that are out there—there must be thousands—what kinds of savings do you think we could get out of that? I know that I'm asking you to pick it out of the air, but compared to the percentage that's out there, could we find out?

[The Chair, Liberal, Bill Casey]

We have a point of order.

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

Mr. Carrie, on why there is a conflict of interest issue in the committee, we should be clear on everything. I don't want something to come back and haunt the committee in the future whenever we come out with a report. For all the stakeholders, I think it should be made clear that there's no conflict of interest, in case we as a committee come out with something.

[Colin Carrie, Conservative, Oshawa, ON]

I appreciate that very much.

Can I hear my answer?

[The Chair, Liberal, Bill Casey]

I want to say, too, that we're very interested in hearing all the answers, but if a witness is here and is just giving us his own personal thoughts, that's different from representing the industry or whatever. Just as long as we know where everybody fits, we're very interested in hearing them.

Dr. Carrie, you're back.

[W. Neil Palmer]

My answer—and I suspect Mr. Dempster's will be similar—is that these are objective answers that are not opinions or advocacy. That's in response to the question.

There are probably about 100 new products a year. It varies. It could be 50 or 150 that are approved in Canada every year and are new chemical entities. All or most of these, if they're outpatient drugs, would work their way through this common drug review or the pan-Canadian oncology drug review process—one or the other—or the INESSS process in Quebec.

If they get a positive recommendation—let's say two-thirds of them end up with a positive recommendation—then they would move on to the pan-Canadian Pharmaceutical Alliance for a price negotiation. In terms of new medicines every year, a ballpark estimate is that there are somewhere between 50 and 150 new products every year, which the jurisdictions would sort through, depending on how many of these come up.

In terms of the older products, I think Ontario has something like 3,000 or 4,000 products on its formulary. I'd have to go back and check. Most of those are old generics. As Mr. Dempster and I mentioned, there are pricing rules that are in place covering all of those.

For some of the other drugs that are off patent, likely they're subject to generic competition. That leaves some drug categories that the pCPA is now looking at in terms of class reviews. They're taking DPP4s, which are a form of diabetes drugs, and looking at a class now, and they're negotiating with all of the manufacturers that market drugs in that class to come up with lower prices.

They're doing it strategically. They're doing all new products, and then they're looking back strategically at some older products in classes. That's the approach they're taking.

In terms of what the reaction in the pharmaceutical industry is, I think there's a tepid acceptance of the process for new drugs, in the sense that they hope it advances the process for getting a drug listed. There's a lot of anxiety about looking back at some of the classes and negotiating prices after the fact. I expect that you may hear some testimony on that at some point.

[Colin Carrie, Conservative, Oshawa, ON]

You would say there is potential for significant savings there.

[W. Neil Palmer]

Oh absolutely.

[Colin Carrie, Conservative, Oshawa, ON]

When you look at it for availability, I believe the U.K. and New Zealand have attempted these monopolies and it really gets to a point where sometimes the patients can't even.... You mentioned new cancer drugs, I think. Sometimes they can't get them.

[W. Neil Palmer]

Right. There's a different approach there. In Canada and some other markets—France would be another one—sometimes there are what we call price-volume agreements, where they actually negotiate prices drug by drug. In the U.K. and New Zealand, they set budgets, and if there isn't any more room in the budget, they don't list the new drug.

In England, it's a little trickier because they have all these clinical commissioning groups, each one with its own budget. They have to find the money to start paying for new drugs. They use budgeting, as opposed to this overall price negotiation. That's not to say that they don't have one-off negotiations for some new drugs, but they don't do it overall. It's primarily budget-setting that keeps the costs lower in those markets.

[Colin Carrie, Conservative, Oshawa, ON]

I appreciate the explanation, because previous witnesses were trying to compare apples to apples, but I realize after your testimony that really we're looking at apples to oranges, because the entire system is different, and we really have to take a close look at this when we're discussing national pharmacare.

Mr. Dempster, I'm sorry I interrupted you, but could you add to my question?

[William Dempster]

I would agree with Neil. Last year, for example, 50 products were reviewed by the common drug review. Forty of them got a “list” or a “list with criteria or conditions” recommendation from the health technology assessment agency.

They determined that 10 of them were just not clinically valuable, and there was nothing you could really do on the economics to actually support a negotiation, but a full 40 of them got some kind of yellow light or green light to go forward on negotiations.

Last year, 2015, was a big year. The federal drug administrations in the U.S. and Canada actually approved or authorized more drugs than they had in the previous 12 years—45 drugs in the U.S and 43 in Canada.

A big volume of very interesting, and I think valuable, products are coming to market every year, and that's a testament to what they are coming out with at the common drug review, which says that they are clinically useful, and that something should be done about the price, or maybe that the clinical criteria should be changed. That isn't what Health Canada says it should be set up for, but the pCPA is now struggling with that volume of new products. Maybe there's a role for the Government of Canada in helping to facilitate that and improve how the pCPA works.

[Colin Carrie, Conservative, Oshawa, ON]

Excellent.

[The Chair, Liberal, Bill Casey]

You're done.

Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Dempster and Mr. Palmer, would you be able to provide the committee with a list of your clients in the pharmaceutical sector after this? Would you send it in to the committee? Would you be able to do that?

[W. Neil Palmer]

I'd have to think about that. Some are protected by confidentiality agreements. Others are probably in the public domain. I'll see what I can do. I can tell you, sir, that most of the major pharmaceutical companies we've done work for at one time or another. That helps answer your question.

[Don Davies, NDP, Vancouver Kingsway, BC]

Mr. Palmer, my research indicates that at least three times in the last 20 years, in 1997, in 2002, and in 2016, the firm that you have worked for has produced a report arguing that a universal public drug plan would not be affordable in Canada.

Is that the case?

[W. Neil Palmer]

We have produced reports in those years. That's correct.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm going to state the obvious. I take it it's your testimony before the committee that you believe a universal prescription pharmacare plan in Canada is not affordable. Is that your position?

[W. Neil Palmer]

There would be a significant cost to the federal government to do that if the federal government were to take that on. Whether you say affordable or not affordable, there would be a significant shift in costs to the public sector.